It’s been reported that about 4.4. million Americans will attain age 65 this year—12,000 people a day. While those attaining age 65 in 2024 won’t be eligible for full Social Security retirement benefits until they’re 66 years and 10 months, these numbers should still make employers think about workers retiring—now or soon. Yes, many seniors are staying in the workforce, but not all. Small business owners may have done planning for their own retirement and what that means for their companies, but don’t overlook planning for employees’ departure because of retirement or other reasons.
Overview of knowledge transfer and succession planning
When an employee leaves the company, be sure there’s a knowledge transfer. What that employee learned about how to do the job and how the company operates as well as details about customers, vendors, and the company culture are critical for the business to continue operating well when that employee is no longer with the company. More specifically, knowledge transfer includes:
- Explicit knowledge transfer—written procedures, documents, manuals.
- Tacit knowledge transfer—personal interactions and experiences.
- Inter-organizational knowledge transfer—information about collaborations.
- Intra-organizational knowledge transfer—information between individuals and teams.
Why is succession planning so that there’s knowledge transfer important? Here’s one example: Several years ago, the National Safety Council found that 75% of organizations didn’t have succession planning for occupational safety and health functions. Because of the lack of succession planning in this area alone, businesses have experienced serious OSHA penalties (the maximum penalty for 2024 is $15,625 per violation).
The particulars of a job may be complex, even more complex than you initially think. Sure, you can detail the aspects of a position—the tasks that normally are or should be completed on a daily/weekly/monthly basis, but that may not cover what actually goes on. What are the job responsibilities? What are the projects being worked on and where do they stand? What are the inter-personal aspects of the job and the players involved?
What to do: Smart Tribute’s beginner’s guide to knowledge transfer lists 6 steps for knowledge transfer:
- Identify the knowledge to be transferred
- Identify the target audience (another employee; a team)
- Choose the right method (shadowing, mentoring, documentation)
- Develop a structured approach (checklists, timelines)
- Create a supportive environment
- Measure and evaluate success
It may be helpful to have one employee shadow another to see how things are done and learn things that are not easily communicated. Mentoring on a regular basis is another way to ensure that knowledge is transferred.
Records are essential to every business. As Ross Perot, Jr. said: “You really need to be on top of what you own, and you’ve got to be on top of your record-keeping.” But written and electronic records are vulnerable to omissions, destruction, or other actions that make them incomplete or missing.
Much focus has been on cybersecurity and fears of hacking, ransomware, and other online threats. But what would happen if a disgruntled worker wiped company data off his/her computer or stole written documents just before quitting?
What to do: It’s helpful to have multiple ways to access records. For example, a file on an employee’s laptop should be saved to the cloud. Paper records should be scanned and saved. And there should be ongoing review of recordkeeping practices to see that they are being followed.
In small businesses, it’s often difficult to have redundancies; there just aren’t enough people or money to accomplish this. But give consideration to some cross training so that if one employee leaves—either through a planned retirement or because of a sudden event (e.g., quitting, firing, disability)—the company is covered. Also set practices for protecting company information from internal threats.