The employee turnover pitfall that no one talks about

Faster, better, smarter – there’s always the next employee. The one who can bring a fresh perspective, extensive experience and a new tonus. Yes, you might have lost 10 employees this year but you probably gained 8 new ones, ready to outperform them and drive revenues. Employee turnover has its costs but it’s a natural process after all.

In the end it’s a win-win-win. Or is it?

There’s one aspect that always seems to slip through the analysis and the evaluation process: knowledge management. The 10 employees you lost this year have left with a considerable amount of knowledge and experience that may or may not have been backed-up. Leaving the newly hired employees with an adjacent extra cost in information gathering and familiarization with your processes.

If your company relies on human relationships rather than machinery, your progress and innovation depend on employee strategies that may very well leave with those employees if you’re not careful. Employee knowledge is critical to any organization because it has a fundamentally intangible value and cannot be not easily replicated.

“If a member suddenly disappears, a grief process can ensue, which certainly would interfere with productivity, in addition to leaving an emotional hole. When a person transfers to a new assignment, it can also leave a knowledge hole. When an individual leaves a legacy of knowledge, they are remembered reverently, and the morale of the company benefits.”

Joy Kosta, Source: Manpower Group Solutions

Having an employee retention strategy is vital

Your employees are the driving force behind your business. With every month that passes, every project and every team event, their value increases and so does the risk of losing them. And here’s why:

o   They have a system – they know how to get things done and who to talk to.

o   They have formed working relationships – they know how to communicate and work together with their teams. They trust each other.

o   Their expertise and experience has translated into every project and work that they’ve done.

o   They brought in customers or they have designed unique customer experiences that have formed your brand perception.

On the other hand, if you fail to retain them, you will face new recruitment and selection costs, training and adaptation resources and you will have to work hard to minimize the disruption of work morale and relationships brought on by someone with a different way of working and a different experience behind them.

In a recent survey by Teradata, a division of data warehousing company NCR Corp., in Dayton, OH., executives reported that increased turnover causes diminished effectiveness in businesses and that losing a good employee means far more than a slight drop in corporate productivity and profits.

“Vital corporate knowledge walks out the door every day for good, never to return. (…) Capturing this knowledge is a new challenge for corporations. Employees’ intimate knowledge—of customers, suppliers, strategic partners, and more—must be captured during their tenure. If it is not, corporate turnover could be one of the greatest costs in business today.”

Teradata COO Mark Hurd, Source: TechRepublic

Our advice? Create a workplace where people enjoy coming to every day. A workplace that provides meaning, culture, collaboration and appreciation for everyone’s contribution. Find out what keeps your employees engaged and what you can improve to retain them.

How to minimize the risks of knowledge loss

Information systems

Create documentation for your processes. Don’t leave anything to chance. Even if you’re a small company, just getting started with 5 employees. Your goal is to be successful, right? In that case, what you’re doing now is laying the foundation for a future 200 employees company that will require clear processes and documentation.

Few people remember the pre-digital era so, naturally, the first thing that comes to mind is an information management system – a tool.

Find the right platform for your organization. Consider storage, communication features, organizing features, team collaboration and a reporting system.


Create a collaborative culture in your office. Encourage employees to reach out and share information, discuss ideas and learn from each other.

Social interaction is a key driving force in any working environment, regardless of companies’ choice to acknowledge that. Employees cannot be confined to tasks, deadlines and working hours. You don’t stop being a social human being at 9 am every day.

We rely on our coworkers to find solutions, share our success or get help when we’re in a difficult situation. That’s knowledge transfer and retention. Every interaction and relationship formed ensures that the loss of an employee will not mean the loss of everything that employee knew.

Succession planning

Define and plan your succession process. Identify critical management positions and key performers who could be developed for leadership roles and start preparing them for their next position.

Train your successors and have a transition period in which they can absorb essential knowledge and gain important insights. Formalize this process and ensure that responsibilities are handed off.

Also, make sure you document job roles.

Exit process

Finalize an employee’s experience in an exit interview. First of all because it’s the right thing to do. This person invested in your company, they put in their time, experience and dedication and their experience should have a clean and clear ending.

Even if they are going to work for the competition. That actually increases your value. Keep in mind that they are leaving with knowledge and contacts that remain at their discretion. However they will chose to use them, it’s your responsibility to end the collaboration on good terms.

Workplace culture

A company’s culture is mostly defined by its people. This is where the fundamental knowledge that pertains to a company should be found. Everyone’s contributions, experiences and all social interactions can be found in a company’s culture.

Create a strong company culture. Here are a few hints to get started.

By focusing on employees throughout their entire experience, you can erase the line between organizational knowledge and individual knowledge. Make sure that all employees possess that organizational knowledge and use it together to further business objectives.

Bottom line

The impact of knowledge loss is often underestimated. Managers should have a clear strategy to reduce employee turnover and, with it, minimize the loss of essential information that ensures a company’s progress.

Ultimately, employees are the key to both issues. Invest in your employees and offer them an engaging workplace, where they can gain, share and foster knowledge. At the same time, make sure you have a solid plan to retain as much of that knowledge as you can, be it in systems, people or culture.

Image credit: Andy Matthews under C.C.2.0