People-focused knowledge management

Chief Engineer and Company Management Do Not
Acknowledge Emerging Staffing Problems
Pierre Sonne, the human resource director for AeroCo, a
medium-sized aerospace company, was quite concerned. He had
discovered that more than half of the factory employees, includ-
ing supervisors and plant engineers, were eligible for retirement
within four years. Most of the remaining employees were quite
new and, in general, not highly experienced. In addition, some
specialty departments would be almost completely without
workers when the eligible staff retired. However, there were no
manufacturing department plans or budgets to hire replace-
ments, transfer expertise to younger workers, or start building
a new competent workforce by other means. Matters were made
worse by the manufacturing management who reported to the
chief engineer, who did not consider the situation to be worthy
of attention.
Pierre was aware of the general shortage of a competent
workforce in the general geographical area and the low supply
of new engineers and people with associates degrees that could
be expected from the regional colleges. He attempted to make
the company management aware of the seriousness of the situ-
ation. The president and the vice presidents of operations and
technology checked briefly with the chief engineer, Tom Jordan.
Tom told them — and they believed him — that he was certain
the situation would resolve itself. People would not all leave at
the same time, he said, and there were more pressing issues that
concerned the company.
The company’s competitiveness was based largely on the
factory’s expertise involved in building sophisticated products.
Hence, as personnel started to retire — 15 percent of the eligi-
ble group in the first year, 25 percent in the second year, 40
percent in the third year, and 20 percent in the fourth year —
the problems that Pierre had foreseen quickly became apparent.
Already in the first year it was difficult to find competent
replacements, and during the next three years the expertise level
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within the workforce was drastically reduced. As a result, the
company has experienced product quality problems and lost
considerable business; a new management team has now been
brought in to try to improve the situation.