MiMfg Magazine August 2019 - Page 13

August 2019 M anufacturers face a people problem. Whether it’s the rapid retirement of the Baby Boomer generation (estimates indicate 10,000 people a day turn 65, with that number expected to rise as much as 20 percent in the next 10 years) or the reduced rate of Generation X and millennials entering the industry workforce, talent is becoming an even more coveted resource. However, it’s not just the people themselves who are becoming a precious commodity, it’s the crucial intangible they possess — knowledge. “The organization itself doesn’t have the knowledge, it’s the people within the organization that have the knowledge,” explained Ken Mall, managing director of workforce consulting for EDSI Consulting. “While it can be difficult to define the cost of losing this knowledge, there is a real cost to the organization.” Mall continued, saying that “the costs could be as simple as taking longer to perform a task than it used to (the added cost of labor) or the impact can be more dramatic. When skilled trades people with specialized knowledge retire, he or she takes that knowledge with them. If a machine or a process breaks down and the person best-equipped to fix it is gone, that can have lasting financial impact along with real and dramatic consequences.” Tacit, tribal or institutional knowledge is incredibly valuable to a company’s long-term success. As people become better at the jobs they do, much of the “secret sauce” behind that effectiveness isn’t fully understood. It’s a mix of experiences gathered through months, years and decades of doing the job and it’s almost always something not written down or well-documented. Until they are asked the important questions of how they do the job or why do process X that way, that knowledge is always one retirement, one career change or one death away from being lost. Today’s manufacturer faces two critical problems: 1. The retirement of the Baby Boomer generation the manufacturing industry has come to depend on and one which represents the majority of current leadership positions within a company. Loss of their knowledge represents more than just the loss of experience on the facility floor; when they retire, they take with them skills accumulated across many positions and the relationships and networks they’ve developed over decades. 2. Multiple generations, Generation X and Millennials in particular, who are less likely to favor industry jobs than past generations and, this is key, far more likely to switch jobs and careers over the course of their lives. According to a Gallup poll, 36 percent of millennials say they would look for work somewhere else within the next 12 months. MiMfg Magazine For manufacturers struggling to retain the knowledge of employees — and MMA’s annual manufacturing survey suggests general talent retention as industry’s most pressing business challenge — they are facing the double-edged sword of losing it both from their longest-tenured workers and their newest hires. While companies who fail to retain the irreplaceable knowledge of its workforce could fall by the wayside, it’s not all darkness for the well-prepared manufacturer. “The Baby Boomers’ aging out of the workforce is creating new opportunities to capture knowledge and has certainly increased the need for knowledge retention,” said Mall. “It is true that employers continue to have problems hiring new employees, and those issues will likely continue through in the near term. However, implementing a knowledge management program can actually help retain employees by engaging them. Through the process, they might also find new and better ways to get the work done.” With as many as five generations working side-by-side, now is the perfect time for employers to work to secure the institutional knowledge and the legacy of the workforce while providing younger generations with a sense of trust and career confi- dence that will encourage them to stay in one place. Developing Your All-Encompassing Knowledge Retention Strategy The specific how behind each manufacturer’s knowledge retention will vary based on everything from the type of business to the company’s size and location to even the minutia of which positions they focus on. Generally, however, there are six steps a manufacturer should go through to implement a viable strategy: 1. Organizational analysis 2. Job task analysis 3. Skill assessment survey 4. Skill gap analysis 5. Next step identification (e.g. training plans and opportunities for mentorship) 6. Continuous improvement “Like every other aspect of manufacturing, it’s not the companies that do something on a whim that succeed — it’s the businesses that develop a strategy, communicate the purpose and importance of that strategy to their talent, and stay committed to implementing the strategies that tap into the long-term rewards,” said Chuck Hadden, MMA president & CEO. 13