Securing Knowledge Before Experienced Employees Leave

Why more than a worker leaves with experienced employees

The foreman knows which machine needs ten minutes longer to warm up in winter. The bookkeeper knows which customer always pays only after the second reminder and yet never defaults. The field salesperson knows whom to call at the major customer when the official contact gets stuck. None of this is in a manual.

In the coming years, many companies will see people retire who have been there for decades. Unlike a resignation, retirement is usually foreseeable long in advance. Yet the handoff often begins only in the last weeks, when the successor has just been hired and the farewell is already being prepared. Then there is time for a list, but not for the knowledge that cannot be written on a list.

This article answers one question: how does a small company pass on an employee's experiential knowledge before they retire? To answer, we first clarify what kinds of knowledge exist, then present the SECI model, examine a study that measured handoffs before and after retirement, weigh writing down against joining in, and derive a plan for the last twelve months.

What an experienced employee knows is only in small part what they could write down.

Explicit and tacit knowledge: what can be written down and what cannot

Explicit knowledge can be put into words, numbers, or drawings: a price list, a workflow, a customer file. It can be written down, filed, and read by others. Tacit knowledge, by contrast, is bound to the person. It shows in action, in a feel for a situation, or in judgment about what matters right now. The philosopher Michael Polanyi put it in the sentence that we know more than we can tell (Polanyi 1966).

Riding a bicycle is the best-known example. Nobody learns it from a description; you learn it by doing it, at first with someone holding the bike. It is similar in a company. A newcomer can read how a custom job is priced. When to add a surcharge because the customer typically renegotiates is learned only after seeing it a few times.

For the handoff before retirement, a sober insight follows. A handoff folder captures explicit knowledge. Tacit knowledge, often the more valuable, passes on only through working together, and that takes time. How sales knowledge is collected permanently in one place is described in the article on sales knowledge management. Here the concern is the special case in which one person leaves and their knowledge must be passed on within a limited period.

The thinking model: Nonaka and Takeuchi's four paths of knowledge

The Japanese organizational researchers Ikujiro Nonaka and Hirotaka Takeuchi described how knowledge in companies moves between tacit and explicit (Nonaka and Takeuchi 1995). Named after the initial letters of the four paths, their model is called the SECI model. It is helpful because it names the right path of transfer for each kind of knowledge.

Most handoffs work only on the third path: documents are collected and organized. The model shows why that is not enough. Tacit knowledge only gets moving through socialization or the more laborious externalization, and both require both people to be present. Only through internalization does the transferred knowledge become the successor's own experience.

What a study of handoffs before and after retirement shows

Most studies of knowledge handoffs survey only one side, usually the person leaving, and do so before they leave. Biron, Turgeman-Lupo, and Zaid-Dominik (2024) did it differently. In a large technology-intensive company, they surveyed triads consisting of the departing employee, the successor, and the supervisor, once before retirement and again about six months afterwards. Of 189 retirees approached, 81 complete triads resulted.

The retirees were 66 years old on average and had been with the company for 37 years, their successors about 42 years old. Before retirement, supervisors rated how thoroughly the departing employee passed on knowledge, for example through an overview of responsibilities, schedules, contacts, and interfaces. Six months later, they rated how much the transferred knowledge contributed to performance, such as customer satisfaction or cost savings.

The result: a thorough handoff was associated with more useful knowledge for the successor, but mainly when supervisors were perceived as supportive and inspiring, called transformational leadership in research. The relationship was strongest when there was also a culture that supports learning and experimentation. For a small company this means: the handoff is not solely a matter for the two people involved. Whether it works depends heavily on whether the owner or manager actively accompanies it.

The article on succession and sales describes a similar finding for the handoff of customer relationships in family businesses: relationships cannot be handed over on a set date, only gradually, by introducing and involving the successor.

Write it down or join in? Two perspectives

The first perspective relies on documentation. What is written down remains, even beyond the next change. Anyone can read it, and the company is not again dependent on one person. From this view, the departing employee should spend the last months mainly recording workflows, contacts, and tricks.

The second perspective relies on joining in. The most valuable knowledge cannot be written down anyway, and documents nobody needs are not read. From this view, the successor should spend as much time as possible alongside the experienced person.

I consider both paths necessary and the SECI model the key to combining them. Joining in as a tandem is the path for tacit knowledge. But every tandem should have a by-product: rules of thumb that the experienced person voices while working together are written down immediately. That way joining in also produces a piece of documentation, and the company does not depend on one person again at the next change. How such rules are recorded as work instructions is described in the article on how to write work instructions that get read.

The knowledge inventory and the twelve-month plan

The tool of this article is the knowledge inventory. The experienced person, their supervisor, and if possible the successor go through together what this person knows that nobody else in the company knows. For each item, three questions are answered: what exactly is it? Can it be written down, or does it have to be shown? By which path and by when will it be passed on?

1. Month 1: inventory

   The knowledge inventory is created. What only this person knows is on one page for the first time.

2. Months 2 to 4: secure explicit knowledge

   Contacts, terms, and workflows are transferred into the existing systems, not into a separate handoff folder.

3. From month 3: tandem

   The successor works alongside regularly, first as an observer, then with their own subtasks. Rules of thumb that are voiced are noted immediately.

4. Months 7 to 11: role reversal

   The successor takes over the tasks, the experienced person watches and corrects. Customers and suppliers get to know the successor personally.

5. Month 12: completion and contact afterwards

   The inventory is checked off. Where possible, it is agreed that the retiree remains reachable for questions during the first months.

The bigger picture

Retirement is the most visible case of knowledge loss, but not the only one. Illness, resignation, or an accident take knowledge away just as much, only without warning. Phaladi and Ngulube (2022) found in South African state-owned enterprises that knowledge loss arose mainly from resignations and an aging workforce, and that most of the companies lacked established practices for it. A company that creates a knowledge inventory for retirement should therefore also create one for other key people before any occasion arises. This also helps with cover during vacations, as the article on arranging deputies describes.

The study by Biron and colleagues also draws attention to the role of leadership. A handoff works when the supervisor makes time for it, allows questions, and shows that the experienced person's knowledge matters. For owners this means: the handoff belongs in their own calendar, not only in those of the two people involved. And where the owner is the one who will leave someday, the same applies to their own knowledge.

• There is a knowledge inventory for every key person from their mid-fifties.
• The handoff before a retirement begins at least twelve months in advance.
• Successor and experienced person overlap for at least six months.
• Rules of thumb from the tandem are written down immediately.
• The owner accompanies the handoff with fixed appointments.

Conclusion: how is experiential knowledge passed on before retirement?

The question at the start was
a small company passes on an employee's experiential knowledge before they retire. The answer begins with the distinction between explicit and tacit knowledge. Explicit knowledge can be transferred into existing systems within a few weeks. Tacit knowledge, according to the SECI model, passes on mainly through working together and therefore takes months and an overlap between the experienced person and the successor. The study by Biron and colleagues also shows that a thorough handoff is useful above all when leadership actively supports it. A twelve-month plan with a knowledge inventory, tandem, and role reversal combines both. Knowledge is not lost because someone leaves, but because passing it on starts too late.

The next step

1. Write down which employees are likely to retire in the next five years.
2. Choose the person whose departure would leave the biggest gap and schedule an appointment for the knowledge inventory.
3. Clarify when a successor must be hired or designated so that the two overlap for at least six months.
4. Decide where explicit knowledge will be kept in the future, so that no separate handoff folder emerges.
5. Put fixed appointments in your own calendar at which you accompany the handoff.

The knowledge inventory conversation is often valuable for the experienced person too. It shows them that their knowledge is seen and turns the farewell into an orderly transition.