The US economy is humming along, and the job market is getting ever tighter. Today there are roughly 1 million more jobs than job seekers in the US. This means that many companies, especially in growing industries, are spending a lot of time looking for, attracting, and retaining employees in a very competitive market. And if that isn’t hard enough, adding to this situation are:
- the “brain drain”,
- an aging of the US workforce,
- large-scale layoffs, and
- changing job expectations.
Brain drain is the loss of highly educated talent from one era to another due to shifts in mobility patterns affected by factors such as job opportunities, pay scales, cost of living and weather. The US Congress Joint Economic Committee (JEC) define a highly-educated “leaver” as someone in the top third of the national education distribution who resides in a state other than her birth state and is between the ages of 31 and 40. And when looking at either “absolute net brain drain” (based on national education thresholds) or “relative brain drain” (based on state education thresholds), the Midwest, Central Plains and Northeast (except for MA, CT, VT) are losing their best talents at an alarming rate. Companies in these regions need to be aware of this in order to implement strategies that will retain employees or, at a minimum, retain their knowledge.
In the US, we have seen a continual aging of our population with the US Census Bureau predicting that by 2035 older adults (65+) will edge out children (under 18) in population size for the first time in our history. And although roughly 60% of the 75 million baby boomers are still working, the oldest are now in their 70’s while the youngest are in their 50’s, and there are an estimated 10,000 per day that are retiring! This causes a workforce gap that is a challenge as there are simply not enough Gen X workers, and Millennials lack the necessary work experience or training. Therefore, we see a continually shrinking talent pool, as well as a decrease in available knowledge and experience that needs to somehow be filled. Changing work environments and flexible working hours can help keep more experienced workers engaged, but this is only a short-term fix.
In the US, large-scale layoffs have become standard as companies try to cut costs, right-size production, and compete in the global economy. In the Great Recession (Dec. 2007 – Jan. 2010) over 8.7 million Americans lost their jobs. And even though the unemployment rate is at a record low, and the pace of layoffs has slowed, US employers have announced the most in the first half of any year since 2009 (370,000, +35.8% vs same period last year), according to Challenger, Grey, & Christmas.
And although one might think that this expands the pool of available workers, industries tend to contract causing a glut of specialized workers who aren’t trained for other jobs, and there are many unintended consequences of layoffs. According to a 2018 article in the Harvard Business Journal (Gupta), companies that shed workers lose the time invested in training them as well as their networks of relationships and knowledge about how to get work done. And even more significant are the negative effects on layoff “survivors”, as a study found that downsizing a workforce by 1% leads to a 31% increase in voluntary turn over the next year.
Finally, a new generation of workers (Millennials) ushers in a new set of skills, expectations and priorities. According to the Pew Research Center, Millennials are less likely to have college degrees (only 21% of males and 27% of females) as they opt to spend their time and money on life experiences or postpone higher education until they know what they want to do. If that trend continues, the reduction of the pool of highly educated talent will make it even tougher for companies to find even the entry-level employees that it needs. In addition, companies need to rethink their day to day operations as the generation that grew up with technology and access to information is drawn to transparent, collaborative organizations with open financial management and hierarchies, flexible working arrangements, and a proactive social responsibility agenda. Millennials will work, but work won’t dominate their lives as it did with the baby boomers.
So, what can a company do?
In most companies, it has already become a full-time job recruiting employees as they use new ways and tools to find candidates. However, this alone will not be enough to fill the great need that companies have. Instead, they must look towards:
- successfully on-boarding new employees,
- leveraging employee skills to new areas,
- capturing, structuring and sharing employee knowledge and experiences,
- supporting a better work – life balance, and
- enabling employees to work on causes or products that matter to them.
However, this is not a simple task and there are many complexities involved in engaging with employees, understanding their skillsets, experiences, and interests, motivating them to get involved in new areas and with new people and turning all of this information into company intellectual property (IP) that can be used by all. This is where knowledge management (KM) system helps!
A knowledge management (KM) system is not simply a database or a SharePoint site that ends up as a corporate black hole (sucks information in, only never to be seen or used again). KM is an environment where employees can easily store, find, use, and collaborate with information on topics related to their job, a project or an interest. A KM system is where experienced employees can mentor new employees by sharing their wealth of information and lesson learned, where employees can utilize expertise to work on special projects of interest, where product innovation ideas can rapidly be tested and advanced, or where companies can solve customer/warranty/field issues.
The benefits of KM are huge as new employees make less mistakes and are productive much faster, new ideas and products can be designed and brought to market in less time, and quality/field issues are significantly reduced. For a company, this ultimately results in higher revenue and profits, while improving its brand image and customer relations, and increasing employee retention.
Contact Bassetti Americas (firstname.lastname@example.org; +1.888.388.8997) to find out how a Knowledge Management (KM) system can benefit your company.