What is institutional knowledge and how to preserve it

By 2030 73 million Baby Boomers will reach retirement age. As they leave the workforce, they’ll bring their 40+ years of work experience and knowledge of the job with them.

Does your company have a strategy for passing along this knowledge to your current workforce? If not, you’ll spend countless hours training and retraining employees whenever you experience turnover. Not to mention many of the skills learned on the job, or a worker’s institutional knowledge, can’t be taught in an employee manual.

Here we highlight just what institutional knowledge is – and how your company can preserve it.

What is institutional knowledge?

Institutional knowledge, known as institutional memory to some, is the collective understanding and information employees have about their company. It can include expertise in organizational policies, worker skill sets, optimal techniques/processes, previously recorded data, and general know-how about how the business operates.

Institutional knowledge can be split into two groups. Tangible, or explicit institutional knowledge, is information that a company can store and send to its workforce through spreadsheets, employee handbooks, and other paper or digital documents. Intangible, or implicit institutional knowledge, on the other hand, is individual information that a worker collects through their own experiences in the company.

Because intangible institutional knowledge arises from individuals and their own experiences, this beneficial information can be lost once the individual leaves the company. And if this information comes from a veteran of the business with decades of experience in the field, this knowledge can be more valuable than your basic employee manual.

Why are employers in danger of losing it?

With 4 to 4.5 million Americans quitting their job every month, retention is becoming a real issue for employers. Some industries, like manufacturing, are seeing even more quits each month after the COVID-19 pandemic as workers are looking for more flexibility and benefits. 63% of managers in the manufacturing sector reported an increased number of people quitting their job last year.

In addition to millions quitting their job to retire, younger talent are also looking to switch their jobs. According to Pew Research Center, one in five Americans are likely to look for a job in the next six months, across all ages, searching for higher salaries and better opportunities.

With millions of workers looking to change jobs or retire, they’ll bring institutional knowledge of their current job with them when they leave your organization. By having a system in place to preserve institutional knowledge you won’t have to start with a blank slate every time an experienced employee leaves.

Strategies for keeping institutional knowledge

In order to prevent the loss of institutional knowledge, your organization will need to integrate knowledge transfer and community building into business strategies and prioritize the retention of current employees. Here are five main strategies to adopt:

1. Encourage continual information exchange

The most important strategy to fighting institutional knowledge is to promote knowledge exchange before an employee even thinks about leaving their position. This can include:

• Using productivity tools: By having workers use the same task management tools, spreadsheets, and applications, multiple team members can have access to the same data
• Creating knowledge maps: As a team, create a visual representation of where employees can find experts and information about dedicated topics
• Storytelling: Have experienced team members share their stories about how they get their work done
• Exit interviews: Once an employee confirms their exit, have team members interview them to share job-specific expertise and individual working strategies

2. Build a community of collaboration

In order to get employees comfortable enough to share their institutional knowledge, you’ll need to build up a collaborative working environment. Hosting brown bag lunches, developing a job shadowing program, and creating networking groups/workshops are just some ideas to get employees together. You can even bring in experts to educate your workforce about the importance of diverse ideas and how sharing these ideas can lead to an optimized working environment.

3. Prioritize retention

By keeping your experienced employees in your workforce you’re also keeping their institutional knowledge within your workforce. Almost two-thirds of hiring managers said that keeping or retaining current employees should be more of a priority than hiring new ones, due to both keeping institutional knowledge within the company and the high cost of hiring.

So how can you keep your valuable employees in it for the long haul? For blue-collar jobs like manufacturing, 73% of managers felt that increased compensation had helped keep their company competitive in their ability to recruit and retain employees. Across all industries, managers cited increasing employee benefits, including expanding health insurance, as key to retaining employees.

4. Keep your employees engaged

Satisfied and engaged employees won’t be looking for work elsewhere. How to keep employees engaged comes down to making them feel important and valued in your company. Ask for their feedback, listen to their ideas for improvement, and invest in their careers through training and mentorship programs.

5. Introduce phased retirement

Phasing retirement will give experienced workers more time to share their institutional knowledge with others. With phased retirement, an employee reduces their working hours gradually, working more years on a part-time schedule rather than entering full retirement at age 65. Some pensioners will even return to work on a consultant or temporary basis during their golden years, giving more chances to pass on their institutional knowledge to less-experienced workers.

If you’re struggling to retain talent, and the institutional knowledge they hold, Adecco can help. Our workforce experts have years of experience advising organizations on how they can find qualified talent and keep them happy long after their first day. Check out our case studies to see how we’ve helped other companies preserve their workforce or contact us directly to get in touch with an experienced colleague.