Use of EDI Service Providers Increase Because of Knowledge Loss

I’ve seen a trend that is really making knowledge transfer in organizations today an increasingly salient issue. The major demographic shifts that are happening, which includes not only the retirement of baby boomers, but the increased turnover of highly skilled midcareer employees and the increased difficulties of recruiting, developing, and retaining Gen Ys (younger workers). These demographic shifts, combined with the explosion of technical, scientific, and managerial knowledge in the workplace in the past 30 years, means that when people leave organizations today, they are potentially taking with them knowledge that’s critical to the future of the business.

The numbers are eye-popping; a study from AARP states that every day, 10,000 boomers reach the traditional retirement age of 65. That trend began in 2011 and is forecast to continue for the next 14 years. With baby boomers leaving the workforce several questions about replacing that knowledge arise. Organizational leaders are recognizing that, not only are a huge number of employees becoming eligible for retirement in the next five to 10 years, most have done little to retain the wealth of institutional knowledge that retirees would be taking with them. From the intricacies of key client relationships to mainframe computer languages no longer being taught in school, many experienced workers possess critical know-how that, if lost, would be costly – if not impossible – to replace. For any organization, the retention of the institutional knowledge is an important attribute in the recruitment and retention of employees. This is especially important for some highly skilled positions, such as in the technology fields. In these cases, the greater threat is the difficulty in quantifying and replacing these employees. While many managers worry about the level of turnover, the more important statistic should be the level and capacity of knowledge the people leaving possess. Organizations routinely sustain the loss of employees, but when those employees are highly skilled, possessing knowledge not readily replaceable, the organizations suffer. Whether that knowledge loss is a retiring worker or a career minded worker looking for advancement by moving to a new position or company, it is still a loss that needs addressed.

This is a problem with no simple solution. Those with the knowledge need an incentive to pass it on. For knowledge and skills to be passed on that means workers need time in their schedules to do so. Time is money and most workers, especially IT workers, are doing more with less. Also, the skills needed to pass on information (teach) are not the same as the skills to perform the job: can the retiring worker teach? Additionally, the targets of the information or students need to be identified. Recruiting is an issue. If you do find a suitable replacement employee then the information needs to be tailored to the audience receiving it. The generational learning gap is a real issue. That begs the question, “What should be passed on?” Identifying key critical areas is vital since it will be nearly impossible to elicit knowledge from all exiting employees, targeting those with the most crucial knowledge and skills is key.

Planning for the knowledge loss is important for an organization. It reminds me of my dad saying “Son, remember to dig your well before you’re thirsty.” I understand that better today than when he told me. It cuts to the point, what if we fail to plan? What if the inevitable knowledge loss hits our company before that skill and knowledge was passed on? What is the strategy then?

I’ve seen several approaches to address this knowledge loss. First, the retiring worker comes back to work as a consulting employee. In essence, the employee replaces themselves and the company pays double for the same worker. The workers gets their pension or retirement income and is getting paid consulting fees. This happens quite a bit and then, if the department heads are smart, they use this time to train new workers or pass on the knowledge at a premium price. Second, the departmental leads hire two or three employees to replace the one because the skill set to the retiring worker is vaster and so diverse that it takes two or three employees to fill the vacancy. Again, this is a costly solution. Recruitment is costly, training is costly, on-the-job learning could mean mistakes which would be costly. Third is to find an outside consultant to fill the gap. Fourth is to move the whole process to an outside managed service for a specific area.

Using a managed service has some distinct advantages over the other three options:

1. Business process can be examined and best practices can be implemented along with adding documentation and visual process flows.
2. Knowledge loss of a single worker is replaced by a team of employees at the service provider. This gives greater business continuity.
3. Work levels are stabilized via SLAs and performance guarantees.
4. Cost efficiencies are gained by reduced time, reduced turnover, and reduced training needed to perform the function being outsourced to a service provider.

Overall, utilizing a managed service is the most strategic way to address the loss of key worker knowledge and minimizes the impact of it happening again.

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