Retention Strategy & Implications on Social Capital

Attrition seems to have interesting side effects from a KM perspective.The idea of knowledge walking out of a company when a knowledge worker leaves is just one dimension of the problem. The implications of attrition on the flow of knowledge within networks of which the employee was a part of and the resulting impact on social capital(which is not evident upfront) has been getting a lot of attention.

As a corollary companies that succeed in maintaining attrition levels below industry averages seem to have a competitive advantage.

Larry Prusak,in one of his speeches said:
If you have constant churning of the workforce, for example, the Big Five consulting firms, are up to 40% turnover, you have pure transaction organizations. There is no trust because there are no durable networks, except at the very top. That’s true in a lot of organizations, organizations that like stirring the pot, that like constant turnover. You don’t get durability in networks and you lose social capital.

He goes on to say: “They don’t work necessarily for money. What do they work for? Recognition. Identity. Feelings about your coworkers really count. And that’s what’s ignored in the workplace so often, including in my own firm, in any large firm. We have forty firms as members of the Institute for Knowledge Management, and all of them are facing these issues.”

It is imperative that formal HR policies geared towards employee satisfaction and retention are augemented using techniques to build “rich and dense” social networks. Communities of Practice fill the void pretty well acting as a platform for peer recognition.A pay hike and a bonus every year seems to be a naive way to retain people. There needs to be a more comprehensive framework to retain employees that recognises the fact that “ people need a sense of identity, a sense of “groupness”, a sense of working with other people. We’re made that way. We’re hard-wired that way.“(Larry Prusak)

Good retention policies, as a side effect preserve existing pathways of trust and knowledge flows and in the process has a positive impact on the social capital of the company.

One of my earlier posts in related areas:(Has a link to the Nick Bontis causal model)
Knowledge Challenges-Aging Workforce

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