Retention of Knowledge From “Baby Boomers” Prior to Leaving the Workforce

Background

As Baby Boomers leave the workforce, they take their immense tacit knowledge, problem-solving skills within the organization, and their understanding of company history (Sumbal et al., 2018). Research has shown that knowledge sharing reduces production costs, creates a faster process for new product development projects, increases team performance, has positive innovation capabilities, and increases organizational performance with sales growth from new products and services (Ganguly et al., 2019; Wang & Noe, 2010). In positions that are high in innovation, most work-related knowledge is tacit (Ganguly et al., 2019). Employees in these roles need to share knowledge to create a higher level of performance (Ganguly et al., 2019). Employee knowledge is crucial in building a competitive advantage in the market. Knowledge is a strategic resource enabling companies to gain a competitive advantage (Hau et al., 2016). However, not all knowledge serves has a sustainable competitive advantage, and having a formal process of sharing and retaining tacit knowledge in organizations is rare between employees (Hau et al., 2016). Organizational leaders must create a strategy to retain and motivate employees to share their tacit knowledge between Baby Boomers and other generations.

Prior to 2020, economic and social trend demographics showed a delay in Baby Boomers retiring (Burton et al., 2019). Delay in retirement was attributed to the improved health and poor financial situations of Baby Boomers (Burton et al., 2019). According to a study conducted by Pew Research Center, in the third quarter of 2020, about 28.6 million Baby Boomers left their jobs (Fry, 2020; Kelly, 2021). The study showed that the COVID-19 pandemic contributed to Baby Boomers leaving the workforce earlier than expected (Kelly, 2021). Older Baby Boomers want to retire but are unable to due to not having enough money to sustain them in retirement (Kelly, 2021). Millions of Baby Boomers retire each year from the workforce in the United States (Fry, 2020). The number of Baby Boomers retiring has increased annually by around 2M since 2011 (Fry, 2020). A survey by Coventry showed that over 75% of respondents plan to retire early (Kelly, 2021).

Many organizational leaders do not know when employees are planning to leave the workforce, and human resource managers cannot create a timeline for retaining tacit knowledge. A succession plan allows organizational leaders to solve problems that must be addressed and pass down tacit knowledge before the employee leaves the organization (Sammer, 2020). When valuable knowledge is shared within the organization, the company can maintain its competitive advantage in the long run (Hau et al., 2016). Loss of tactic knowledge has motivated organizational leaders to develop knowledge management strategies and retain tacit knowledge (Hau et al., 2016). Knowledge sharing is one of the most unique, valuable, and critical resources for an organization to achieve a competitive advantage (Ganguly et al., 2019). Knowledge sharing contributes to competitive advantage, reduces cost, improves team performance, and fosters innovation (Ganguly et al., 2019).

Tacit knowledge makes up 85% of all organizational knowledge (Lin et al., 2016). Pew Research Center, the number of Baby Boomers who retired in 2020 increased by more than 3M in the third quarter (Rice, 2021). As more Baby Boomers leave the workforce, organizational leaders need to retain tacit knowledge. For an organization to continue to be innovative and competitive in the market, retention of the tactic knowledge of the employees in their workplace is essential. Organizational leaders face competition and must be aware of their innovative capabilities to remain competitive (Ganguly et al., 2019). Organizational leaders must develop strategies to retain tactic knowledge of the Baby Boomer generation before leaving the organization.