Retaining human capital: a case study in knowledge transfer - Cognis Performance Chemicals and the University of Portsmouth Business School

Cognis Group, a German speciality chemical company, is a typical ‘knowledge-intensive’ organisation, producing high-specification products in a technology driven market. Cognis Performance Chemicals UK Ltd (Cognis) employs 200+ people. The head office is at Hythe, Hampshire, which is also the location of main manufacturing site in the UK. Towards the end of 2004, Cognis faced the situation of an experienced manufacturing manager approaching retirement. This individual had a lifetime’s experience in his field, and had been with Cognis since the company had acquired the production facility on the South Coast of England in 2003. The core of the problem, identified by the Site Manager, was the potential loss of this individual’s tacit knowledge, much of which had not yet been captured by the organisation. It was recognised that this could lead to the creation of ‘knowledge gaps’ in the organisation, with serious cost and opportunity implications. The challenge was to find a way of transferring this knowledge before his planned retirement in 2006. Human Capital, knowledge and value: For an increasing number of organisations today, ‘intangible value’ associated with the knowledge, skills and experience of their employees, is a significant contribution to their worth and is a major contributor to their sustainability. These intangible qualities, which are embedded in people, are the essence of what is known as ‘Human Capital’, a term originated by the economist and American Nobel Laureate, W. Schultz in 1961. Human capital has gained prominence amongst academics and practitioners in recent years, as it has become recognized as a unique asset that differentiates organisations and is a source of competitive advantage. Many organisations, particularly those described as being ‘knowledge-intensive’ by Professor John Purcell at The Work and Employment Research Centre at Bath (CIPD, 2003) manage their human capital to create value-propositions for customers and other stakeholders. It is argued that the most valuable knowledge in organisations is ‘tacit’ knowledge, a form of personal or ‘experiential’ knowledge first described by Polanyi (1976.) This type of knowledge is attributed as being the source of creativity and problem-solving in individuals, and is the productive force that creates value in organisations. When experienced employees with extensive knowledge leave their employers, there can be serious implications. The considerable investment an organisation has made in its people, i.e. its human capital, can be lost, unless interventions are in place to prevent this. Cognis were faced with this problem as a senior employee was about to retire, and approached the University for assistance. This article summarises the approach taken and describes the methods used to transfer knowledge and retain human capital.