As the Baby Boom generation of senior management heads off into retirement, American and European businesses are being warned they will suffer an unprecedented loss of skills and experience unless they get better at managing the transfer of knowledge from one generation to another.
A study by U.S research body The Conference Board has found most American, Canadian and European businesses are woefully ill-prepared for the exodus of the post-war Baby Boom generation from the boardroom.
Most firms do even not have a plan to manage and transfer knowledge and even fewer included cross-generational issues in what strategy they had.
"As the Baby Boom generation of corporate leaders and experts approaches retirement, businesses in the U.S., Canada, and many European nations face the loss of experience and knowledge on an unprecedented scale," warned Diane Piktialis, The Conference Board's mature workforce program leader.
"Younger workers can't be counted on to fill the void, as they lack the experience that builds deep expertise. They also tend to change jobs frequently, taking their technological savvy and any knowledge they've gained with them," she added.
How to ensure the vast wealth of knowledge and experience built up by the Baby Boomers does not simply walk out of the door with them is becoming a growing concern for business leaders on both sides of the Atlantic.
Last summer, a survey by consultancy Buck Consultants, WorldatWork and Corporate Voices for Working Families warned that employers were already starting to feel the effects as their sixty-somethings departing.
And as long ago as 2005 consultancy Accenture was warning that many U.S organisations were failing to capture critical knowledge and experience from older employees approaching retirement, with few seemingly able to transfer valuable knowledge to newer employees.
The Conference Board report has echoed Accenture's findings, arguing that conventional expectations that knowledge will simply pass down through long tenured employees simply no longer hold true.
The mobility and lack of loyalty of the modern workforce, and the fact that in many workplaces, as many as four generations work side-by-side means knowledge is not always filtered well throughout the organisation, said Piktialis.
Since knowledge did not exist in a vacuum, it was important to identify and evaluate what kind of knowledge company executives were interested in capturing, she recommended.
It was also vital that firms validated and documented their knowledge. Most successful transfer efforts actively involved both the source of the knowledge and its receiver, Piktialis advised.
While the receiver gained from the transfer in an obvious way, the source of the knowledge could sometimes need to be persuaded of the value of the process, she added.
"While the process may seem long and complex, it can sometimes be accomplished quickly in practice," argued Kent Greenes, program director, learning & nnowledge management council at The Conference Board.
"But several iterations through the process may be necessary when the knowledge is deep, complex, or large in scope," he added.
Because so much knowledge transfer was now cross-generational, from long tenured to younger employees, an understanding of different learning styles based on age was needed, he suggested.
Understanding generational learning preferences and adapting how knowledge was conveyed was now a key part of using knowledge effectively rather than just harvesting it.
Technology had also created a larger gap between the outgoing and incoming workforces than employers had ever experienced, the report pointed out.
For example, today's mentees might prefer to get instant messages from their mentor in real time rather than meeting or talking, according to a set schedule, or Generation Y employees might set up blogs to capture knowledge on a particular topic.
While many workers transferred knowledge and experience to get recognition or out of a sense of altruism, there was a growing business case for it, the report stressed.
The benefits for workplaces included increases in productivity, speed, agility, profits, and growth, it argued.
"Knowledge transfer is not as widely practised as the potential business benefits and workforce demographics suggest it should be," concluded Greenes.
"In a knowledge economy, firm-specific knowledge is critical to the sustainability, performance and innovation of organisations facing the imminent retirement of large numbers of baby boomers," he added.