In his enquiry about employee retention (November 1999 messages LO23242),
Don Dwiggins raises an important issue that goes to the heart of
productivity and competitiveness. He refers to a company which is waking
up to the idea that it is worth making an investment to retain employees
rather than hire new ones. Evidently, the company concerned has realised
that there is a downside to the flexible labour market.
Unfortunately, the rate at which people move from job to job is now so
great that the conventional approaches to retention can only address the
margin of the wider problem. In virtually every Western industrialised
country - and many emerging countries - most organisations now replace
almost their entire employee base within the period of a typical
industrial cycle.
In the UK, for example, which ranks fourth in the league table of employee
mobility, research shows that new entrants to the workforce can expect to
have 11 different employers in their working life times. On this basis,
they will be in situ with the same employer on average just 4 years during
a 44-year working span. That's assuming no periods of unemployment. Since
this research was done, mobility rates have increased even further.
For any organisation, trying to deter this flood is the equivalent of
trying to shore up a broken dam where - ironically - the dam wall is the
construction of companies who have actively encouraged the flexible labour
market for good reasons (an easy way to implement change/slash costs
quickly when they get into trouble). However prudent it may be to have
some processes in train to encourage longer periods of employee tenure
(for this, see Washington-based Corporate Leadership Council's report on
"Employee Retention: New tools for managing workforce stability and
engagement"), I fear the battle for continuity is well and truly lost.
On this basis, organisations should rather (also) directly address the
specific downside problems of the flexible labour market, them being
constant jobs disruption and the inability to learn from experiences, the
consequences of which can be seen in the endemic firefighting, overrun
budgets, late project completions and the conveyor belt of repeated
mistakes, re-invented wheels and other unlearned lessons that expensively
litter industry.
>From my work in this field, knowledge loss from the flexible labour market
is the single biggest source of know-how leakage out of companies.
Embodying the institution's inventory of tried and tested experiences -
what is called Organisational Memory (OM) - this uniquely corporate form
of intellectual capital is the most important constituent of any
institution's durability. Without it - this is a syndrome I have called
"Corporate Amnesia" - companies lose the ability to benefit from their own
hindsight. In simple terms, if OM is not passed on, new employees end up
applying the lessons (where they are remembered) of other employers, whose
way of doing things, corporate environment and market circumstances are
always very different. In even simplier terms, the experiencial edifice
that characterises an organisation's ability to perform is being
constantly torn down rather than being built upon - to the detriment of
productivity and competitiveness.
Curiously, OM gets minimal attention as a formal management tool in most
companies, with most opting to invest exclusively in conventional
training, the benefits of which are as mobile as their employees.
Alongside this, many companies typically insist that experience is
replaceable. They also argue that erstwhile practice is irrelevant because
circumstances always differ but then happily reward the fruits of
experience in favourable salary deals. Through flexible working
practices, this same experience is then either discarded or superseded by
successors who, without any received inheritance, promptly re-invent the
wheel. What all these mind-sets do is wholly ignore the value of "tacit"
and "episodic" knowledge - the company-specific "how" of know-how that
makes organisations tick - and the learning opportunities inherent in all
experience.
Mr Dwiggins asks "How should we start?" Organisations have already paid
for their experience at least once. If OM is not to pass beyond reach, it
needs to be managed - just like any other corporate asset. The trick is to
do it before it walks out of the front door.
For further information of how companies can manage their OM, see the
website www.pencorp.co.uk
For a wider look at the issue of "Corporate Amnesia", which includes the
management of OM, see my book of the same title (Butterworth Heinemann),
which was published last year.
Arnold Kransdorff
ak_pencorp@msn.com
--"ak_pencorp" <ak_pencorp@email.msn.com>
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