Knowledge Workers

High-level workers who apply theoretical and analytical knowledge in product and service development

What are Knowledge Workers?

The term “knowledge worker” was first coined by Peter Drucker in his book, The Landmarks of Tomorrow (1959). Drucker defined knowledge workers as high-level workers who apply theoretical and analytical knowledge, acquired through formal training, to develop products and services. He noted that knowledge workers would be the most valuable assets of a 21st-century organization because of their high level of productivity and creativity.

They include professionals in information technology fields, such as programmers, web designers, system analysts, technical writers, and researchers. Knowledge workers are also comprised of pharmacists, public accountants, engineers, architects, lawyers, physicians, scientists, financial analysts, and design thinkers.


Knowledge Workers


Knowledge workers are said to think for a living, unlike manual laborers who are paid for performing physical tasks. They are differentiated from other workers by their ability to solve complex problems or to develop new products or services in their fields of expertise. Since the term was coined, the number of knowledge workers has continued to grow as organizations move toward a collaborative workplace that gives more autonomy to their employees.

Knowledge workers receive high salaries that reflect the complex nature of their work and their relative independence in relation to the work process. They focus more on quality than quantity, and their supervisors should assign them tasks based on their interests and goals, as this will influence the quality of the completed project.


History of Knowledge Workers

Before the adoption of the term “knowledge worker,” Upton Sinclair coined the phrase “white-collar worker” to refer to workers who performed administrative and clerical roles. These workers wore white-collared shirts that distinguished them from the blue-collar workers who performed manual tasks in the workplace.

Management writers such as Fritz Machlup and Peter Drucker first came up with the term “knowledge workers” in the late 1950s and early 1960s. During that time, the number of information workers began to outnumber the number of workers engaged in manual jobs.

Most people worked in traditional types of knowledge work professions such as those of teachers, ministers, and writers. The growth of industrialization introduced new types of workers who used information to make a living. These workers included investors, managers, and consultants.

In the late 1950s, Fritz Machlup used statistical information to examine work trends. In his research, he found that the share of manual workers in the labor force was decreasing, while the share of white-collar jobs was on the rise. He revealed that the number of knowledge workers was growing at a faster pace than that of manual jobs.

Machlup revised the meaning of the term “work” as a way of managing and using knowledge. According to the Organization for Economic Cooperation and Development (OECD), the number of information workers in the United States and Canada comprised around 40% of the working population in the early 1970s.

Peter Drucker wrote extensively about knowledge workers, and his work is considered an accurate prediction of the future position of knowledge workers in society. He described the way automation changed how knowledge-based positions evolved from manufacturing and agricultural jobs to more specialized occupations.

Drucker showed how the increased focus on science and technology led to the creation of new knowledge professions amidst a growing economy. He also predicted the demise of many blue-collar jobs.


Characteristics of Knowledge Workers

Knowledge workers possess the following characteristics:


1. Factual and Theoretical Knowledge

Knowledge workers undergo several years of formal training to master the information needed to perform certain specialized roles. At a minimum, most knowledge-based positions require a college degree and their learning process is continuous even after being hired.

For example, a pharmacist requires factual and theoretical knowledge of various medications before they can dispense medications and advise patients on the use of prescriptions and over-the-counter drugs. Also, a sales manager must possess knowledge of his/her customers’ preferences and factual information about the products sold by the company.


2. Accessing and Applying Information

Knowledge workers must know how to identify important information from a large database of information that they need to be familiar with. They should be in a position to weed out less important information and focus on essential information that will help them solve problems, answer questions, and generate ideas. Knowledge workers use analytical reasoning and relevant judgment to address customer service issues and new situations.

A common example in finance is using Excel as an application for financial modeling.


knowledge workers performing financial modeling in Excel


The above screenshot is from CFI’s financial modeling courses for financial analyst training.


3. Communication Skills

Knowledge work involves frequent communication between the knowledge worker and customers, co-workers, subordinates, and other stakeholders. They must be able to speak, read, and write, and hold discussions with workmates and deliver a presentation when needed.

Modern organizations emphasize quality customer service and continuous product improvements that bring knowledge workers closer to customers. Good communication skills enable knowledge workers to work closely with other workers in decision-making, goal setting, and brainstorming sessions.


4. Motivation

Knowledge work requires continuous growth, due to the need to keep up with technological developments. Workers must be interested in finding new information and applying it in their work. With new technologies being released every day, they must improve their skills to handle complex tasks and integrate the latest technologies into their work.


Challenges and Opportunities

The demand for employees who are qualified to perform specialized roles presents both challenges and opportunities. One of the challenges relates to the hiring and retention of knowledge workers. With a looming shortage of knowledge workers, employers are forced to look for more effective ways of hiring the best talents and retaining them for a long period of time.

Unlike baby boomers who stick to one organization for a long period, millennial workers, who are the majority of knowledge workers today, often serve in one organization for just a short period of time before moving to a more rewarding role in another organization. Employers are forced to offer higher salaries and an appealing work environment and to treat these employees more as co-workers rather than as subordinates.

The shift from blue-collar jobs to knowledge-based positions presents new opportunities for people aiming to grow their talents and expand their creativity. Knowledge workers enjoy greater job mobility, and they can work in different time zones, at home, in airport lounges, and in coffee shops.

Employers recognize them as assets of the company who possess unique talents and skills, rather than as ordinary employees who perform repetitious tasks. The nature of the knowledge work allows the workers to gain leadership skills since they often work as their own bosses and enjoy greater freedom to perform new tasks every day.


Related Readings

Thank you for reading CFI’s guide to knowledge workers. To further your financial education, the following CFI resources will be helpful:

0 search results for ‘