There is a quiet crisis unfolding inside many organizations right now, and most leadership teams won't see it clearly until it's too late to address it gracefully.
Decades of institutional knowledge, every workaround, every exception, every undocumented decision built up over a career, is walking out the door in the form of retirement. Unlike a technology failure or a market disruption, this one arrives slowly, then all at once. Organizations that start now have time to get ahead of it. The ones that wait will spend years in recovery mode, wondering why their processes broke down and why newer employees seem to be reinventing the wheel.
Over the past decade, roughly 10,000 Baby Boomers turn 65 every day. The current wave is actually larger: 2025 was the peak year of what demographers call “Peak 65,” with a record 4.18 million Americans turning 65, more than 11,400 people per day, and elevated levels are expected through at least 2027.
It's tempting to assume older Americans are simply working longer to offset this. That was true for the two decades before 2020, but it hasn't held since. Labor force participation among workers 55 and older dropped sharply at the start of the pandemic and, unlike every other age group, has never fully recovered. Federal Reserve researchers tie much of that gap to a wave of retirements that arrived earlier than the long-run trend predicted. The experienced workforce isn't just aging; a meaningful share of it already left.
In one recent discovery session, a single data point stopped the room: the average age of employees actively working an organization's core business systems was 59, meaning the people who know how those systems really work, including every workaround never written down, are fewer than six years from retirement. That is not a future problem, it's a current one.
The single most important thing an organization can do in the near term is invest in current state documentation…before the people who know it are gone. Most organizations discover their documentation is missing, outdated, or too abstract to be useful. Effective documentation isn't a project management artifact; it's a knowledge preservation effort that requires getting close to the work as it's actually lived, not as it was designed, including the exceptions that happen three times a year and that only one person knows how to handle.
The most effective approach is structured process walkthroughs with the people who actually do the work, not those who supervise the work. This is also where the approach differs from generic “knowledge management” programs that have a mixed reputation: those often failed because they asked people to document knowledge in the abstract. Structured walkthroughs work because they start from the work itself.
Most knowledge transfer initiatives go wrong by treating the effort as a documentation project rather than a people project. Knowledge lives inside human beings, and capturing it requires genuine investment in them, not just their output. The most effective programs position tenured employees as architects of the solution, not just the source of the problem, they know exactly where the friction is and which workarounds exist because no one built the right tool.
Beyond documentation, organizations need ongoing knowledge-sharing: mentorship pairings, documented decision reviews, and regular retrospectives. Phased retirement, part-time consulting arrangements, and structured transition periods extend active knowledge transfer instead of compressing it into a rushed final few weeks.
Documentation and knowledge transfer are necessary but not sufficient. The deeper question is whether the organization is structured to be resilient as the workforce changes. Tenured employees have often been compensating for organizational and system limitations for years; when they leave, those compensating behaviors leave with them. A structured coverage assessment, identifying specifically where knowledge gaps are concentrated, is essential groundwork; without it, organizations spread limited resources too thin.
This is also a control risk, not just an operational one. When one person alone understands how an exception gets handled, that's frequently a segregation-of-duties gap or a single point of failure inside a SOX-relevant control. A coverage assessment that maps critical knowledge to specific people is, in practice, the same exercise as mapping key controls to the people who perform them.
The moment an organization is forced to examine what its people know is precisely the right moment to ask whether its systems are fit for purpose. In most cases, they are not, legacy systems have been kept alive because the people who know their workarounds are still in the building.
For many controllers and CFOs, this pressure isn't hypothetical. SAP has confirmed that mainstream maintenance for ECC 6.0 ends December 31, 2027, with extended maintenance available only through 2030 at roughly a 9 percent premium. Gartner's most recent figures show only about 39 percent of ECC customers have even licensed S/4HANA, meaning roughly 61 percent haven't started migrating, a process that typically takes 18 to 36 months. Extended maintenance and third-party support are legitimate ways to buy time on the system, but extending the runway on the system doesn't extend the runway on the people who know it. The same deadline is also tightening the talent market: demand for consultants who can bridge legacy ECC knowledge with S/4HANA has intensified, so waiting risks paying a premium for external knowledge to replace what's walking out the door for free.
The current state documentation effort is the prioritization map for modernization: the places where manual workarounds live are exactly where automation will have the highest return, and the tenured employees who know that terrain best are the most valuable input to future-state design.
Every year an organization defers this work, the documentation gap grows, the number of people carrying critical knowledge shrinks, and the systems get older. Then, sometimes gradually and sometimes suddenly, a key person leaves and the organization discovers a process it thought was running smoothly has actually been running on institutional memory that's no longer available.
The organizations that avoid that outcome are the ones that started the conversation early. The clock is ticking, the work is knowable, and the time to start is now. If you want to know where your organization's exposure is concentrated, the place to start is a structured coverage assessment…reach out to our Organizational Transformation team to begin the conversation.
Brian Boulger
Managing Director, Organizational Transformation