Over the next decade, roughly one-third of the utility industry workforce will retire, and 105,000 new employees must be hired by 2030. A nimble talent management strategy can help utilities capitalize on emerging technical and business opportunities, while also helping them keep on top of industry disruption.
Indeed, the aging of the utility workforce is a major concern.
“Utilities rely heavily on the knowledge of their internal subject matter experts — people who have worked for the organization for many years, perhaps for their entire career,” said Jonida Regi, a utility workforce and talent expert for PA Consulting Group. “This has happened in other major industries, such as manufacturing and telecom. But compared to those industries, the aging-out effect is huge for utilities, both in scale and impact.”
This looming knowledge gap is expected to hit utility operations departments especially hard.
“There are employees who started in field work and moved up through the ranks in operations,” said Regi. “Their accumulated knowledge of the inner workings of highly complex systems and operations is irreplaceable — and most of them are retiring in the next 10 years.”
Furthermore, utilities now need access to new types of talent. For instance, today’s utility workforce tends to be heavy on O&M personnel, skilled craft construction and line workers. But there’s a growing industry need for technicians, energy-efficiency advisers, data analysts, customer operations specialists, cybersecurity professionals and more. This shift is driven both by external forces (such as the growth of distributed energy resources and changing customer expectations), and internal forces (such as the need to find new revenue streams).
To get there, utilities must strategically recruit new talent at a pace that matches their business evolution. The goal is to cost-effectively add new skills as they become relevant, and capturing desirable competencies in a competitive market.
The competition for talent is fierce, especially for recent graduates and professionals with a background in science, technology, engineering or mathematics.
STEM skills are in demand in several booming, high-paying industries, from software to biotechnology to logistics. Many non-utility organizations that are aggressively courting STEM graduates are also nimbler and more technology-focused than utilities tend to be. They can provide a work environment and support career paths that might look far more glamorous than working for a utility.
“The challenge is that so far, most utilities don’t have a clear talent management strategy,” said Regi. “Often, they lack a clear understanding of their existing internal capabilities, as well as which capabilities they’ll need in the future. They need to do internal strategic work to craft a talent strategy that aligns with their capability model.”
Developing a capability model is the critical starting point. This should be part of any long-term strategic business planning.
For instance, a utility might decide that in the next five years, 90 percent of customers should be able to self-service their needs via various channels.
What kinds of in-house capabilities will be needed to create and support these channels, to realize this goal?
How might that impact departments such as information technology, marketing and communications, customer service, billing and business systems?
Building upon this, a talent management strategy is needed to cultivate a workforce that matches the capability model. This strategy is a framework for identifying employee abilities and development needs.
According to Regi, many utilities aren’t yet clear on who their existing internal subject matter experts are, what they know, and the value of this knowledge and context. Also, given the way that utility employees progress typically from the front lines to managerial roles, often they aren’t given adequate tools and experience to develop needed managerial skills.
Therefore, a talent management strategy should provide paths for employees to rise through the organization in ways that help them to develop more of the needed capabilities. These opportunities also should align with employees’ interests and career goals. Programs pursuing this strategy can be considered staff retention activities.
Offering opportunities to gain experience in several departments across a utility, rather than climbing the career ladder solely within one internal silo, can make a utility career far more appealing to STEM talent. This approach also benefits the utility, by ensuring that staff who progress into management roles have the needed breadth of knowledge and skills — and also, that more knowledge is shared, rather than siloed.
A recent report by PA Consulting Group, The Nimble Utility: Creating the Next-Generation Workforce, explores ways that utilities can move toward more integrated business functions with cross-cutting jobs. Under this model, a new worker who begins in one department would be able to gain exposure to the rest of the business. Internal programs would help them acquire new skill sets and understand how, say, grid operations directly impact customer service.
Such programs may involve rotating employees through several departments. However, this can also be handled on a project basis.
“Some utilities identify key talent early and offer them the chance to manage a strategic project, like improving estimates of restoration time after an outage,” said Regi.
Regi noted that outage and restoration efforts affect almost everything a utility does. A manager must consider what customers need and expect from the utility, what information the utility needs to supply to customers, how the utility gathers and verifies that information, and how this communication will happen.
“Being responsible for all of these elements helps employees think more strategically — how to manage the workload, coordinate between departments and with different customer classes, etc. This can spell the difference between a manager who knows how to run the outage process in one region, and a manager who can deliver change throughout an organization,” said Regi.
“Being in charge of a project like this can help employees get a better grip on getting the right results. Utilities have been doing this to some degree, but generally on an ad hoc basis, not as part of a concerted effort to develop needed skills,” she said.
A nimble utility must keep updating its capability model and talent management strategy as it updates its business strategy. “If they don’t stay on top of this, they’ll be able to compete but won’t have the edge on utilities who are thinking about business objectives, capabilities, and talent management holistically and strategically
Thus, advertising the innovative, cross-functional and managerial opportunities a utility offers for career development might prove especially appealing to Millennials and Generation Z (individuals currently approaching their late teen years). Some utilities are thinking ahead. They have partnered with colleges and are investing in cutting-edge research and creating a network of potential recruits.
“This is a battle of hearts and minds: It’s Google and Facebook vs. the utility industry. Utilities have an advantage in that they are going through major transformations such as the way they provide services to customers, and this can provide more opportunities for well-rounded, creative, strategic, nimble careers,” said Regi.