How do you measure the loss to a business when someone with great experience leaves? And can this be calculated in financial terms? Graham O'Connell offers advice.

Graham O'Connell replies:

I'm not sure you can easily measure the lost knowledge, experience and capability in simple financial terms.

Those working in knowledge management talk of harvesting this experience before it walks out the door. The explicit knowledge can, to some degree, be passed on to other people. But the implicit knowledge and deep skills are the real loss.

Some colleagues who work in technical and military environments have special arrangements in place, like inviting people back for a few days a few months later (in return for letting them retire a few days early). Others re-employ them on a consultancy basis. These are useful tactics if the person's experience is business critical.

In many instances people leaving and new blood arriving is like the changing seasons. It is inevitable and brings other benefits. However, the balance of nature is shifting in some organisations as there is a demographic time bomb.

Over the next few years a disproportionate number of very experienced people will, potentially, be leaving the workforce. For some organisations it would be worth planning to address the implications of this change now.

For example, could you run the bookend equivalent of an induction programme so that key workers experience a managed exit and the organisation mitigates, to some degree, against the inevitable loss. Just a thought.

Dr Richard McDermott has done some useful work on this in the States and has recently been working on a project with Henley Management College. If this is a big issue for you it might be worth considering joining the Henley Knowledge Management Forum: see www.henleymc.ac.uk

Rus Slater advises:

Do these folk have 40 years' experience or one year repeated 40 times?

Some people will be a great loss to the organisation when they go: they take with them goodwill that hasn't been passed to someone new, detailed knowledge that hasn't been captured, favours owed that have not been collected on and a memory of where the skeletons are buried!

There is plenty of anecdotal evidence that organisations often have to hire these folk back as consultants (at humungous cost) because no one actually considered the cost of loss.

There are others who move on to an enormous sigh of relief from the remainder of the organisation.

I don't think any one statistic that put a £ price would be of any real value. What you could try is doing some scenario planning, actually looking at the specific person and asking: "what will we lose when X retires?" Ask X, X's colleagues and staff, X's boss, X's customers (internal and external). Then you will have a view of the lost cost of X and you can plan your approach from there.

Mike Morrison adds:

If the sector is changing and the technology all but defunct - vinyl technology in an MP3 world - then it is worth very little.

The knowledge of client retention etc is measurable, as is the cost of bringing in resources to train.

Unfortunately many organisations do not value anything over two years old. Indeed even us in the training and HR worlds like to re-invent new stuff every couple of years and do not seem proud to be using 'older' techniques.

View the original posting:

What is the cost of experience?

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