Knowledge Transfer from the Near Retirement Generation to the Next Generation

RT-292 Topic Summary
RT 292

Overview

As the Baby Boomer generation nears the traditional retirement age of 65, organizations in most industries are finding themselves facing a potential mass exodus of their most senior and experienced employees; the situation in the capital projects industry is no exception. As older generations begin to retire from the construction workforce, knowledge and first-hand experience is leaving with them. RT-292 investigated the current state of the industry’s Knowledge Management (KM) in order to understand its knowledge transfer problem in terms of magnitude and dynamics, and to isolate the contributing factors and barriers to success. 

RT-292 has found that when an organization effectively manages and retains its subject matter experts’ experiential knowledge in the face of increased retirement rates, it can optimize its institutional knowledge. Having an effective experiential knowledge retention plan is important now more than ever, as the number of Baby Boomers at or approaching retirement age is increasing every day. Furthermore, as the economy begins to recover, individuals who have put off retirement due to economic hardships will again be looking to retire in the near future. 

The team conducted interviews, surveys, and case studies, and consulted heavily with industry knowledge management and human resources experts to frame the problem and understand what constitutes a successful experiential knowledge retention program. As a result, RT-292 was able to confidently provide recommendations and conclusions regarding experiential knowledge transfer from the near retirement generation to the next generation for the capital projects industry.

The result is a knowledge retention model that, at a high level, has the following functions:

  • Aids in the implementation and preparation of a corporate knowledge retention program
  • Assesses current risk of experiential knowledge loss across organizational knowledge areas called Subject Matter Areas (SMA)
  • Identifies at-risk individuals whose departure would result in the loss of considerable experiential knowledge
  • Provides a mechanism for effectively planning to transfer/retain the knowledge at risk
  • Offers guidelines for implementing the plan

Key Findings and Implementation Tools

1 : Departure Rates & Knowledge Gaps

The capital projects industry is experiencing a dramatic increase in the departure rate of experienced people from the workforce; this is due to the large number of retirements from the Baby Boomer generation and a shortage of qualified workers able to fill the resulting employment gap. (RS292-1, p. 1)

The operational effects of a knowledge gap within an organization include the following: reduced efficiency, an increase in the number of critical errors, a reduced ability to innovate, and a reduced ability to pursue growth strategies. 




Demographics are not the sole contributor to the knowledge management difficulties of the capital projects industry. Project based organizations, especially organizations with short project cycles, see knowledge generated, re-invented, and lost as teams are formed and later broken up to work on new projects. This is an additional challenge that must be overcome, and provides motivation for project based organizations to develop strong knowledge sharing cultures. 

Reference: (RS292-1)

2 : Typical Elements of Knowledge Management Program

Typical elements of a Knowledge Management Program include the following phases: 

  • Prepare for KM Effort
  • Conduct a Risk Assessment
  • Determination and Implementation of Plan
  • Monitoring and Evaluation