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The Graying Utility Workforce

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A few weeks ago, I wrote an article for LinkedIn called “Top 10 Utility Industry Trends”.  At that time, I was toying with including the concept of the graying of the utility workforce as a trend, but this issue certainly is not new; it has been a known concern for utilities for the last 15 years or more.  So, while it may not be considered a trend, it is still a major concern.

The average age of US utility workers is over 50, several years older than the national average.  This means that a large percentage of the utility workforce will retire in the coming years, and not enough skilled workers will exist to fill the gap.  Many utilities are already grappling with vast retirements.

No job classification is immune, as all types of positions are affected, from engineers, IT personnel, linemen, and field technicians.  And virtually every utility is impacted, including IOUs, cooperatives, and municipalities, although the issue may be most acute in smaller cooperatives that may already be operating lean, may only have a few dozen employees to begin with, and are in a region where it may be a challenge to attract talent.

Why is this a concern?  Not having enough workers with the right skills, for a profession largely dependent on OJT, could spell disaster and has the potential to impact utilities’ ability to operate the grid of the future.

In addition to lack of resources, a lack of highly-skilled resources is a concern.  With the move to smarter and more complex grids, utilities are requiring more and more technical skills in high demand in areas such as big data, AI, and cybersecurity. 

As I talk with utility professionals in my role leading a utility recruiting company, I wanted to share what I am hearing, as well as my own thoughts, to provide ideas that could prove beneficial for the industry.

So, what is a utility to do when it faces losing its experienced talent with fewer newcomers ready to step in?  Here are ten ideas to meet this challenge head on.

Shorten the Learning Curve

For skilled craft and field employees like lineman, several utility executives told me that it takes around 5 years to go from an apprentice to a journeyman lineman.  A utility executive told me “If we can put an 18-year-old kid in a fighter jet after 18 months of training we should be able to shorten the training and learning curve for utility field employees.”  One executive mentioned that the industry’s training methods may be outdated and ought to be looked at.  One management consulting company said that AR/VR simulations can be utilized to train the next generation of digital and electrical line workers.  This method has appeal to younger employees and also enables them to learn aspects of the job in a more rapid manner.  Along the same lines, another executive indicated that it can be a challenge to have a Boomer train a GenZ employee, and we need to figure out how to best train younger workers.

Expand Apprenticeship Programs and Partnerships

Apprenticeship programs are not new, as many utilities use this strategy for attracting field workers.  But is your apprenticeship program keeping up with the number of retirees?  These programs could be expanded to include outreach to middle and high schools (such as job fairs), military personnel, and 2 and 4 year colleges.  Working with colleges, even going so far as a tight partnership where new curricula is crafted solely for utility jobs of the future, should be considered. 

Baltimore Gas and Electric, an Exelon Company, established a partnership with a local non-profit to create a utility infrastructure job training program.  Several of BGE’s contractors and vendors are also involved to make this program a success.  The 8-week program has seen dozens of qualified workers eventually go on to work for BGE or its contractors.  The non-profit also provides a key element that it typically overlooked – they provide a life coach and mentor that helps people overcome hurdles or circumstances in life and prepares them to become a reliable and dependable employee.  Support is even provided for several months after the individual is hired.  BGE’s Steve Woerner, President & COO, stated the partnership has helped to meet the challenge of the graying workforce and has also made BGE’s workforce more reflective of the community it serves.

Focus on Retention and Invest in Reskilling

One should not focus on hiring alone to solve the industry’s graying workforce challenges, retention is also a key consideration.  BGE’s Woerner said, “You re-recruit your high performing employees every day”, meaning they ensure their leaders at all levels are providing clear expectations for all of their employees and then monitoring and coaching these employees.  Mr. Woerner said the company believes that employees tend to meet the expectations set for them, and that employees will do everything they can to meet or exceed those expectations, as long as those expectations are clear.

Utilities also need to explore ways to maximize the talent they already have at hand by focusing on reskilling existing utility workers where needed.  Establish career development plans and take a proactive role in mentoring, offering incentives to mentors and direct benefits to employees eager for new skills.

Accommodate Partial Retirees

Another strategy is to allow for phased-in retirement, which permits employees to work part-time and begin collecting partial retirement benefits.  Ensuring the success phased-in retirement programs requires that companies take a closer look at enabling ­flexible hours, acquiring equipment to lower physical job strain, redesigning jobs, and reducing requirements for mandatory overtime.  Allowing partial retirees to continue working provides tremendous benefits in allowing less experienced workers to shadow established veterans.

Similar ideas could be initiated for part-time workers such as stay-at-home parents that can dedicate a few hours a day to work.

Improve Your Image

A graduate with a degree in big data analytics probably isn’t thinking of working for a utility – they probably don’t realize those types of roles exist in a utility, and probably can’t see themselves in this type of environment.  As several utility executives mentioned, we have an image problem.  Many people view utilities as stable, but slow and possibly dull places to work.  Meanwhile, today’s younger generation of workers are more digitally oriented and not interested in mundane work or utilizing less-than-cutting-edge tools and technologies.

To remedy this, consider creative marketing campaigns to alter the utility perception across digital and traditional channels as well as through community outreach.  Utilities need to show they are dynamic and have challenging careers in an exciting and essential industry.

Of course, we need to also ensure we are investing in the latest tools and systems to attract top talent that wants to work on cutting edge technologies. As Rob Wilhite, Senior Managing Director at Black & Veatch Management Consulting indicated, “Utilities that are moving more rapidly toward digital transformation of their operations will win the battle in recruiting the next generation of talent”.  Mr. Wilhite cited one New England utility that is creating digital twins of all of their assets for assessing multiple scenarios to inform their operations and future investment strategies.  A key by-product of new technologies is they should result in greater operational efficiency with reduced headcount requirements.   

Furthermore, we need to invest in leaders that will move even farther away from the slow, bureaucratic ways of doing business.  As Charles Crews, founder of FPH Consulting Services, a management consulting and leadership advisory firm, stated, “Utility leaders of today and the future must be able to connect with their teams in new ways and become outstanding leaders of change and ambassadors of diversity and inclusion”.

Consider Alternate Compensation, Benefits and Work Environments

One large municipality stated they are looking to adapt their benefits to a younger workforce.  A more transient workforce and a younger generation of employees may not care for a pension or other benefits.  Instead they may want gym memberships, flexible work arrangements, and sabbaticals.  On the other hand, to accommodate graying workforce, utilities may also need to adopt more work from home arrangements or alter work schedules for partial retirees.

To compete with other industries, utilities may need to be more flexible on starting salaries, consider sign-on bonuses, or provide relocation support.  Let’s face it, for utility technical jobs, utilities are competing for talent with the likes of Google, Apple, and Microsoft, where sign-on bonuses are common practice.  Even industrial firms are offering signing bonuses for skilled trades (up to $25,000 signing bonus according to a 2018 Wall Street Journal article).  Some utilities are starting to offer sign-on bonuses for high-demand jobs such as System Operators.

For utilities that require certain jobs to be filled in an office, utilities should also upgrade their office spaces as a prudent investment in their workforce.  How many utilities have hip, bright, clean, and vibrant office environments geared toward a younger, yet multi-generational and diverse workforce?

Improve Succession Planning

Documented succession plans have become quite common over the past decade or so.  Yet, succession planning should not just be geared toward the leadership level.  What happens if a critical, lower-level employee leaves, either unexpectedly or through a planned retirement?  Utilities should put plans in place to ensure their knowledge transfers for every critical position (especially low-incumbency positions).  One Texas utility stated they are looking at critical knowledge bases residing in a small number of employees and documenting what rare knowledge they possess before they retire.

Most companies put effort in developing lists of “high-potential” employees to fill leadership pipelines, but there is much less effort put into effectively managing it.  Mr. Crews of FPH Consulting Services stated that metrics should be developed to gauge the effectiveness of succession plans, such as how many ready-now candidates were promoted, the quantity of external-hires, and the retention rate for key talent. 

Furthermore, succession plans should include actionable steps with deadlines that must be taken by the candidate and leader.  Otherwise, candidates could remain on these lists for years and years. 

Relatedly, in addition to traditional success planning, a large IOU plans for and determines the ideal organization design by looking at the needs of the future, then evaluating the workload and types of skills required, and comparing this data with their existing skillset to identify gaps.  They take action to fill those gaps in several ways.  They will check in with existing employees to see where they are in their retirement planning, guide high-performing employees to ensure they still engaged and growing, and start a talent pipeline to be ready for future vacancies.  This utility also performs scenario planning and what-if analyses to plan for outside factors that could adjust their baseline, such as if the economy accelerates to drive changes in retirements.

Utilize Outsourcing Arrangements

Utilities already are supplementing skilled craft with contract resources or 3rd party subcontractors, and this will need to continue.  Outsourcing operations and use of third-party consultants and subcontractors can help address workforce attrition. By outsourcing, utilities can partner with an experienced and flexible resource pool.  Third-party consultants can offer know-how beyond the expertise the utility already possesses, as well as provide guidance from other industries on best practices.  Utilizing third-party recruiting agencies can also help uncover talent that would have otherwise not have been found via utility HR teams.

Lobby Your Political Representatives

Collaborate with your political representatives to influence changes in immigration policies to expand the pool of young workers as well as workers with specific skills and talents.

Politicians might also be able to support the setup of regional programs so that utilities in a state work together- instead of competing against each other for the same scarce talent - and cooperate with statewide educational institutions to expand the pool of candidates.

Partner with Regulatory Agencies

Utilities should partner with their utility commissions for rate relief and other support mechanisms.  Some large IOUs are already working with their regulatory agencies for support in this area.

For example, most companies wait until a worker departs before hiring a replacement. Especially for craft workers, this creates an instant gap in knowledge transfer.  With an increase in budgets approved by their regulators, utilities could hire replacement workers several months ahead of expected retirements.


Conclusion
In five to ten years, what will your utility look like?  It will likely have fewer employees and will have lost much of the experience it relied upon to drive business forward. But meeting this challenge head-on, it will have gained a new culture that leverages the best of the legacy knowledge combined with newer ideas and technologies, fueled by a younger and more diverse workforce. Progressive utilities will have met the challenge by applying creative hiring and retention practices, modifying their work environment and compensation structures, investing in new technologies, and seeking out partnerships and alliances.

 

The author, Chris Testa, is a top recruiter focusing on the utility industry. He has an MBA and an engineering degree and has spent 30 years in the utility sector. He currently leads Testa Search Partners, a company headquartered in Atlanta and serving all 50 states. He can be reached at ctesta@testasearchpartners.com

Chris Testa's picture

Thank Chris for the Post!

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Discussions

Matt Chester's picture
Matt Chester on Aug 10, 2020 9:13 pm GMT

Great read, thanks Chris! What companies/industries do you think are the main competition that utilities are up against when it comes to attracting the top young talent with the right skillsets-- is it a battle vs. silicon valley? the tech start ups? established engineering legacies? 

Chris Testa's picture
Chris Testa on Aug 10, 2020 9:58 pm GMT

I think it depends on the job function.  For IT roles, utilities are competing with other companies that are in tech, for engineering roles, we are competing with engineering firms, etc.  That's always been the case, of course, but with the urgent need to hire due to mass retirements, and the diminishing quantity of the US workforce, this challenge is even greater now.  So the key is what do we do about this, once we've recognized we have a problem?  We have to recognize that we are competing against these other firms and have to significantly up our game.  If you are a recent grad and had your chance to work for a recognized leader in your field, and can work with the latest tools and technologies, in a hip office environment where you can regularly work from home, would you do that?  Most would say 'yes'. 

Matt Chester's picture
Matt Chester on Aug 11, 2020 10:47 am GMT

Thanks for the reply and insights, Chris. That definitely makes sense. I wonder also if there's something to the fact that so many utility companies that see employees retiring are ones where those employees spend many years, decades even, at the utility, whereas the new grades today seem more inclined to change jobs and employers with more frequency. Perhaps they see those competing job opportunities at non-utilities more conducive to such job hopping, where utilities have the reputation for sticking around for a longer time-- and that's not the type of 'commitment' they're thinking of for their career trajectory 

Rakesh  Sharma's picture
Rakesh Sharma on Aug 13, 2020 7:04 pm GMT

This is a great piece, Chris. I wrote about this same problem back in 2017. You can read it here. It is a knotty issue related to several factors. Do you think the industry needs to overhaul its processes and benefits package to make itself attractive to potential employees? 

I ask because there are no free lunches, massages, or opportunities to make a difference (and stand out among your peers) at utilities. The industry also does not promise riches (as compared to tech or finance) or the promise of "disruption" because utilities are so tightly regulated. 

Chris Testa's picture
Chris Testa on Aug 14, 2020 5:34 pm GMT

Rakesh, yes I think that is one of the things that should be done, and should be a rather easy quick win for utilities.  I also agree with your sentiment that this not a new issue, I remember when I was with a utility we studied the issue in 2006-07 and tried to come up with some solutions then.

Maninder Sahota's picture
Maninder Sahota on Aug 17, 2020 4:14 pm GMT

Great article Chris! Exhaustive list that utilities need to start looking at in order to resolve talent hiring and retaining practices. There has been a visible shift in the way some of the IOU’s have started managing their media campaigns around clean energy initiatives and their branding to attract young talent and that speaks to the moral and ethical values of younger generations.

Current situation with the COVID has helped accelerate utilities digital adoption rate in some areas, introducing a sudden cultural change within the utilities. I am hoping they can maintain this progress and keep this mindset in the post COVID world as well to set them up for future success!

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