Covid taking a toll on companies’ reservoir of workplace knowledge

Innovation suffering under remote working but not productivity, according to new study

Due to Covid pandemic, organisations are in danger of haemorrhaging knowledge without even being aware of it.

Due to Covid pandemic, organisations are in danger of haemorrhaging knowledge without even being aware of it.

 

Following the financial crash and the recession that followed it in 2008, HR professor Claire Gubbins from Dublin City University (DCU) did a piece of research with a group of Irish-based manufacturing multinationals looking at knowledge management within their organisations. On the face of it, these companies had coped well with the downturn and continued to operate effectively despite shedding jobs and restructuring.

However, when Gubbins dug deeper into the impact of the recession on their knowledge base, it was a different story.

“What I found was that the knowledge held by individuals who had been made redundant or relocated had been lost to their organisations, and was no longer easily accessible to those who remained.

“So, despite the prevalence of sophisticated knowledge management technologies, a knowledge gap was created in these organisations that affected their performance metrics,” Gubbins says.

Why this matters now is because Covid is doing something similar. And organisations are once again in danger of haemorrhaging knowledge without even being aware of it.

“We know that between 70 and 90 per cent of learning in the workplace occurs through what people experience on the job and informally,” Gubbins says. “This is because 90 per cent of the knowledge on which performance in real-world settings is based is tacit knowledge or knowledge that is not on paper or in manuals, but embedded in people’s heads.

“During the post Celtic Tiger recession, organisations lost vast amounts of this tacit knowledge and suffered noticeable consequences.”

Gubbins points out that there are close parallels between what happened then and what is happening now as Covid has forced many companies to make people redundant and a deep reservoir of knowledge has gone with them. Organisations have also been reconfigured with knock-on implications for where knowledge is held and how it is shared.

Remote working

But even more significantly it’s the big migration to remote working that’s really threatening the tacit knowledge base. In effect, it’s been like organisational restructuring on a huge scale. And history tells us that most organisations won’t even be aware of what they’ve lost until sometime in the future.  

“What they’re losing is the tacit knowledge that resides in individuals’ brains from years of experience, practice, training, education, observing and engaging with others. And because it’s held by the individual, it moves with them unless it’s shared,” Gubbins says.

“What’s happened with remote working is that people with valuable tacit knowledge are no longer co-located and there is no informal access to the traditional social interactions at work that enable sharing and thus learning. Tacit knowledge is central to organisational competitiveness. Without it they suffer.”

A recent study of 9,000 large European companies, commissioned by Microsoft and supervised by Prof Michael Parke of Wharton business school, found that while productivity at companies that had moved to remote working remained stable or increased during Covid, levels of innovation had fallen.

“These findings are not surprising because innovation is grounded in social interaction and a combination of tacit knowledge sharing and new learning,” Prof Gubbins says. “Technology cannot perfectly replicate the dynamics of being together in the same room, thrashing out ideas and feeding off the energy, ideas and knowledge of others.”

Gubbins adds that those who are tuned in to opportunities for informal learning at work tend to perform better than those who don’t by more than 30 per cent. This compares with a boost to performance of just 23 per cent with formal learning.

“The statistics show that formal training cannot replace that which is learnt informally and with increased remote working, social distancing in the workplace and fewer people in the office, the opportunities for these learning behaviours have been significantly reduced. Organisations need to be aware of this.

“Technology can do a lot, but we know from research that when humans have a choice they prefer to get their knowledge from and share their knowledge with another human being rather than through or with technology,” Gubbins says.

Productivity

The Wharton study also showed that corporate worries about people swinging the lead because they’re working from home have not materialised. In fact, being at home seems to have made no difference to productivity with people reaching the same levels or being even more productive.

Commenting on the results of the study, Prof Parke says the biggest worry about remote working is the drop in innovation but that managers can take a few steps to improve the situation.

He advises companies to increase their range of collaborative tools rather than just replying on one method or platform as people are different and may do better when they have a choice. He also says organisations need to train people to work remotely as it’s not an inherent skill. And thirdly, he advises establishing a regular routine for connecting with team members and sticking with it so people have a framework to work within.

Prof Gubbins says that organisations, and their HR and learning and development functions in particular, need to be mindful of potential Covid-related knowledge loss but also clued in to helping those with knowledge gaps (especially new recruits) who don’t have the usual social network channels to tap into to get it.

“We know from research that, while knowledge is a key source of competitive advantage for organisations, it is tacit knowledge specifically that delivers the greater benefits precisely because it is rare, unique and difficult to imitate or substitute,” she says.

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