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Banks shouldn’t let knowledge walk out the door with Boomers

Sep 19, 2021
By: Danielle M. Heidemann

According to the Bureau of Labor and Statistics, in 2020, Baby Boomers represent approximately 22% of bank employees. In my experience helping bank clients, it is hard not to notice that much of the cultural and historical knowledge as well as the undocumented information and understanding of how the bank operates resides in the minds of this group. The tenure of long-standing employees elevates them to walking procedure manuals that are sought out to help with matters great and small.

Every bank seems to have their own versions of Sandy in Accounting, Lori in Operations, or Bill in Compliance celebrating 30-, 35- or even 40-year anniversaries.

We may not want to face this reality, but many of these individuals are thinking about retiring, possibly sooner than later. The United States Census estimates by 2030, all Baby Boomers will be age 65 or older, moving toward that magic retirement age at a rate of about 10,000 a day. In less than 10 years, community banks will lose this collective wisdom they have relied on for decades. 

In the very near future, your long term, well-seasoned banking experts will be replaced with a younger less experienced workforce. Most banks expect employees to stay only 3-5 years before moving on. Relying on cultural knowledge and informal processes and procedures will become difficult with the new workforce model.

As verbal and informal procedures pass through multiple employees, who may add or modify the process based on their understanding, the instructions we started with will have little resemblance to what we intended. This has consequences for customer satisfaction as well as risk.

Creating a strategy to capture, document and transfer unwritten knowledge from tenured employees to the next generation will be vital to ensure continuity, consistency and mitigate risk. The process of capturing knowledge to create documented procedures requires commitment and an investment in time and resources. Consider developing a strategy to:

  • Identify responsibilities for each role
  • Prioritize tasks starting with the most critical
  • Document procedures step by step
  • Test procedures
  • Cross train or rotate tasks

Working through the process of documenting procedures is also a valuable opportunity to evaluate the internal control environment and the efficiency and effectiveness of a process. Processes with a single owner, that have organically evolved overtime, in particular tend to be less efficient or lack appropriate controls. Taking a step back to look at what we have always done with new eyes can create cost savings or increase capacity by reducing the time and resources needed to complete a task.

Documenting processes and procedures and capturing bank knowledge doesn’t have to be a race against the clock if given a thoughtful approach. Starting the process of documenting procedures and transferring knowledge now, will build the foundation for a strong and consistent operating environment for the future.


Danielle M. Heidemann, CIA
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