The Value of Retaining Institutional Knowledge in Today’s Industrial Workplace

Today’s workplaces are dynamic. Workers come and go. When that happens, the experiences they’ve built up go also. The key is to retain the knowledge they have gained and keep it for others to use.

How important is this issue? On average, about 20% of a company’s staff leaves in a given year. The numbers have steadily grown over the last five years. And more workers are expected to leave the workforce in the near future as about 10,000 Baby Boomers will reach the age of 65 every day for the next 15 years.

Employees leaving for a different job or retiring take a substantial amount of invaluable business and operational knowledge, as well as organizational contacts and connections, with them. Such knowledge that a person acquires over time is known as institutional knowledge. It’s difficult to replace or duplicate.

And that has great consequences when there are assets, systems and equipment to keep operating and to maintain in manufacturing plants, facilities and municipalities. Someone who has worked with a system or a material for years knows nuances that are not in the owners’ manual. 

For example, a manufacturer of a motor that drives an assembly line conveyor belt may recommend lubrication every three months. But a person working with the motor for ten years knows from experience that the actual interval frequency can be pushed a bit. So, the factory can get an extra week of uninterrupted output before taking the equipment offline for maintenance.

Similarly, a technician might know that even though a piece of equipment has a wide specified temperature operating range, in reality however, even if the temperature does not exceed, but merely approaches, the upper limit, circuitry overheats and causes a failure. Such unplanned downtime disrupts operations and can be quite costly to a business or operation.

The same issue applies to handling materials, especially those that are hazardous. A person needs to know what regulations apply and the proper procedures to ensure safety.

Quantifying the Impact on Operations

When someone with institutional knowledge leaves a company, the remaining workforce risks becoming less efficient. The person or persons that replace the past employee needs to acquire new skills and expertise specific to that workplace to perform the job, and that can take a long time (sometimes years).

One estimate found that 42% of the skills and expertise required to perform a specific job capably will be known only by the person currently in that position. Put another way, when a person leaves, their remaining colleagues won’t be able to do 42% of their work, and someone hired into that role will need to learn 42% of it from scratch.

The average new hire will spend an estimated 200 hours working inefficiently. That time is consumed asking colleagues for information and waiting for responses, working by trial and error, or worse reinventing the wheel by spending time duplicating the work of his or her predecessor.

These inefficiencies can cause unnecessary delays in work projects, and an overall loss of productivity that can significantly impact a company’s bottom line.

A Smoother Transition

One way to speed this skills acquisition is to document everything and retain as much of the institutional knowledge of the departing employee as possible.

This is an area where LLumin can help.

LLumin READYAsset lets organizations collect and easily find detailed information about every asset in a plant, building, or enterprise. A new employee can use this information to find the physical location of a piece of equipment quickly. It lets companies upload interior photos, architectural drawings or auto CAD drawings of facilities. This makes a new employee’s job much easier. Additionally, READYAsset can store the manufacturer’s information about a piece of equipment, as well as historical data on the asset’s maintenance and performance, thus decreasing the risk of any operational downtime for that asset. 

One example of how the availability of this information can help a new employee and reduce downtime is when an alert is received indicating a problem with a piece of equipment. Lacking information about the equipment, the employee would need to search for the failing unit and then making additional trips to get the right components to do a repair. In the meantime, the equipment could go offline, causing downtime. Using READYAsset, the employee would know exactly where the equipment is located and specific pasts that need to be brought to that location to fix it. 

LLumin’s READYTrak Materials Management Software suite manages every aspect of an organization’s materials requirements. It includes inventory, purchasing, and usage tracking capabilities incorporating advanced functionality that provides the visibility needed for improved safety and regulatory compliance with OSHA, EPA, FDA, Sarbanes-Oxley, ISO and more.

With these solutions, the easy access to information eliminates many of the inefficiencies mentioned above. Even better, the notification and approval workflow capabilities give companies the ability to create notification workflows based on different criteria. Essentially, employees can capture their best practices and help retain valuable institutional knowledge. This helps organizations standardize processes based on institutional expertise, which can then be used throughout the enterprise by current and new employees. 

This, in turn, offers significant financial benefits. New employees can be brought up to speed on their duties fast; they require less training, and are more productive immediately. The organization additionally benefits from reduced downtime, avoid unplanned outages that can shut down operations.