August 2019
M
anufacturers face a people problem. Whether
it’s the rapid retirement of the Baby Boomer
generation (estimates indicate 10,000 people a day turn 65,
with that number expected to rise as much as 20 percent
in the next 10 years) or the reduced rate of Generation
X and millennials entering the industry workforce,
talent is becoming an even more coveted resource.
However, it’s not just the people themselves who
are becoming a precious commodity, it’s the crucial
intangible they possess — knowledge.
“The organization itself doesn’t have the
knowledge, it’s the people within the organization
that have the knowledge,” explained Ken Mall,
managing director of workforce consulting for
EDSI Consulting. “While it can be difficult to
define the cost of losing this knowledge, there is a
real cost to the organization.”
Mall continued, saying that “the costs could be
as simple as taking longer to perform a task than it
used to (the added cost of labor) or the impact can
be more dramatic. When skilled trades people with
specialized knowledge retire, he or she takes that
knowledge with them. If a machine or a process
breaks down and the person best-equipped to fix it
is gone, that can have lasting financial impact along
with real and dramatic consequences.”
Tacit, tribal or institutional knowledge is incredibly
valuable to a company’s long-term success. As
people become better at the jobs they do, much of
the “secret sauce” behind that effectiveness isn’t fully
understood. It’s a mix of experiences gathered
through months, years and decades of doing the job
and it’s almost always something not written down
or well-documented. Until they are asked the
important questions of how they do the job or why do
process X that way, that knowledge is always one
retirement, one career change or one death away
from being lost.
Today’s manufacturer faces two critical problems:
1. The retirement of the Baby Boomer generation
the manufacturing industry has come to depend
on and one which represents the majority of
current leadership positions within a company.
Loss of their knowledge represents more than
just the loss of experience on the facility floor;
when they retire, they take with them skills
accumulated across many positions and the
relationships and networks they’ve developed
over decades.
2. Multiple generations, Generation X and
Millennials in particular, who are less likely to
favor industry jobs than past generations and,
this is key, far more likely to switch jobs and
careers over the course of their lives. According
to a Gallup poll, 36 percent of millennials say
they would look for work somewhere else
within the next 12 months.
MiMfg Magazine
For manufacturers struggling to retain the
knowledge of employees — and MMA’s annual
manufacturing survey suggests general talent retention
as industry’s most pressing business challenge —
they are facing the double-edged sword of losing it
both from their longest-tenured workers and their
newest hires.
While companies who fail to retain the
irreplaceable knowledge of its workforce could
fall by the wayside, it’s not all darkness for the
well-prepared manufacturer.
“The Baby Boomers’ aging out of the workforce
is creating new opportunities to capture knowledge
and has certainly increased the need for knowledge
retention,” said Mall. “It is true that employers
continue to have problems hiring new employees,
and those issues will likely continue through in the
near term. However, implementing a knowledge
management program can actually help retain
employees by engaging them. Through the process,
they might also find new and better ways to get
the work done.”
With as many as five generations working
side-by-side, now is the perfect time for employers
to work to secure the institutional knowledge and
the legacy of the workforce while providing younger
generations with a sense of trust and career confi-
dence that will encourage them to stay in
one place.
Developing Your All-Encompassing
Knowledge Retention Strategy
The specific how behind each manufacturer’s
knowledge retention will vary based on everything
from the type of business to the company’s size and
location to even the minutia of which positions they
focus on. Generally, however, there are six steps a
manufacturer should go through to implement a
viable strategy:
1. Organizational analysis
2. Job task analysis
3. Skill assessment survey
4. Skill gap analysis
5. Next step identification (e.g. training plans
and opportunities for mentorship)
6. Continuous improvement
“Like every other aspect of manufacturing, it’s
not the companies that do something on a whim
that succeed — it’s the businesses that develop a
strategy, communicate the purpose and importance
of that strategy to their talent, and stay committed
to implementing the strategies that tap into the
long-term rewards,” said Chuck Hadden, MMA
president & CEO.
13