Some experts estimate that 25% of the 12 million manufacturing employees now working in the U.S. are 55 years of age or older. Replacing these people when they retire is a big problem for manufacturers because they are the most experienced and skilled people working in a manufacturing plant—and the knowledge base they've built over decades will go with them when they retire.
In many industries, a good deal of the knowledge about products, processes and customers is not written down—it is in the workers' heads. I call this information "tribal knowledge," and it is not only more important than most corporations will admit, it is also a driving force behind innovation; is critical to the company's competitive advantage; and is the basis of the training a retiree's replacement.
To ensure continuity, every manufacturing company needs to assess both the written knowledge and tribal knowledge. At the same time, they need to identify the "tribal knowledge gurus" in the company. The objective is to "download" the information from the gurus' brains, and document it, before it walks out the door with a retired guru.
Does Management Understand the Tribal Knowledge Problem?
In too many companies, management hasn’t been around long enough to recognize the loss of tribal knowledge as a problem. Or, they have not worked closely enough with the valuable workers to recognize the value of the tribal knowledge. I have written about this problem several times and a reader once commented, as follows:
“I am an "older" worker with over 30 years’ experience. I am surely the most experienced individual in the whole company as the other Pioneers of this industry have already retired. I'm the last one. You'd think Management would be picking my brain at every opportunity, but they don't. They don't even ask my opinion on things, and I continue to see them try things that were done 20 years ago—didn't work then and don't work now.
I think its ego, pride, and the fact that they are Managers—therefore they know better. Seems to me a great leader admits he doesn't have all the answers and depends on his people for them. Unfortunately, my leadership insists that they do.”
Management Prefers New Employees
Recent surveys show that many companies do not want to retain older employees. Instead, according to an article by KM World, they plan to "fill future talent tracks by relying on an aggressive recruiting program for new employees."
The CEOs who say this are probably not close enough to the key workers with the tribal knowledge and do not know how long it takes to attain this kind of knowledge. Recruiting and training new employees is problematic, especially since a recent survey by the Fabricators and Manufacturers Association found that "52% of teens have little or no interest in a manufacturing career and another 2% are ambivalent."
Recruiting new employees may be harder than companies think. Those companies who have decided they are going to aggressively recruit new employees must overcome manufacutring's negative image, including the fact that it is viewed as an unstable and declining industry. The ongoing publicity of outsourcing, plant closures, union busting and industry layoffs has not sold young people, teachers, parents and school counselors on American manufacturing as a career.
Management Views Workers as Easily Replaceable
In our new "outsourcing nation,” a widely held belief is that employees are simply costs to be cut and not assets to be valued. A reader commented to me:
“Conceptually it is hard to argue that capturing tribal knowledge from older, more experienced workers is a smart idea. The problem is management in the U.S. has gotten into the mindset that a "worker" is simply a replaceable "work unit." When decisions need to be made, it is the synthesizing of past solutions and results [with] new technologies and market demands that yield a course of action. It would be impossible to document all potential scenarios, so experience is the key. We need younger workers to understudy.”
The implication here is that older workers need to be approached well before retirement age to help train younger workers by sharing their tribal knowledge.
How Addressing Tribal Knowledge Addresses the Skilled worker Shortage
Manufacturing faces a two-sided problem: it not only has thousands of people retiring, but also does not have the training programs to train the skilled workers needed to replace them. The problem is just starting to manifest itself, as employers continue to report they can't find people with the right skills.
It has been at least 25 years since the alarm was sounded about skills shortages in manufacturing resulting from retiring baby boomers. Just about everyone who follows manufacturing has known about this problem for a long time. So the question is: Why didn’t we invest in advanced skill training before it became a serious problem?
Here's one reader's answer:
“Maybe if [management] had thought about the future before cutting training programs and downsizing highly-compensated experienced workers to make quarterly results, we wouldn't have this issue. Even if companies were willing to invest in documenting [tribal knowledge], not all of it can be. It is gained only through experience.”
I think to overcome manufacturing's image and job security problems, manufacturers are going to have to make a commitment to long-term (three- to five-year) training programs, as well as long-term employment security. So far, most large corporations have said they are looking for highly skilled people, but I haven't heard any of them commit to funding a three- to five-year training program to develop these skills, or a program to transfer tribal knowledge from their craftsmen.
How to Capture Tribal Knowledge
For years, when I was a general manager of a custom machine manufacturer, I struggled with this problem. I never made a lot of progress trying to capture key tribal knowledge but, in retrospect, I think I should have approached the problem as follows:
Identify the knowledge gurus—Some of our field service people had worked on all of the machines that were ever built. Two or three had a reservoir of knowledge, service tips, repair tricks, and machine idiosyncrasies that nobody else had. But, as technicians, they did not like to write, and it required special techniques to get the information downloaded from their brains.
There were also two engineering managers and two people in sales who had almost all of the information on costs and prices. They had all been involved in developing costs, prices, and quotations for more than 25 years, and a good deal of it was only in their memory, not written down. Had these people contracted bubonic plague, we would have been out of business.
Identify the knowledge—In the case of service techs, there was an enormous amount of service tips, diagnostic procedures, and information on how the older machines really worked that would be invaluable in service maintenance and operation manuals as well as training programs for the new hires. The cost/price information was also voluminous in terms of options, accessories, engineering solutions, and past applications that were all applicable to future sales opportunities. But if we could not get this information documented, we could not train their replacements.
Commit to the time—Both the transferring of the information and the development of new training programs is much like an apprentice program that will lead to journeymen. Management must accept that knowledge transfer requires a long-term investment of possibly three to five years. As soon as it is practical, it is necessary to appoint the people who are likely to replace the gurus to both learn from their mentors and to document the tribal information.
Transition older workers—Once you have identified the employees who have valuable tribal knowledge or skills that are difficult to replace, determine how many of them are approaching retirement age. Then develop a program to retain and employ them to share their knowledge, experience and skills with the next generation.
This can be a win-win: Some older workers may still want to work or may need to work because their retirement benefits are inadequate. If they are knowledge gurus, developing a staffing strategy to allow them to work part time as employees or on a contractual basis, while teaching their replacements, benefits the company and the worker.
Or, the experienced employee can be hired to complete projects that require special expertise. These could include short-term projects for design engineers or installation projects for project managers. Perhaps this may require recruitment of retired employees with special skills for the length of a contract.
The cost justification of such programs is always difficult, because you are asking the company to invest. The costs for the additional labor and training costs could be in the hundreds of thousands, and it is difficult to calculate in a return on investment formula. But the danger of doing nothing is endangering millions of dollars in future sales.
This problem is not going to be solved by just an aggressive hiring program of new people after the gurus have retired. It will take a long time to transfer all of the skills and knowledge needed to replace the baby boomers with most of the tribal knowledge.
So, in looking at these problems in the short term, I think the two most practical solutions are to do everything possible to capture and transfer the valuable tribal knowledge and to develop strategies to retain older workers to help. But first, have you done an assessment in your company that identifies the older workers and the knowledge that is about to walk out the door?