Tackling knowledge leakage in the workplace and how to stop it walking out the door.
Managing knowledge and delivering learning in the hybrid workplace is critical, but can also be challenging. In a series of blogs we look at some of the main issues that often arise, and how that has driven us to design Slick Plus. Last time we looked at informal knowledge. In this second post, we examine the damage of knowledge leakage caused by people leaving your organisation with all that they know, and what can be done to tackle it. In Ireland, a staggering 37% of all treated water is lost each year due to leaky pipes; it’s expensive, inefficient and not good for sustainability. Many organisations take a similarly leaky approach to managing their knowledge. Imagine all the knowledge that flows around an organisation that people rely on to get work done, carry out their role and deliver products and services. Much of this is informal knowledge that has never been captured and is locked inside people’s heads. The flow of knowledge from internal experts and those with more experience to people who are ready to learn is also critical for developing skills, professional growth, and employee engagement. But when those experts and more experienced colleagues leave your organisation all that critical knowledge and expertise that has been acquired over the years, quite literally walks out of the door, leading to knowledge leakage. How significant a problem is knowledge leakage? Knowledge leakage can be a significant problem, particularly for knowledge-intensive, innovation-driven industries such as engineering, medtech, technology and professional services, or where the workforce is ageing with many facing retirement. Many organisations are also trying to become more skills-based, trying to navigate ongoing skills shortages in a high speed high-tech world where work continues to evolve at a break-neck pace. In the 2023 LinkedIn Workplace Learning report, 89% of L&D professionals agree that proactively building skills will help them to navigate the future of work. Clearly that’s much harder when your skilled and experienced employees are taking their knowledge with them when they leave. While instinctively we know the damage of knowledge leakage, it’s quite difficult to quantify it. Here at Slick Plus we have a formula to calculate the cost of time wasted by employees as they search (with increasing frustration) for the information they need to get the job done. This is useful as an indicative cost that can be used in a range of business cases to assess the inefficiencies and expense of knowledge leakage in different parts of your organisation. However, much of the damage caused by knowledge leakage is intangible. But we can start to get some idea when we consider the high levels of employee turnover at most organisations; according to the LinkedIn Workplace Learning report, a staggering 92% of organisations are concerned about employee retention. How employee mobility leads to knowledge leakage Knowledge leakage happens because few organisations actually take a systematic approach to reducing it, but it’s also because of high levels of employee mobility. During the pandemic, the media pounced on the trend of the “great resignation” or the “great attrition”, commenting on the large volumes of employees voluntarily leaving their roles, with a variety of different reasons thrown into the mix, including a resetting of expectations around roles and career caused by lockdown and hybrid working. As hybrid and flexible work models now become mainstreamed, this irreversible trend may be contributing to continuing levels of employee mobility today. According to Josh Bersin’s recent HR predictions for 2024, at least 20% of all US employees change jobs each year. In Europe the situation looks equally fluid. Comprehensive research from McKinsey in late 2022 indicated that one third of European employees expected to quit their job within three to six months. Deeper analysis also suggests there is a longer-term trend of employees quitting that has been happening since 2009. Harvard academics Joseph Fuller and William Kerr attribute this to five factors: retirement, relocation, reconsideration, reshuffling and reluctance. Employee mobility is also not just about people leaving. Many companies are encouraging internal talent mobility through promotions and internal recruitment, helping plug skills gaps and reduce costs. For the likes of Bersin, such skills mobility is business-critical if companies are to remain competitive in a world with a shrinking talent pool. While technically that person’s knowledge hasn’t literally walked out the door, in practice by transitioning to a new role or location it is rarely captured and passed on, and essential knowledge remains hidden and untapped. There’s also a move towards shorter tenures which means knowledge leakage increases exponentially as employees go through a revolving door. Although some studies have shown that (certainly in the US) the median tenure over the past forty years has actually remained reasonably steady at around five years, anecdotally we see acceptance that shorter tenures are now more acceptable, if not the norm. There’s also a higher reliance on freelancers and contractors which helps plug skills gaps but makes it hard to retain that knowledge. A survey from Fiverr found that in the UK 96% of businesses work with freelancers, and that on average 21% of the workforce of UK companies are freelance. These figures are likely overblown, but in organisations who rely on freelancers, contractors and consultants, knowledge leakage will be high and mitigation needs to be in place. What can be done to stop knowledge leakage? Remember Ireland’s leaky pipes? Actually, something is being done about that. Thanks to a “National Leakage Reduction Programme the leakage rate is on track to reduce to 25% by 2030. Organisations can actively carry out their own knowledge leakage reduction programmes, and some knowledge management and learning teams are doing just that. People are way more complex than pipes. You can’t simply fix knowledge leaks by identifying the leak and then applying a fix. It takes an ecosystem-wide approach that combines elements such as culture, technology and human connection. How to stop knowledge leakage Knowledge Management (KM), Learning and Development (L&D) and operational teams have been carrying out tactics for