Electric utility companies, which chiefly value stability, are facing an unstable future. Utilities are often stereotyped as change-averse by design for the sake of “keeping the lights on” (or the water flowing, or the natural gas pumping). However, fundamental changes to utility business models, operations, and workforces are occurring due to industry drivers including flat load growth, ageing infrastructure, and the ever increasing rate of capital investments to keep pace with technological changes. These factors make it more critical than ever for utilities to drive optimal performance from their existing workforces, while at the same time attracting the next generation of workers with the skills necessary to help them address these industry challenges and opportunities.
Two significant workforce challenges face the industry today; the rate of retirement among seasoned, knowledgeable workers, and the need to retain top talent and optimize performance of the next-generation workforce.
According the U.S. Census Bureau, more than 30 percent of the workforce in the utilities industry was within five years of retiring in 2015, and a large number of those soon-to-be-retirees are concentrated in management and other senior roles. This, combined with the long tenure (often decades) of retiring employees creates an urgent need to transfer institutional knowledge and expertise to the new generation of incoming workers.
One way the knowledge transfer challenge can be addressed is by instituting a phased retirement mentorship program. Organizations need to proactively identify employees nearing retirement and create programs for high performing, high-knowledge employees to slowly reduce their work hours into retirement to avoid a “here one day, gone the next” situation. Many retirees are interested in maintaining part-time schedules and salaries as they transition into a new phase of life, and next generation utilities workers can benefit from being shadowed and coached by industry experts. Programs can range from a few weeks to a full year.
Addressing the retirement cliff coincides with another talent challenge: creating an employee experience that engages and retains the newest generations of workers. A recent Gallup survey “How Millennial Workers Want to Work and Live” highlights the room for improvement when it comes to engaging the millennial workforce. According to the survey, “only 29% of millennials are engaged, meaning they are emotionally and behaviorally connected to their job and company.” Engaging Millennials (and the next generation: Centennials) requires having an articulated mission and purpose that demonstrates impact to a larger cause, providing development opportunities and coaching that fosters personal development, among other things.
The price of not engaging these workers is that they will leave for other opportunities. The Gallup study found that 60% of millennials say they are open to a different job opportunity; this is 15 percentage points higher than the percentage of non-millennial workers.
Intentional, small to mid-sized initiatives will be the way the utilities industry begins to turn towards the here and now of workforce change. How utilities companies meet the challenge of transferring that knowledge and creating attractive work environments for the next generation will shape both the organizational outcome as well as the state of the industry for years to come.
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This piece was co-authored by David Fisher and Jessica Singh. David is a Change Management Expert Practitioner in the Portland office. He has 9 years of experience in change management in the public sector, retail, utilities, and natural resources. David has worked in the U.S. Senate, lived in far-flung places like Alaska and Germany, earned a Master of Divinity degree, and chases three kids under five in his spare time. Jessica has 15 years of professional experience, including 12 in the energy industry. She has expertise in complex program management, strategic planning and execution, and communications.