The North American industrial sector faces a critical challenge — an increasing skills gap. Organizations, particularly in manufacturing and power generation industries, are contending with a shortage of qualified candidates for skilled trade positions. As experienced workers depart, they take with them valuable insights that can have significant consequences for the business. To bridge this gap, companies must focus on not only recruiting new talent but also ensuring they retain and transfer knowledge from their existing workforce.

The Reality Behind the “Aging Workforce” Myth

Many attribute the skills gap to an aging workforce, assuming that older workers are leaving the trades in droves. However, data compiled by the U.S. Bureau of Labor Statistics (BLS) contradicts this assumption. The median age of America’s workforce has actually decreased slightly in recent years, and the trend is similarly observable in the manufacturing and utilities industries. Moreover, the BLS projects that the number of workers aged 55 or over will continue to grow until 2032, indicating that large, mature organizations will maintain a multigenerational workforce for the foreseeable future.

The real challenge lies elsewhere: fewer young people are entering skilled trades. The 2022 Stanley Black and Decker Makers Index found that, while many recognize the viability of trade careers, a significant portion of younger workers have little understanding of what industrial jobs entail and are hesitant to pursue them. This trend — coupled with the decline in military veterans, who have historically been reliable sources of talent for the trades — has exacerbated the shortage of skilled labor.

Understanding the Labor Shortage and Its Impact

The gap between the number of skilled workers required and the available talent pool is widening. For instance, manufacturing alone could need 3.8 million new employees between 2024 and 2033, with almost half of these positions potentially going unfilled. Another significant issue is that many young workers are entering the industrial workforce without the necessary technical training to immediately perform at the required level.

To foster the next generation of skilled workers, employers must address these challenges by attracting new workers and developing internal strategies, such as apprenticeships and partnerships with educational institutions.

How to Build a Knowledge Transfer Program

As organizations navigate these challenges, implementing an effective knowledge transfer program is critical for preserving valuable expertise before it’s lost. Here’s how to do it:

1. Identify the knowledge you need to retain: Start by identifying critical knowledge areas within your organization. Perform a gap analysis to understand where vulnerabilities exist, especially in processes where losing key workers could cause significant disruption. Consider specialized knowledge or processes where even the loss of one worker could have a significant impact.
2. Set clear goals: Once you identify the knowledge gaps, establish clear objectives tied to measurable business outcomes. Whether improving productivity or reducing downtime, these goals should guide the program’s direction. Regularly measure progress to ensure the initiative is moving in the right direction and make data-driven adjustments as needed.
3. Capture the knowledge: Identify your subject matter experts (SMEs) — those with the knowledge and skills essential for success. Your SMEs don’t have to be the longest-serving employees but should be individuals whose expertise aligns with your organization’s needs. Once SMEs are identified, decide on the best method to transfer their knowledge, which can range from mentoring and shadowing to creating video tutorials and technical documentation.

Effective Knowledge Transfer Activities

Person-to-Person Transfer

• Mentorships: One-on-one relationships enable experienced workers to guide newer employees.
  • Benefits: Deep, long-term knowledge transfer
  • Considerations: Time-consuming and not easily scalable
• Worker shadowing: New employees observe experienced workers to learn on the job.
  • Benefits: Practical, real-world training
  • Considerations: Short-term exposure to processes
• Coaching: Coaches support other employees, helping them develop their skills independently.
  • Benefits: Supports self-reliance and growth
  • Considerations: Can’t always provide immediate, task-specific guidance

Individual Transfer

• Tutorial videos: SMEs record videos explaining procedures or demonstrating tasks.
  • Benefits: Scalable, on-demand training
  • Considerations: Lacks real-time interaction
• need 3.8 million new employees: Manuals and system diagrams provide ongoing reference materials.
  • Benefits: Highly accessible in the flow of work
  • Considerations: Not a substitute for hands-on skills practice and knowledge-building
• Simulations: Scenarios allow employees to practice high-stakes skills in low-risk environments.
  • Benefits: Safe, practical learning environment
  • Considerations: Time-consuming and cost-intensive to develop

Measuring the Impact of Your Knowledge Transfer Program

To determine whether your knowledge transfer program is driving real results, it’s important to assess both how well learners retain critical knowledge and how effectively they apply it on the job. Post-training tests and on-the-job assessments can gauge knowledge retention while tracking the completion of knowledge transfer activities. Similarly, comparing participant performance with the performance of non-participants can reveal improvements in skills, knowledge application and role clarity.

In addition to these learning-focused measures, tracking key operational metrics can help you connect knowledge transfer to broader business outcomes such as:

• Equipment uptime: Higher uptime indicates improved employee competence in equipment operation and maintenance.
• Defect rates: Lower defect rates suggest workers are applying their knowledge effectively.
• Productivity rates: Increased productivity shows that the workforce is becoming more skilled and efficient.
• Maintenance costs: Reduced maintenance costs indicate effective preventive measures and stronger diagnostic and troubleshooting skills.

Maximizing the Effectiveness of Your Knowledge Transfer Program

For long-term success, ensure your program is formalized, sustainable and continuously improving. Here are some tips:

• Respect SMEs and their time: Consider offering incentives like flexible work hours or other perks to employees who serve as SMEs. Be mindful of their time and workload to prevent burnout.
• Set clear expectations: For mentorships, shadowing or other knowledge transfer methods, ensure all participants understand their roles and objectives. Providing training to SMEs on effectively teaching others can also improve the quality of the knowledge transfer.
• Sustain the program: A knowledge transfer program shouldn’t have a fixed endpoint. It should evolve based on feedback, changing needs and new insights. Establish a program administrator and secure executive sponsorship to ensure continued support and resources.
• Create a culture of continuous learning: Incorporate knowledge transfer activities into your organization at all levels, including onboarding. This practice will help fill current and future skills gaps and can reduce turnover by making employees feel valued and well equipped to succeed.

The Strategic Advantage of Knowledge Transfer Programs

Effective knowledge transfer programs ensure valuable expertise isn’t lost as veteran workers leave or retire. They also help strengthen your existing workforce’s capabilities, increasing productivity and reducing costs. By establishing a sustainable, measurable knowledge transfer program, organizations can safeguard their intellectual capital and drive long-term growth and success.

For more information on how to keep your industry ready for the future, check out GP Strategies’ article, need 3.8 million new employees