The software industry has a generational turnover problem

You never know what you’ve got until it’s gone…especially when it’s an employee who holds all the niche knowledge needed to work the outdated technology that keeps your organization afloat.

The software industry has a big generational turnover problem on its hands, according to Billy Hollis, partner at Nashville, Tennessee-based consulting firm Next Version Systems. During a Nov. 19 panel at Live! 360 Tech Con in Orlando, Hollis said many executives don’t realize the importance of employees with institutional knowledge.

“You can hire and acquire other people in but, man, they’re going to make mistakes,” Hollis said. “There’s stuff that they don’t know, and if you have enough of that, you will make enough customers mad that it seriously risks your business.”

Greg Rivera, VP of product at CAST, recalled experiencing this dilemma firsthand when he worked at a global mailing-technology company. At the time, Rivera was tasked with writing mailing machine code and had to finish developing a half-built legacy mailing application after seasoned professionals left the business.

“The way I had to do that is try and meet people that maybe knew the person that had built it or work with them a little bit,” he said.

While a lot of time has passed since then, Rivera said companies are still grappling with the generational turnover problem—and that the problem has only gotten bigger.

“The amount of code that companies are managing today is 100 times bigger than just 10 years ago, and it’s all connected,” Rivera said, adding that the consequences of one person leaving an organization now is much larger than in prior years.

The people problem. It’s a huge generational turnover problem when employees who have invested a significant amount of time at their company retire, taking years of expertise with them.

“If they leave and somebody comes in, you don’t want them to be making mistakes for five years before they reach a level of competence because then that would endanger the business,” Hollis said, adding that the level of damage can be detrimental in some cases.

“I’ve seen companies degrade and die because they let four people get away without taking care of the expertise that [was] in their head[s],” Hollis said.

The other side of the coin. When companies rely on legacy technology requiring specialized knowledge to operate, there’s the potential for another type of generational turnover problem. Younger employees may feel like they are compromising their career if they devote time becoming an expert in outdated technology, Hollis said: “Their motivation to become an expert in that technology is lessened.”

The closer a piece of outdated technology to obsolescence, he added, the harder to find talent willing to work with it.

“What happens is typically every year, there are fewer people around in the tech industry as a whole that understand this aging technology,” Hollis said. “So, if you lose somebody, finding somebody to replace them is maybe impossible. Certainly it’s difficult and expensive.”

Fix-It Felix. Solutions for preserving institutional knowledge will vary between companies. Some employees may be willing to stick around past their retirement with the right incentives, Hollis said.

“They might like the extra money, and they may enjoy being around their colleagues,” Hollis said. “See if there are things that could help them do their job better.”

But that won’t be the case for every employee. Hollis said leadership teams can talk with employees who hold institutional knowledge to determine the risks if they leave, as well as the difficulty of another employee learning their job. Companies can also consider setting up apprenticeships with new talent.

“The first thing you ask is, ‘What are the major systems in business operations? What does my business depend upon and how do they connect to one another?’” Hollis said.