How to Manage Training Costs by Leveraging Implicit Knowledge

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 CFO asks CEO: “What happens if we invest in developing our people and they leave?”
CEO: “What happens if we don’t, and they stay?” 
~ Peter Baeklund, Leadership Coach


In a report from 2012 based on analysis of international databases of over 1,200 young high achievers, the Harvard Business Review revealed that dissatisfaction with development opportunities often accelerates early exits of bright young managers (and employees in general).

Most employers and managers don’t realize this, but the basic employee development programs aren’t enticing them enough to stay. And well-prepared people, able to deliver great results, are such a pity to lose.

Why is training frequently ignored in companies?

Training and development planning are some of the most important aspects of managing which are neglected in companies, according to Victor Lipman, longtime Fortune 500 executive, now author, coach and trainer. In his Forbes article, he emphasizes that proper training programs can shape the future direction of employees’ careers. Failing to acknowledge this makes companies eventually pay the price of losing top young talents.

Lipman identifies a few of the most common excuses that managers make, that he has even made himself. They focus on day-to-day operations, while ignoring the long-term activities and goals of their department. Bureaucracy and lack of time are also invoked as a reason why training is left behind, despite the fact that it just makes good business sense.

What are the costs of training and development planning?

A study from the Dale Carnegie Training Center reveals that employee turnover bears a hefty price tag, accounting for $11 billion yearly in financial losses for employers in the U.S. alone. And 40% of insufficiently trained employees leave their current employment within the first year, stating lack of training and dissatisfaction with their job as the reason for their changing employment.

These statistics prove an important point: the cost of hiring and retraining new employees significantly outweighs the expense of training current ones correctly in the first place. It also decreases turnover rates and increases efficiency, productivity, and employee engagement.

Even so, training does not come without challenges. Training programs build implicit (instead of explicit) knowledge – which makes it almost impossible to share or to capitalize on it across teams (or timeframes). Furthermore, training becomes valuable to a company when it is applied – and whenever this happens, the knowledge should be passed on.

How to leverage implicit knowledge

This is where a knowledge base effectively swoops in. We’ve talked before about the fact that managing knowledge properly is essential to a company’s competitiveness.

More and more often, knowledge is recognized as a valuable commodity embedded in products and services, as well as in the tacit knowledge of highly mobile employees. It is that more valuable since:

  • Using knowledge does not consume it.
  • Transferring knowledge does not result in losing it.
  • Knowledge is abundant, but the ability to use it is scarce.
  • A big part of an organization’s valuable knowledge (implicit knowledge included) walks out the door at the end of the day, as a report from MIT Press states.

We previously mentioned that implicit knowledge is not set out in a tangible form, but could be made explicit by creating a knowledge base. And there are many benefits to doing this, for individuals and organizations alike, and also for the community of practice:

How to build a knowledge base

Features. Companies should consider adopting a culture of content across multiple departments, so in order to put together a proper knowledge base, you need to invest in a couple of aspects. Infrastructure and Intranet are essential for hosting content, so employees can easily access them, but also focus and processes and roles, managing the people who create content and add it to the base.

Next, not all employees want to access the same content, so it’s essential to organize your knowledge base into categories, with the possibility of searching by keywords. Last but not least, mind external sharing (leverage existing collaboration tools) and feedback, since they encourage and allow the improvement of the information available in the base.

Content. The content included in a knowledge base should be cleanly structured, professionally developed and diverse.


To conclude, we could give an answer to Peter Baeklund’s anecdotic dialogue. Training employees becomes a perfect investment when it is followed by the building of a knowledge base. Whether the employees choose to leave or stay, the implicit knowledge remains within the company – and that is where the true investment lies.

Happy Knowledge Sharing!

Looking for a great way to ask questions and build knowledge with your co-workers? Quandora enables simple, efficient knowledge sharing with your team, way more fun than a mailing list or a forum. Try Quandora

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