Retiring Workers and the Tragic Loss of Intellectual Property and Value

by Stacey Lett, Director of Operations – Eastern U.S. – Proactive Technologies, Inc. 

The warnings went out over two decades ago. Baby Boomers were soon to retire, taking their accumulated expertise – locked in their brains – with them. But very little was done to address this problem. Call it complacency, lack of awareness of the emerging problem, preoccupation with quarterly performance, disinterest or disbelief, very few companies took action and the Crash of 2008 disrupted any meager efforts that were underway.

Over a decade ago, Steve Minter in an IndustryWeek Magazine article on April 10, 2012 stated, “Only 17% of organizations said they had developed processes to capture institutional memory/organizational knowledge from employees close to retirement.” Who is going to train their replacements once they are gone? Would the learning curve of replacement workers be as long and costly, repeating the same learning mistakes, as the retiree’s learning curve? Would operations be disrupted and, if so, to what level?

“In our new “outsourcing nation,” a widely held belief is that employees are simply costs to be cut and not assets to be valued.” …. “Manufacturing faces a two-sided problem: it not only has thousands of people retiring, but it does not have the training programs to train skilled workers to replace them.”

A Strategy to Capture Tribal Knowledge
IndustryWeek- Michael Collins 5-23-16

In the last few years, it seems an alternative to the concentration of expertise in a few subject matter experts has become to use lower-wage temporary or contract workers who specialize in smaller quantities of processes, and who can be “traded-out” with a minimum amount of disruption. History will tell us just how costly that approach was and if anything was learned.

Many in corporate America have come to view all labor as expendable; easy to swap with a cheaper alternative – disregarding the cumulative asset value of the investment made in each. In the June, 2016 Proactive Technologies Report, in an article entitled “A Strategy to Capture Tribal Knowledge,” author Michael Collins notes, “In our new “outsourcing nation,” a widely held belief is that employees are simply costs to be cut and not assets to be valued.” He goes on to say, “Manufacturing faces a two-sided problem: it not only has thousands of people retiring, but it does not have the training programs to train skilled workers to replace them.”

There may be, also, a bit of elitism that keeps organizations from addressing the issue. After all, companies have had “succession plans” for critical salary positions in place for decades. The definition of “critical” needs to be expanded to include positions on the factory floor. This would mitigate the risk of losing people with the only expertise to run specialty equipment and perform unique and critical operations.

Recent significant “disrupters,” such as the Crash of 2008 and the Covid-19 Pandemic made the challenge more urgent. While taking time to decide if your organization should tackle the problem, the decision may be made for you when the organization has to unexpectedly layoff talented workers. That expertise, investment and value may be lost forever.

A prescription to avoid this paradox was outlined in the May, 2016 Proactive Technologies Report article “A Simple Solution to Skill Gaps – New-Hires and Incumbents,” Many other reasons for capturing the expertise and structuring it for transfer has appeared in other Proactive Technologies Report articles. Although the capturing of expertise embedded in the brains of seasoned workers and processing it so that it could be used in a the training of new workers seemed daunting, Proactive Technologies has helped its clients do just that for over 30 years. Capturing the information, creating structured on-the-job training programs, utilizing the accelerated transfer of expertise™ system approach and provided records and performance metrics is all part of the turnkey approach Proactive Technologies offers.

Take a few minutes to learn more about the approach through a 13-minute video presentation. If interested, attend a live online presentation of your area of interest or schedule a time and date suitable for you and your group. If your interest is peaked, schedule an onsite demonstration, presentation and discussion that focuses the discussion exactly on your organization’s needs. You have nothing to lose and so much to gain.