Description
Fact: The utility industry's workforce is aging, and according to industry analysts at Ovum, it's a growing concern to utilities worldwide. The concern - and risk - is "brain drain," and utilities are witnessing it at an increasing pace as long tenured employees begin to retire. These are people who've amassed years of experience and who have a deep-seated understanding of the industry, and their departure is leaving a void of knowledge.
The Aging Utility Workforce
Business Impacts, Technologies, and Material Strategies
to Address the Challenges
Kim Gaddy
Senior Analyst
Utility Analytics Institute
Mechele Herres
Solutions Marketing Manager, Utilities
Interactive Intelligence, Inc.
© 2013 Interactive Intelligence, Inc. 2 The Aging Utility Workforce
Contents
Introduction ........................................................................................................................ 3
No urgency to replenish the labor force ............................................................................. 4
New technologies are the bigger hurdle ............................................................................ 4
Utilities must manage corporate knowledge better .......................................................... 4
Difficult questions are forthcoming… and soon ................................................................. 5
Q&A with the Experts ......................................................................................................... 6
1. What are the major impacts of an aging workforce? ............................................... 6
2. Do existing human resource policies need to change?............................................. 7
3. How can technology help bridge the gap? ............................................................... 9
4. Is your organization experiencing a rapidly changing workforce first-hand? ......... 10
5. What are the business process implications? ......................................................... 10
6. What obstacles have you encountered? ................................................................ 11
7. What are your immediate and long-term plans to address the loss of
critical players? ....................................................................................................... 12
8. What approaches can utilities adopt to appeal to the next generation
of workers? ............................................................................................................. 13
9. What best practices advice would you share?........................................................ 14
The Authors ....................................................................................................................... 15
Our Panel of Contributors ................................................................................................. 15
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© 2013 Interactive Intelligence, Inc. 3 The Aging Utility Workforce
Introduction
Fact: The utility industry’s workforce is aging, and according to industry analysts at
Ovum, it’s a growing concern to utilities worldwide.
1
The concern — and risk — is
“brain drain,” and utilities are witnessing it at an increasing pace as long tenured
employees begin to retire. These are people who’ve amassed years of experience and
who have a deep-seated understanding of the industry, and their departure is leaving a
void of knowledge.
Compounding the issue is that the utility industry in general has failed to recruit new
talent to replace this aging pool of expertise. Over the last 20 years in particular, utility
companies in the US have failed to look ahead and now employ a much higher
percentage of workers aged 45-64 than all other US industries combined (Figure 1). Look
ahead 10 years, and workers in this age group will be exiting the workforce with very
few experienced employees to step in and replace them.
Figure 1. More than half of the US utilities workforce are aged 45 or older (source: BLS Population Survey
2010, Ovum report #OI00139-044)
A similar situation has emerged in utility sectors globally. In findings comparing the
European utilities industry to all others in that part of the world (Figure 2), for example,
nearly 30 percent of the utilities workforce is between the ages of 50 and 59. Of this
group, 32 percent will retire in the next 10-15 years. While workers in this age range are
currently leading the global utilities industry knowledge brigade, they’re also set to
contribute most heavily to the brain drain problem.
1
2013 Trends to Watch: Utilities Technology (IT002000242), Ovum, Oct 2012
© 2013 Interactive Intelligence, Inc. 4 The Aging Utility Workforce
Figure 2. Age range of the utilities workforce in Europe compared with industries overall (source: Eurostat
Labour Force Survey 2010, Ovum report #OI00139-044)
No urgency to replenish the labor force
There are a number of reasons why utilities companies have failed to replenish their
labor force with younger workers, both in the US and worldwide. But a leading cause is
the common industry practice of “jobs for life,” in which specialized, nontransferable
skills in engineering have led to lengthy employee tenure and low staff attrition.
Succession planning therefore has remained a minimal priority for most utility
companies, and any planning for recruiting, onboarding, and training new employees
has largely been inadequate.
New technologies are the bigger hurdle
At the same time, the utilities industry has been slower than other sectors to adapt new
technologies like mobile communications and business process automation to make
operations more efficient. This trend is changing as some utility organizations are finally
turning to these kinds of tools, although older generation workers generally remain
hesitant to warm up to them. Of course, not all employees of an older generation are
averse to new technologies. Some workers in this age group have adapted quite well to
new electronic and mobile technologies, and use them to their advantage every day. But
more often, older employees find technology to be intimidating when they aren’t
familiar with it. Beyond email and the telephone on their desk, these employees are less
inclined to learn about and use technologies like smart metering or a content
management system because they view them as being complex.
Utilities must manage corporate knowledge better
Ovum’s 2013 report on utilities trends and technology points out that while the
industry’s aging workforce has “disparate effects on utilities,” the issue also impacts
technology companies that cater to the industry. Most important for these vendors,
Ovum says, is understanding the requirement utilities organizations have to improve
how they manage corporate knowledge. This requirement has set the stage for
© 2013 Interactive Intelligence, Inc. 5 The Aging Utility Workforce
technologies like business process automation (BPA), content management and other
similar solutions within the utilities sector. Moreover, BPA and knowledge management
can help utilities mitigate the effects of retiring workers, in that technology provides the
bridge to managing knowledge moving forward. In fact, utilities organizations that have
implemented BPA and knowledge and content management systems, and that are
capturing information and knowledge more effectively by using solutions such as
workforce management (WFM) systems, are finding technology to be an effective and
sustainable alternative for halting brain drain.
Yet as Ovum also warns, with thousands of experienced employees still expected to
leave the industry over the next decade, implementing knowledge management
technology alone may not suffice. It is urgent, then, that utilities organizations automate
the business processes most at risk from employee retirements, a risk that’s most
prominent on the operations side of the business.
Difficult questions are forthcoming… and soon
The average age of workers in the utilities industry has been trending upwards for the
past two decades, and while economic conditions have delayed their retirement plans,
the day is coming that many knowledgeable, specialized employees will finally walk
away. As an industry, are we prepared?
Utilities organizations worldwide must address several key issues soon, and do so in an
expedient manner. Tops among them:
? Steps to take to avoid the loss of valuable institutional memory
? Effectively backfilling critical positions, those with the highest retirement rates
? The industry itself attracting and retaining a new generation of workers
? Improving internal collaboration among disparate business units, and within the
utility culture
Finding solutions to these and similar issues will demand a comprehensive approach.
Some solutions will come in the form of innovative new human resources policies. Other
solutions may stem from best practices adopted by other industries dealing with similar
concerns. But ironically, many solutions for reversing the aging employee trend could
circle back to technology. Consider, for instance, that new knowledge and document
management systems can help protect against brain drain, with business process
automation playing a major role. Utilities are beginning to use data and process
automation tools to trigger, prioritize, and route tasks and to drive needed
communications to employees and customers. Business process automation: 1)
simplifies the human technology interface for those less comfortable with newer
technologies, 2) reduces the risk of errors or delays and guides new employees lacking
in experience to take the correct actions in a timely fashion, and 3) increases overall
operational efficiency, minimizing the number of employees that will need to be
replaced. To these distinct extents, process automation tools offer solutions to many
facets of the aging workforce challenge.
© 2013 Interactive Intelligence, Inc. 6 The Aging Utility Workforce
Q&A with the Experts
Offering their perspectives on the aging utility workforce are utility industry human
resources professionals, Angelique Keavney of Idaho Power and Dawn Miller of
Sacramento Municipal Utility District. Also on our panel are Joel Gallagher, a contact
center manager at Citizens Energy Group and Roberta J. Fox, chairman and Chief
Innovation Officer of FOX GROUP Technology. Here are the panel’s responses to
industry issues now considered to be most pressing.
1. What are the major impacts of an aging workforce? What aspects are
you most concerned about?
Keavney: The impacts I envision can be divided into three categories:
1) Replacing the knowledge. We anticipate a significant exodus over the next
five years. Nearly half of our workforce will be retirement eligible by 2018.
Beyond backfilling vacancies, these employees have 30-40 years of
knowledge that we need to capture.
2) Turnover. If we were to lose 40-50 percent of our workforce, the cost to
hire and train new employees would be substantial.
3) The ability of employees to perform physical work as they age. Many
positions are physically demanding. We’re experiencing an increase in
injuries and health costs.
Miller: My biggest concern is losing scarce knowledge. We have a lot of legacy
equipment and plants and rely heavily on homegrown knowledge. While I’m
confident that we can keep up with new technology and grow new skills, running
the business still requires legacy system expertise. I’m also concerned about the
loss of specialized skills that may reside only in one or two people.
Gallagher: Early retirements are my major concern. We’re losing many senior
subject matter experts who understand the business. The aging workforce doesn’t
deal well with change, changes to technology or with technology in general. These
employees tend to make a rather quick exit largely because they are unable to
cope with change and the stress level. We often don’t get the chance to convince
them to stay or offer more training. They decide to quit or retire and seven days
later they’re gone.
Fox: The utility sector is a highly educated, high-knowledge-required sector. Some
of the major impacts that I see include:
1) A shortage of people resources with the required education and
experience
2) A shortage of sector knowledge tied to processes and procedures, and
3) Public safety risks related to poor business process documentation
practices.
© 2013 Interactive Intelligence, Inc. 7 The Aging Utility Workforce
Utilities have an expensive and skilled workforce and that is true even for junior
roles. Most utilities have a high percentage of engineers, project managers, and
licensed trades. I was a field engineer in my younger days and had to obtain safety
and knowledge certifications annually. It takes time and money to build and
maintain that expertise. The job only gets harder as experienced employees exit,
and I understand the challenges. The youngest employee at FOX GROUP is 42, and
the oldest has been working for 45 years. It takes 10-15 years to develop the
knowledge required. It takes 1,000 hours to train someone with 20 years of telecom
experience to become a consultant.
2. Do existing human resource policies need to change to address the
realities of an aging workforce and if so how (for example,
teleworkers, flex time, part time)?
Keavney: To retain our aging workforce, we need to be more flexible. We’re
receiving more requests for leave of absences and changes in the type of work
performed though we haven’t yet received many requests for job share or part-time
opportunities. We are viewing how we can develop career paths for aging
employees in physically demanding jobs. We’ve considered flex time and
telecommuting and found that our company is not built for teleworkers. Our jobs
require collaboration, and it’s important for employees to be at work for meetings,
to work on projects, and to be here for our customers. Plus, some aging employees
struggle with the technology required for teleworking, so it hasn’t been as
successful as we hoped.
To attract and retain a new generation, we’re evaluating which policies may make
us less attractive. Millennials value flexibility, don’t want 10-hour work days, want
the opportunity to telecommute and want a collaborative work environment. We’re
implementing the new technologies that Millennials believe necessary to perform
their work. A good work-life balance is incredibly important to them so we’re asking,
are we too rigid in our core working hours to attract and retain the best-qualified
candidates?
What new hires expect is different from what existing employees want, even in
benefits packages. We’re working hard to maintain our status as an employer of
choice for both groups.
Miller: We have a good policy structure in place to start from. Part-time
opportunities and job rotation exist in some places across our business. Flex time is
role-specific (for example, employees in our power system operations work
different shifts given the 24/7 operation). Our call center has a contingent of remote
workers equipped to work from home in the event of an emergency. I see these
types of things continuing and extending as appropriate. Not every job lends itself to
any or all of these choices.
© 2013 Interactive Intelligence, Inc. 8 The Aging Utility Workforce
The new generation is radically different. They want to work for something they
believe in and expect a say in their career destiny. Electric utilities have not had to
address these issues before, and some are not equipped to deal with these new
expectations. We’re no longer hiring people who want to get into a job that is
secure for the next 30 years so we will need to adapt and make strategic policy
changes to attract these workers.
Gallagher: We offer flex time and are looking at telecommuting and other options
for our younger folks and the general population. Members of our aging workforce
are more apt to say that these types of changes are “just too much for me.” The
major issue for our aging workforce and for us is training. Stress management
training, training on how to deal with change and longer training periods when
technology changes or when we expose them to something new. It’s really on us to
embrace them and help them embrace the change. We need to get ahead of the
curve from a training standpoint versus dealing with it after the fact.
Fox: Utilities seem to be more rigid in sticking with traditional employment
practices. My observation is that some utilities have not kept current and still rely
on management and employment policies more characteristic of the 1950s, perhaps
up to 1970s.
The telecommunications sector is starting to bring back engineers who’ve retired to
work part time. Some may assume that a $100,000 engineer will expect a $100,000
per hour equivalent though that’s not necessarily the case. They may come back at
much lower rate because that’s better and more fun than working part-time
someplace for minimum wage. Utilities need to ask the question, why can’t they do
the same?
I’m a former director of the Canadian Telework Association and have been a
teleworker for almost 30 years. That’s one reason FOX GROUP is run as a telework-
enabled virtual firm. It’s been interesting to develop the required processes,
policies, and procedures. It has been an evolutionary process to develop the
structure to support the fact that an employee may work 10 months of the year and
then be gone for two months as a snowbird. The only way FOX GROUP has been
able to attract its exceptional staff is because we offer part-time, flex-time, and
telework opportunities.
Industries, like financial services, have adopted more progressive policies. From my
vantage point, the utility industry is probably lagging the farthest behind. Our
experience has been that when you encourage telework, part time, flex time or
letting retirees come back in contract roles some utilities say, “We can’t do it; the
unions won’t let us.” We work with the government and education sectors that are
just as unionized and yet seem to be able to change. Other unionized sectors have
adopted more flexible work policies, so why not utilities?
© 2013 Interactive Intelligence, Inc. 9 The Aging Utility Workforce
3. How can technology help bridge the gap? Do you see business
process automation, content management and knowledge
management helping in particular?
Keavney: We’re beginning to use technology to automate processes, potentially
reducing staffing needs. To change an employee’s address or withholdings was once
a manual, paper-based process. Employees now make these changes online. Ten
years ago, linemen worked off of paper orders. Today, everything is tracked in a
mobile workforce system that identifies the location of an outage or a meter
change-out. Whenever a lineman leaves a job, they enter notes about how that job
was handled and who performed what work. The next lineman picking up that work
has access to that information. We’ve also implemented a tool that provides
employees access to best practices documentation. Automation has come to
workforce planning and we can forecast when an employee is likely to retire.
Customers are also seeing the benefits as most transactions can now be
accomplished online.
Miller: As employees retire or change jobs, we conduct in-depth interviews and use
technology to capture that legacy information. Our learning development group is
moving to “just-in-time” learning with the goal of delivering information when and
where needed via the web, smartphones, or even YouTube videos. We are
extending the use of the mobile data terminals in our trucks to enable field
resources to access learning modules and content as needed.
Gallagher: Technology can definitely help. For example, we have a site that our
associates use to look for the information that they need to do their jobs. This
system was sufficient when we were just a gas utility. With the addition of a water
and wastewater utility, we’ve recognized that the system is not returning the
specific data they seek. We’re moving to a new platform that will enable them to
locate the data they need in an instantaneous fashion. We hope to relieve some of
the stress and frustration they feel when a customer is on the phone and they are
unable to find the wanted information. We also constantly ask them to watch their
call time, so streamlining customer interactions by putting needed information at
their fingertips will make a world of difference.
Fox: Technology solutions can help bridge the gap. Laptops, high-speed Internet,
tablets and smartphones are everywhere. Portable technology, web-based
applications, and the ability to have remote knowledge workers as part of a
managed and measured job role is a game-changer. The business models of some
companies like the FOX GROUP and some industries like the airlines are founded on
a distributed and mobile workforce. Everyone from engineers to customer service
representatives can work from home, securely log on and access the systems they
need to do their jobs. Business process automation, content management,
knowledge management, and other technology solutions make it possible to extend
the careers of current employees and attract and enable the effectiveness of new
employees.
© 2013 Interactive Intelligence, Inc. 10 The Aging Utility Workforce
4. Is your organization experiencing a rapidly changing workforce
first-hand? In what area of your company do you foresee the most
impact?
Keavney: Yes, our workforce is changing overnight. Because of the retirement-based
exodus, our culture has changed dramatically. We’ve hired one quarter of our
workforce in the last five years. It’s incredibly difficult to replace an experienced
engineer. Our cross-training program requires engineering leaders to work in
another area for up to a year – a planning engineer may go work in transmission or
construction. Entry-level engineers must do at least three cross trainings in other
areas — on a line or stations crew, in accounting, planning, and so on to progress in
their careers.
The goal is to ensure that we have broad-based entry-level engineers with a holistic
view of the enterprise to replace the experienced engineers that we lose.
Miller: The economy has stymied the significant departure I expected, but it will
pick up. About half of our employees will be retirement eligible in the next three
years. Some levels and groups are impacted more than others. One group we’re
watching is our IT group as the technology portfolio is changing radically and
employees supporting our legacy systems are retiring.
Another population meriting close attention is our Power Supply and Grid
Operations group. Workers are being courted to move between our utility and
surrounding utilities and organizations like the California ISO and Western Area
Power Administration. There’s limited expertise and much demand for that
expertise.
Gallagher: Yes, and we’ve got two different age groups in our workforce today. We
have the aging workforce, and the younger workforce. We are struggling with how
we as managers merge these two groups to create a team that is going to be
successful. These two groups have grown up in two different eras. We have some
younger employees coming in with piercings and tattoos, and that may be off-
putting to some of our long-standing employees. How do we get to a happy
medium?
5. What are the business process implications and how will business
processes need to change?
Keavney: New technology is driving process changes. Implementing new processes
hasn’t been as challenging as gaining buy-in from our existing workforce on using
and becoming proficient with the new tools. We are spending more time training
aging employees. For example, newer customer service representatives are easily
adapting to our new Customer Information System (CIS) while more experienced
employees have struggled some.
© 2013 Interactive Intelligence, Inc. 11 The Aging Utility Workforce
When a longtime employee leaves, we document critical processes so that someone
else can pick up and proficiently perform the work. We are also attempting to
capture “water-cooler knowledge.” Long-term substation technicians know which
boxes at which substations require a key and which have a keypad. New station
technicians need that information. Almost every department now has a process
documentation goal.
Miller: We’re using more bucket trucks to reduce climbing given safety concerns.
Also motivated by safety, we decided to contract out vegetation management.
We’re looking to streamline business processes, and we look for the outcomes to
help us address aging workforce challenges and adapt to new technology.
Gallagher: For those employees who struggle with technology change, the simpler
we can make things and the more training we can provide the better. We have a
training scheduled today, and we’ve done much training over the last two years.
Even so, perhaps we should have provided longer training periods for some of our
folks, especially for those persons who left the business. Had we done it differently
and provided one month of training instead of two weeks or provided more hands-on
and side-by-side training, the outcome might have been different. We have lost many
good people over the last two years due to change and the stress that it has created.
6. What obstacles have you encountered while trying to deal with
aging workforce challenges (financial, regulatory, union, and so on)?
Keavney: Cost is the major issue. If I knew that someone in a critical position was
retiring, I would replace that person six months early to enable cross training.
However, there’s tremendous pressure from regulators to reduce costs. Our
customers are struggling, and we are watching every penny. It’s an incredible
balancing act as we attempt to replace critical resources. We must be careful to
avoid any perception that we spend excessively on rich benefit or employee
compensation programs. Simultaneously, we need to be an attractive employer,
and we’ve got to keep on the lights.
The other thing is uncertainty. We don’t know when employees will actually
leave. The struggling economy has affected employees’ decisions. We anticipate
that the exodus might happen all at once as the economy recovers.
Miller: The bad economy and lower-than-projected turnover have slowed
progress. I’ve been here almost 10 years and remember projecting that half of
the workforce would be gone in five years, and they’re largely still here. We only
have single-digit turnover, though this rate should increase as the economy
improves. This will enable us to try even more new things from a process
perspective. We may find it easier to hire and train new employees than
retraining existing employees to adopt new technologies at their careers’ end.
© 2013 Interactive Intelligence, Inc. 12 The Aging Utility Workforce
We recently negotiated new contracts with our two unions, and everyone seems
satisfied with the set of work rules adopted as they don’t appear to inhibit any of
the changes that we need to make. We have great relationships focused on
mutual success.
Gallagher: Primarily, it is getting the business support and the funding we need
to provide the training and the tools that our folks require to be successful.
7. What are your immediate and long-term plans to address the loss of
critical players?
Keavney: Immediate: Every day my team looks for opportunities to fill our pipeline
with the most qualified candidates. It’s a timing issue as jobs aren’t always readily
available. We spend time in K -12 programs and meet with students as early as sixth
grade to discuss energy careers. As a community partner, we see it as our job to
encourage students to take science, technology, engineering, and math (STEM)
classes and to pursue technical trade or four-year degree programs.
We also have a strong paid internship program. Many students view the utility
industry as dangerous, dirty, and dull. We want students to understand that
technology changes are making this an exciting and fast-paced industry. Maybe
these interns will choose to work for us and maybe they won’t. Our hope is that
they’ll tell their friends how great our company is and how terrific the industry can
be. We also have a cross-training program to introduce our bright, career-minded
employees to jobs across our company.
Long-term: We’re putting processes in place to ensure that leaders are thoughtful
about whether to backfill and with what skill set each time someone leaves. Utilities
face a huge skills gap in the next 5-10 years. If we don’t do a good job building our
pipeline, it will be difficult to keep on the lights. We need to ensure that: 1) we’re an
attractive employer of choice 2) qualified graduates are ready to join us, and 3)
current employees have the skills to fill critical and leadership vacancies as they
occur. All three of these things are absolutely imperative.
Miller: Immediate: An individual on my staff is dedicated to pipeline development
and coordinates efforts across the organization. This person works with the
educational community (high schools, trade schools, and colleges) to influence the
curriculum and develop the needed skills. The lack of STEM education creates a
pipeline gap for us. We want to cultivate relationships with facilities and students
and change the perception that working for a utility means climbing a pole.
Long-term: Our goal is to expand successful programs implemented to even more
districts across our service territory. We are also evaluating our practices for
replacing critical players. Fortunately, we hired skilled employees when the supply
was more plentiful. Going forward, I see growing needs and fewer candidates. The
scarcity of power engineers is concerning. The demand from California utilities and
related entities is forecast at four to five times the number of graduates in California
each year. So, I want to work on us being more comfortable hiring those new
graduates and building their skills internally rather than hiring them ready-baked.
© 2013 Interactive Intelligence, Inc. 13 The Aging Utility Workforce
Another focus is finding people who naturally gravitate to fields that require
flexibility, appropriate risk taking, and adaptability to constant change. Many
engineering graduates are comfortable with the black and white and less so with the
now constant shifts in our industry.
Gallagher: Immediate: We are constantly recruiting for new faces. We don’t have
trouble finding candidates partly because of Citizens Energy Group’s reputation in
the community, though it is hard to identify those persons who are truly interested
in a contact center role versus just a path into the organization. I need someone
who is passionate about customer service and technically savvy. We seek individuals
with a broad skill set who want to help our low-income, senior citizen, and
environmentally conscious customers.
Citizens’ core values are important to us, and we stress them to new employees. It’s
not just a matter of finding a qualified candidate. We ask specific questions in the
recruiting process to identify specific individuals who meet our core values. We do
multiple phone screens and phone interviews. We rely on agencies to conduct
behavioral interviews and have found those interviews to be most beneficial. Once
we find a good candidate, it’s my goal for that candidate to become a long-term
contact center employee. We devote as much training as needed to get new
employees where they need to be. In the short term, the focus will be on providing
new hires with the training and tools they need.
Long-term: Our entire business needs to embrace the culture change. Baby
boomers are nearing retirement. If we want to retain and keep our subject matter
experts engaged, our entire company needs to be thinking about how to make that
happen — whether that is more training, giving individuals special opportunities,
and so forth.
8. What approaches can utilities adopt to appeal to the next generation
of workers?
Fox: There’s a misperception that the only jobs are being a lineman or working in a
nuclear plant. There are all kinds of funky and cool utility jobs. The industry needs to
do a better job of education. There are a wide variety of roles, and the vast majority
of them do not involve dealing with high voltage or climbing a pole even though that
may be the perception of many.
Millennials are all about flexibility: location-flexibility, hours-flexibility, and job
flexibility. They are intrigued by the chance to use cool, next-generation
technologies. The best thought leadership folks in my company came after me. We
work remotely and offer flexible employment options. We provide a test lab and
video capabilities and give employees the opportunity to play with the latest tools.
© 2013 Interactive Intelligence, Inc. 14 The Aging Utility Workforce
9. What best practices advice would you share?
Fox: Utilities should consider:
? Job shadowing, offering new hires the chance to work with an experienced
employee. This type of mentoring would appeal to many younger
employees.
? Cross-training and job rotation, at one time a standard practice in the
telecom industry.
? Job reassignment, to speak to the flexibility expectations and short
attention spans and desire for job changes every year or so that
characterize Millennials and to address the needs of aging workers. For
example, my brother-in-law was a hydro lineman and installed large ducts
and vents in a nuclear factory. As his job became more difficult with age, he
pursued, secured, and excelled in a purchasing and procurement role.
? Every opportunity to leverage technology, to capture the invaluable
institutional memory and experience residing in the aging workforce,
automate business processes and support the training of both new and
aging employees.
Knowledge must be transferred to the next generation of workers. Another part of
the equation is that many critical processes and procedures haven’t been
documented. While it will require investment to resolve this issue, it is essential to
ensure that the knowledge is not lost forever.
Management needs to work with unions and sell alternative work styles. I asked my
brother-in-law, a former union steward, whether he would have considered going
back to work after his retirement. He said, “Absolutely, in a heartbeat, as long as I
could sit behind my computer and work half days or maybe 8-10 months a year.”
And he’s confident that he could have sold the idea to fellow union members; but,
no one ever asked. In his purchasing role, he was responsible for specialized steam
fitter and HVAC components. The utility ran into problems after his departure.
Errors were discovered, and he was asked to return for a couple of weeks to correct
the mistakes. Those mistakes and associated downstream impacts resulted in
negative financial repercussions for the utility. If the utility’s employment practices
had been more flexible, those errors could have been avoided, and his 30 years of
experience could have been retained.
Don’t benchmark against other utilities; instead, look to other sectors requiring
specialized knowledge like telecom or finance. You may be surprised and uncover
something unexpected that will pay significant dividends. Learn how JetBlue has
built a flexible and adaptable workforce and has achieved the lowest cost of
distribution and the highest customer and employee satisfaction in the airline
industry. They have used all kinds of tools, applications, and technologies to achieve
their success. To find innovative new ideas, look to other industries that share
similar characteristics and face similar challenges.
© 2013 Interactive Intelligence, Inc. 15 The Aging Utility Workforce
The Authors
Kim Gaddy is an analyst supporting several research initiatives at
the Utility Analytics Institute. Previously, she was senior director,
client solutions for Vertex Business Services. Kim has expertise in
advanced analytics, demand side management, and customer
management services, plus more than 20 years of experience in the
utilities and telecom sectors. Earlier in her career, Kim held
leadership positions at AT&T in product management, regulatory affairs, and sales. She
holds a BBA from Texas Tech University and an MBA from St. Edward's University.
Mechele Herres is focused on the utilities vertical as a Marketing
Solutions Manager at Interactive Intelligence, a role she has held
since November 2011. Her experience in the utilities industry also
includes previous positions at Columbia Gas and Time Warner Cable
Business Class. With additional time at IBM and Cardinal Health,
Mechele’s career has spanned roles in marketing, sales, sales
training, and product development and management.
Our Panel of Contributors
Roberta J. Fox
Chairman and Chief Innovation Officer
FOX GROUP Technology
As a senior technology management consultant, Roberta has worked
with a number of utilities, enterprise organizations, manufacturers,
and service providers throughout Canada. She helps these
companies develop technology strategies and services for next
generation voice, data, VoIP, unified communications, contact center, and other IT and
telecom solutions. She also is actively involved in several leading professional
associations geared to advancing the use of telecommunications technologies for
Canadian organizations, and participates regularly in telecom industry analyst and
consultant advisory councils where she provides guidance on emerging technologies
and trends throughout North America.
In addition to her current role at FOX GROUP, Roberta’s 30-year career includes having
held director and senior level positions at AT&T Solutions, Deloitte Consulting, EDS
Canada, Hewlett Packard, and Citibank Canada. As an accomplished author, she has
written or commented in hundreds of articles in business and technology publications
throughout Canada, the US, and internationally. Her new book, 101 Telework Tips –
How to succeed in the virtual world, is set to be released in early 2014.
© 2013 Interactive Intelligence, Inc. 16 The Aging Utility Workforce
Angelique Keavney
Human Resources Leader
Idaho Power
Angelique joined Idaho Power Company in 2006 as a Human
Resources Leader, where her primary responsibilities currently
include talent acquisition, diversity and K-12 outreach, workforce
planning, and on-boarding. Prior to joining the Idaho Power team, she spent six years
in the staffing industry with a focus on recruiting and workforce planning. Angelique
sits on several education advisory boards including the Governor’s Science and
Technology Roundtable, Meridian School District’s Technology Advisory Committee,
Skills USA, and I-Stem.
Dawn Miller
Manager of Organization and Workforce Development
Sacramento Municipal Utility District (SMUD)
Dawn is Manager of Organization and Workforce Development for
SMUD, and leads a team chartered to help envision and create the
SMUD organization “of the future” while also providing tactics to
develop the current workforce. She joined SMUD in 2004 as a Change Management
Specialist, within SMUD’s Business Technology Unit. Prior to SMUD, Dawn served as
Director of Human Resources Development for Longs Drug Stores, a California-based
retail chain, where she led training and internal communications functions and created
the chain’s Organization Development practice. Dawn is a graduate of Pepperdine
University, with a Masters of Science in Organization Development.
Joel Gallagher
Manager of Contact Center
Citizens Energy Group
Joel is the Manager of the Residential Contact Center with Citizens
Energy Group. She has 24 years of experience in the customer
service and client relationships fields, focusing on the utility
industry’s diverse group of opportunities. Joel began her career with the City of
Indianapolis, Department of Public Works, where she built a foundation in customer
service, billing, and revenue assurance for the wastewater utility. She then spent a good
part of her career with Indianapolis Water, working for the nation’s largest public-
private partnership involving a water utility. Joel has been with Citizens Energy Group
since August 2011.
doc_833753853.pdf
Fact: The utility industry's workforce is aging, and according to industry analysts at Ovum, it's a growing concern to utilities worldwide. The concern - and risk - is "brain drain," and utilities are witnessing it at an increasing pace as long tenured employees begin to retire. These are people who've amassed years of experience and who have a deep-seated understanding of the industry, and their departure is leaving a void of knowledge.
The Aging Utility Workforce
Business Impacts, Technologies, and Material Strategies
to Address the Challenges
Kim Gaddy
Senior Analyst
Utility Analytics Institute
Mechele Herres
Solutions Marketing Manager, Utilities
Interactive Intelligence, Inc.
© 2013 Interactive Intelligence, Inc. 2 The Aging Utility Workforce
Contents
Introduction ........................................................................................................................ 3
No urgency to replenish the labor force ............................................................................. 4
New technologies are the bigger hurdle ............................................................................ 4
Utilities must manage corporate knowledge better .......................................................... 4
Difficult questions are forthcoming… and soon ................................................................. 5
Q&A with the Experts ......................................................................................................... 6
1. What are the major impacts of an aging workforce? ............................................... 6
2. Do existing human resource policies need to change?............................................. 7
3. How can technology help bridge the gap? ............................................................... 9
4. Is your organization experiencing a rapidly changing workforce first-hand? ......... 10
5. What are the business process implications? ......................................................... 10
6. What obstacles have you encountered? ................................................................ 11
7. What are your immediate and long-term plans to address the loss of
critical players? ....................................................................................................... 12
8. What approaches can utilities adopt to appeal to the next generation
of workers? ............................................................................................................. 13
9. What best practices advice would you share?........................................................ 14
The Authors ....................................................................................................................... 15
Our Panel of Contributors ................................................................................................. 15
Copyright 2013 Interactive Intelligence, Inc. All rights reserved.
Brand, product, and service names referred to in this document are the trademarks or registered
trademarks of their respective companies.
Interactive Intelligence, Inc.
7601 Interactive Way
Indianapolis, Indiana 46278
Telephone (800) 267-1364
www.ININ.com
Publish date 11/13
© 2013 Interactive Intelligence, Inc. 3 The Aging Utility Workforce
Introduction
Fact: The utility industry’s workforce is aging, and according to industry analysts at
Ovum, it’s a growing concern to utilities worldwide.
1
The concern — and risk — is
“brain drain,” and utilities are witnessing it at an increasing pace as long tenured
employees begin to retire. These are people who’ve amassed years of experience and
who have a deep-seated understanding of the industry, and their departure is leaving a
void of knowledge.
Compounding the issue is that the utility industry in general has failed to recruit new
talent to replace this aging pool of expertise. Over the last 20 years in particular, utility
companies in the US have failed to look ahead and now employ a much higher
percentage of workers aged 45-64 than all other US industries combined (Figure 1). Look
ahead 10 years, and workers in this age group will be exiting the workforce with very
few experienced employees to step in and replace them.
Figure 1. More than half of the US utilities workforce are aged 45 or older (source: BLS Population Survey
2010, Ovum report #OI00139-044)
A similar situation has emerged in utility sectors globally. In findings comparing the
European utilities industry to all others in that part of the world (Figure 2), for example,
nearly 30 percent of the utilities workforce is between the ages of 50 and 59. Of this
group, 32 percent will retire in the next 10-15 years. While workers in this age range are
currently leading the global utilities industry knowledge brigade, they’re also set to
contribute most heavily to the brain drain problem.
1
2013 Trends to Watch: Utilities Technology (IT002000242), Ovum, Oct 2012
© 2013 Interactive Intelligence, Inc. 4 The Aging Utility Workforce
Figure 2. Age range of the utilities workforce in Europe compared with industries overall (source: Eurostat
Labour Force Survey 2010, Ovum report #OI00139-044)
No urgency to replenish the labor force
There are a number of reasons why utilities companies have failed to replenish their
labor force with younger workers, both in the US and worldwide. But a leading cause is
the common industry practice of “jobs for life,” in which specialized, nontransferable
skills in engineering have led to lengthy employee tenure and low staff attrition.
Succession planning therefore has remained a minimal priority for most utility
companies, and any planning for recruiting, onboarding, and training new employees
has largely been inadequate.
New technologies are the bigger hurdle
At the same time, the utilities industry has been slower than other sectors to adapt new
technologies like mobile communications and business process automation to make
operations more efficient. This trend is changing as some utility organizations are finally
turning to these kinds of tools, although older generation workers generally remain
hesitant to warm up to them. Of course, not all employees of an older generation are
averse to new technologies. Some workers in this age group have adapted quite well to
new electronic and mobile technologies, and use them to their advantage every day. But
more often, older employees find technology to be intimidating when they aren’t
familiar with it. Beyond email and the telephone on their desk, these employees are less
inclined to learn about and use technologies like smart metering or a content
management system because they view them as being complex.
Utilities must manage corporate knowledge better
Ovum’s 2013 report on utilities trends and technology points out that while the
industry’s aging workforce has “disparate effects on utilities,” the issue also impacts
technology companies that cater to the industry. Most important for these vendors,
Ovum says, is understanding the requirement utilities organizations have to improve
how they manage corporate knowledge. This requirement has set the stage for
© 2013 Interactive Intelligence, Inc. 5 The Aging Utility Workforce
technologies like business process automation (BPA), content management and other
similar solutions within the utilities sector. Moreover, BPA and knowledge management
can help utilities mitigate the effects of retiring workers, in that technology provides the
bridge to managing knowledge moving forward. In fact, utilities organizations that have
implemented BPA and knowledge and content management systems, and that are
capturing information and knowledge more effectively by using solutions such as
workforce management (WFM) systems, are finding technology to be an effective and
sustainable alternative for halting brain drain.
Yet as Ovum also warns, with thousands of experienced employees still expected to
leave the industry over the next decade, implementing knowledge management
technology alone may not suffice. It is urgent, then, that utilities organizations automate
the business processes most at risk from employee retirements, a risk that’s most
prominent on the operations side of the business.
Difficult questions are forthcoming… and soon
The average age of workers in the utilities industry has been trending upwards for the
past two decades, and while economic conditions have delayed their retirement plans,
the day is coming that many knowledgeable, specialized employees will finally walk
away. As an industry, are we prepared?
Utilities organizations worldwide must address several key issues soon, and do so in an
expedient manner. Tops among them:
? Steps to take to avoid the loss of valuable institutional memory
? Effectively backfilling critical positions, those with the highest retirement rates
? The industry itself attracting and retaining a new generation of workers
? Improving internal collaboration among disparate business units, and within the
utility culture
Finding solutions to these and similar issues will demand a comprehensive approach.
Some solutions will come in the form of innovative new human resources policies. Other
solutions may stem from best practices adopted by other industries dealing with similar
concerns. But ironically, many solutions for reversing the aging employee trend could
circle back to technology. Consider, for instance, that new knowledge and document
management systems can help protect against brain drain, with business process
automation playing a major role. Utilities are beginning to use data and process
automation tools to trigger, prioritize, and route tasks and to drive needed
communications to employees and customers. Business process automation: 1)
simplifies the human technology interface for those less comfortable with newer
technologies, 2) reduces the risk of errors or delays and guides new employees lacking
in experience to take the correct actions in a timely fashion, and 3) increases overall
operational efficiency, minimizing the number of employees that will need to be
replaced. To these distinct extents, process automation tools offer solutions to many
facets of the aging workforce challenge.
© 2013 Interactive Intelligence, Inc. 6 The Aging Utility Workforce
Q&A with the Experts
Offering their perspectives on the aging utility workforce are utility industry human
resources professionals, Angelique Keavney of Idaho Power and Dawn Miller of
Sacramento Municipal Utility District. Also on our panel are Joel Gallagher, a contact
center manager at Citizens Energy Group and Roberta J. Fox, chairman and Chief
Innovation Officer of FOX GROUP Technology. Here are the panel’s responses to
industry issues now considered to be most pressing.
1. What are the major impacts of an aging workforce? What aspects are
you most concerned about?
Keavney: The impacts I envision can be divided into three categories:
1) Replacing the knowledge. We anticipate a significant exodus over the next
five years. Nearly half of our workforce will be retirement eligible by 2018.
Beyond backfilling vacancies, these employees have 30-40 years of
knowledge that we need to capture.
2) Turnover. If we were to lose 40-50 percent of our workforce, the cost to
hire and train new employees would be substantial.
3) The ability of employees to perform physical work as they age. Many
positions are physically demanding. We’re experiencing an increase in
injuries and health costs.
Miller: My biggest concern is losing scarce knowledge. We have a lot of legacy
equipment and plants and rely heavily on homegrown knowledge. While I’m
confident that we can keep up with new technology and grow new skills, running
the business still requires legacy system expertise. I’m also concerned about the
loss of specialized skills that may reside only in one or two people.
Gallagher: Early retirements are my major concern. We’re losing many senior
subject matter experts who understand the business. The aging workforce doesn’t
deal well with change, changes to technology or with technology in general. These
employees tend to make a rather quick exit largely because they are unable to
cope with change and the stress level. We often don’t get the chance to convince
them to stay or offer more training. They decide to quit or retire and seven days
later they’re gone.
Fox: The utility sector is a highly educated, high-knowledge-required sector. Some
of the major impacts that I see include:
1) A shortage of people resources with the required education and
experience
2) A shortage of sector knowledge tied to processes and procedures, and
3) Public safety risks related to poor business process documentation
practices.
© 2013 Interactive Intelligence, Inc. 7 The Aging Utility Workforce
Utilities have an expensive and skilled workforce and that is true even for junior
roles. Most utilities have a high percentage of engineers, project managers, and
licensed trades. I was a field engineer in my younger days and had to obtain safety
and knowledge certifications annually. It takes time and money to build and
maintain that expertise. The job only gets harder as experienced employees exit,
and I understand the challenges. The youngest employee at FOX GROUP is 42, and
the oldest has been working for 45 years. It takes 10-15 years to develop the
knowledge required. It takes 1,000 hours to train someone with 20 years of telecom
experience to become a consultant.
2. Do existing human resource policies need to change to address the
realities of an aging workforce and if so how (for example,
teleworkers, flex time, part time)?
Keavney: To retain our aging workforce, we need to be more flexible. We’re
receiving more requests for leave of absences and changes in the type of work
performed though we haven’t yet received many requests for job share or part-time
opportunities. We are viewing how we can develop career paths for aging
employees in physically demanding jobs. We’ve considered flex time and
telecommuting and found that our company is not built for teleworkers. Our jobs
require collaboration, and it’s important for employees to be at work for meetings,
to work on projects, and to be here for our customers. Plus, some aging employees
struggle with the technology required for teleworking, so it hasn’t been as
successful as we hoped.
To attract and retain a new generation, we’re evaluating which policies may make
us less attractive. Millennials value flexibility, don’t want 10-hour work days, want
the opportunity to telecommute and want a collaborative work environment. We’re
implementing the new technologies that Millennials believe necessary to perform
their work. A good work-life balance is incredibly important to them so we’re asking,
are we too rigid in our core working hours to attract and retain the best-qualified
candidates?
What new hires expect is different from what existing employees want, even in
benefits packages. We’re working hard to maintain our status as an employer of
choice for both groups.
Miller: We have a good policy structure in place to start from. Part-time
opportunities and job rotation exist in some places across our business. Flex time is
role-specific (for example, employees in our power system operations work
different shifts given the 24/7 operation). Our call center has a contingent of remote
workers equipped to work from home in the event of an emergency. I see these
types of things continuing and extending as appropriate. Not every job lends itself to
any or all of these choices.
© 2013 Interactive Intelligence, Inc. 8 The Aging Utility Workforce
The new generation is radically different. They want to work for something they
believe in and expect a say in their career destiny. Electric utilities have not had to
address these issues before, and some are not equipped to deal with these new
expectations. We’re no longer hiring people who want to get into a job that is
secure for the next 30 years so we will need to adapt and make strategic policy
changes to attract these workers.
Gallagher: We offer flex time and are looking at telecommuting and other options
for our younger folks and the general population. Members of our aging workforce
are more apt to say that these types of changes are “just too much for me.” The
major issue for our aging workforce and for us is training. Stress management
training, training on how to deal with change and longer training periods when
technology changes or when we expose them to something new. It’s really on us to
embrace them and help them embrace the change. We need to get ahead of the
curve from a training standpoint versus dealing with it after the fact.
Fox: Utilities seem to be more rigid in sticking with traditional employment
practices. My observation is that some utilities have not kept current and still rely
on management and employment policies more characteristic of the 1950s, perhaps
up to 1970s.
The telecommunications sector is starting to bring back engineers who’ve retired to
work part time. Some may assume that a $100,000 engineer will expect a $100,000
per hour equivalent though that’s not necessarily the case. They may come back at
much lower rate because that’s better and more fun than working part-time
someplace for minimum wage. Utilities need to ask the question, why can’t they do
the same?
I’m a former director of the Canadian Telework Association and have been a
teleworker for almost 30 years. That’s one reason FOX GROUP is run as a telework-
enabled virtual firm. It’s been interesting to develop the required processes,
policies, and procedures. It has been an evolutionary process to develop the
structure to support the fact that an employee may work 10 months of the year and
then be gone for two months as a snowbird. The only way FOX GROUP has been
able to attract its exceptional staff is because we offer part-time, flex-time, and
telework opportunities.
Industries, like financial services, have adopted more progressive policies. From my
vantage point, the utility industry is probably lagging the farthest behind. Our
experience has been that when you encourage telework, part time, flex time or
letting retirees come back in contract roles some utilities say, “We can’t do it; the
unions won’t let us.” We work with the government and education sectors that are
just as unionized and yet seem to be able to change. Other unionized sectors have
adopted more flexible work policies, so why not utilities?
© 2013 Interactive Intelligence, Inc. 9 The Aging Utility Workforce
3. How can technology help bridge the gap? Do you see business
process automation, content management and knowledge
management helping in particular?
Keavney: We’re beginning to use technology to automate processes, potentially
reducing staffing needs. To change an employee’s address or withholdings was once
a manual, paper-based process. Employees now make these changes online. Ten
years ago, linemen worked off of paper orders. Today, everything is tracked in a
mobile workforce system that identifies the location of an outage or a meter
change-out. Whenever a lineman leaves a job, they enter notes about how that job
was handled and who performed what work. The next lineman picking up that work
has access to that information. We’ve also implemented a tool that provides
employees access to best practices documentation. Automation has come to
workforce planning and we can forecast when an employee is likely to retire.
Customers are also seeing the benefits as most transactions can now be
accomplished online.
Miller: As employees retire or change jobs, we conduct in-depth interviews and use
technology to capture that legacy information. Our learning development group is
moving to “just-in-time” learning with the goal of delivering information when and
where needed via the web, smartphones, or even YouTube videos. We are
extending the use of the mobile data terminals in our trucks to enable field
resources to access learning modules and content as needed.
Gallagher: Technology can definitely help. For example, we have a site that our
associates use to look for the information that they need to do their jobs. This
system was sufficient when we were just a gas utility. With the addition of a water
and wastewater utility, we’ve recognized that the system is not returning the
specific data they seek. We’re moving to a new platform that will enable them to
locate the data they need in an instantaneous fashion. We hope to relieve some of
the stress and frustration they feel when a customer is on the phone and they are
unable to find the wanted information. We also constantly ask them to watch their
call time, so streamlining customer interactions by putting needed information at
their fingertips will make a world of difference.
Fox: Technology solutions can help bridge the gap. Laptops, high-speed Internet,
tablets and smartphones are everywhere. Portable technology, web-based
applications, and the ability to have remote knowledge workers as part of a
managed and measured job role is a game-changer. The business models of some
companies like the FOX GROUP and some industries like the airlines are founded on
a distributed and mobile workforce. Everyone from engineers to customer service
representatives can work from home, securely log on and access the systems they
need to do their jobs. Business process automation, content management,
knowledge management, and other technology solutions make it possible to extend
the careers of current employees and attract and enable the effectiveness of new
employees.
© 2013 Interactive Intelligence, Inc. 10 The Aging Utility Workforce
4. Is your organization experiencing a rapidly changing workforce
first-hand? In what area of your company do you foresee the most
impact?
Keavney: Yes, our workforce is changing overnight. Because of the retirement-based
exodus, our culture has changed dramatically. We’ve hired one quarter of our
workforce in the last five years. It’s incredibly difficult to replace an experienced
engineer. Our cross-training program requires engineering leaders to work in
another area for up to a year – a planning engineer may go work in transmission or
construction. Entry-level engineers must do at least three cross trainings in other
areas — on a line or stations crew, in accounting, planning, and so on to progress in
their careers.
The goal is to ensure that we have broad-based entry-level engineers with a holistic
view of the enterprise to replace the experienced engineers that we lose.
Miller: The economy has stymied the significant departure I expected, but it will
pick up. About half of our employees will be retirement eligible in the next three
years. Some levels and groups are impacted more than others. One group we’re
watching is our IT group as the technology portfolio is changing radically and
employees supporting our legacy systems are retiring.
Another population meriting close attention is our Power Supply and Grid
Operations group. Workers are being courted to move between our utility and
surrounding utilities and organizations like the California ISO and Western Area
Power Administration. There’s limited expertise and much demand for that
expertise.
Gallagher: Yes, and we’ve got two different age groups in our workforce today. We
have the aging workforce, and the younger workforce. We are struggling with how
we as managers merge these two groups to create a team that is going to be
successful. These two groups have grown up in two different eras. We have some
younger employees coming in with piercings and tattoos, and that may be off-
putting to some of our long-standing employees. How do we get to a happy
medium?
5. What are the business process implications and how will business
processes need to change?
Keavney: New technology is driving process changes. Implementing new processes
hasn’t been as challenging as gaining buy-in from our existing workforce on using
and becoming proficient with the new tools. We are spending more time training
aging employees. For example, newer customer service representatives are easily
adapting to our new Customer Information System (CIS) while more experienced
employees have struggled some.
© 2013 Interactive Intelligence, Inc. 11 The Aging Utility Workforce
When a longtime employee leaves, we document critical processes so that someone
else can pick up and proficiently perform the work. We are also attempting to
capture “water-cooler knowledge.” Long-term substation technicians know which
boxes at which substations require a key and which have a keypad. New station
technicians need that information. Almost every department now has a process
documentation goal.
Miller: We’re using more bucket trucks to reduce climbing given safety concerns.
Also motivated by safety, we decided to contract out vegetation management.
We’re looking to streamline business processes, and we look for the outcomes to
help us address aging workforce challenges and adapt to new technology.
Gallagher: For those employees who struggle with technology change, the simpler
we can make things and the more training we can provide the better. We have a
training scheduled today, and we’ve done much training over the last two years.
Even so, perhaps we should have provided longer training periods for some of our
folks, especially for those persons who left the business. Had we done it differently
and provided one month of training instead of two weeks or provided more hands-on
and side-by-side training, the outcome might have been different. We have lost many
good people over the last two years due to change and the stress that it has created.
6. What obstacles have you encountered while trying to deal with
aging workforce challenges (financial, regulatory, union, and so on)?
Keavney: Cost is the major issue. If I knew that someone in a critical position was
retiring, I would replace that person six months early to enable cross training.
However, there’s tremendous pressure from regulators to reduce costs. Our
customers are struggling, and we are watching every penny. It’s an incredible
balancing act as we attempt to replace critical resources. We must be careful to
avoid any perception that we spend excessively on rich benefit or employee
compensation programs. Simultaneously, we need to be an attractive employer,
and we’ve got to keep on the lights.
The other thing is uncertainty. We don’t know when employees will actually
leave. The struggling economy has affected employees’ decisions. We anticipate
that the exodus might happen all at once as the economy recovers.
Miller: The bad economy and lower-than-projected turnover have slowed
progress. I’ve been here almost 10 years and remember projecting that half of
the workforce would be gone in five years, and they’re largely still here. We only
have single-digit turnover, though this rate should increase as the economy
improves. This will enable us to try even more new things from a process
perspective. We may find it easier to hire and train new employees than
retraining existing employees to adopt new technologies at their careers’ end.
© 2013 Interactive Intelligence, Inc. 12 The Aging Utility Workforce
We recently negotiated new contracts with our two unions, and everyone seems
satisfied with the set of work rules adopted as they don’t appear to inhibit any of
the changes that we need to make. We have great relationships focused on
mutual success.
Gallagher: Primarily, it is getting the business support and the funding we need
to provide the training and the tools that our folks require to be successful.
7. What are your immediate and long-term plans to address the loss of
critical players?
Keavney: Immediate: Every day my team looks for opportunities to fill our pipeline
with the most qualified candidates. It’s a timing issue as jobs aren’t always readily
available. We spend time in K -12 programs and meet with students as early as sixth
grade to discuss energy careers. As a community partner, we see it as our job to
encourage students to take science, technology, engineering, and math (STEM)
classes and to pursue technical trade or four-year degree programs.
We also have a strong paid internship program. Many students view the utility
industry as dangerous, dirty, and dull. We want students to understand that
technology changes are making this an exciting and fast-paced industry. Maybe
these interns will choose to work for us and maybe they won’t. Our hope is that
they’ll tell their friends how great our company is and how terrific the industry can
be. We also have a cross-training program to introduce our bright, career-minded
employees to jobs across our company.
Long-term: We’re putting processes in place to ensure that leaders are thoughtful
about whether to backfill and with what skill set each time someone leaves. Utilities
face a huge skills gap in the next 5-10 years. If we don’t do a good job building our
pipeline, it will be difficult to keep on the lights. We need to ensure that: 1) we’re an
attractive employer of choice 2) qualified graduates are ready to join us, and 3)
current employees have the skills to fill critical and leadership vacancies as they
occur. All three of these things are absolutely imperative.
Miller: Immediate: An individual on my staff is dedicated to pipeline development
and coordinates efforts across the organization. This person works with the
educational community (high schools, trade schools, and colleges) to influence the
curriculum and develop the needed skills. The lack of STEM education creates a
pipeline gap for us. We want to cultivate relationships with facilities and students
and change the perception that working for a utility means climbing a pole.
Long-term: Our goal is to expand successful programs implemented to even more
districts across our service territory. We are also evaluating our practices for
replacing critical players. Fortunately, we hired skilled employees when the supply
was more plentiful. Going forward, I see growing needs and fewer candidates. The
scarcity of power engineers is concerning. The demand from California utilities and
related entities is forecast at four to five times the number of graduates in California
each year. So, I want to work on us being more comfortable hiring those new
graduates and building their skills internally rather than hiring them ready-baked.
© 2013 Interactive Intelligence, Inc. 13 The Aging Utility Workforce
Another focus is finding people who naturally gravitate to fields that require
flexibility, appropriate risk taking, and adaptability to constant change. Many
engineering graduates are comfortable with the black and white and less so with the
now constant shifts in our industry.
Gallagher: Immediate: We are constantly recruiting for new faces. We don’t have
trouble finding candidates partly because of Citizens Energy Group’s reputation in
the community, though it is hard to identify those persons who are truly interested
in a contact center role versus just a path into the organization. I need someone
who is passionate about customer service and technically savvy. We seek individuals
with a broad skill set who want to help our low-income, senior citizen, and
environmentally conscious customers.
Citizens’ core values are important to us, and we stress them to new employees. It’s
not just a matter of finding a qualified candidate. We ask specific questions in the
recruiting process to identify specific individuals who meet our core values. We do
multiple phone screens and phone interviews. We rely on agencies to conduct
behavioral interviews and have found those interviews to be most beneficial. Once
we find a good candidate, it’s my goal for that candidate to become a long-term
contact center employee. We devote as much training as needed to get new
employees where they need to be. In the short term, the focus will be on providing
new hires with the training and tools they need.
Long-term: Our entire business needs to embrace the culture change. Baby
boomers are nearing retirement. If we want to retain and keep our subject matter
experts engaged, our entire company needs to be thinking about how to make that
happen — whether that is more training, giving individuals special opportunities,
and so forth.
8. What approaches can utilities adopt to appeal to the next generation
of workers?
Fox: There’s a misperception that the only jobs are being a lineman or working in a
nuclear plant. There are all kinds of funky and cool utility jobs. The industry needs to
do a better job of education. There are a wide variety of roles, and the vast majority
of them do not involve dealing with high voltage or climbing a pole even though that
may be the perception of many.
Millennials are all about flexibility: location-flexibility, hours-flexibility, and job
flexibility. They are intrigued by the chance to use cool, next-generation
technologies. The best thought leadership folks in my company came after me. We
work remotely and offer flexible employment options. We provide a test lab and
video capabilities and give employees the opportunity to play with the latest tools.
© 2013 Interactive Intelligence, Inc. 14 The Aging Utility Workforce
9. What best practices advice would you share?
Fox: Utilities should consider:
? Job shadowing, offering new hires the chance to work with an experienced
employee. This type of mentoring would appeal to many younger
employees.
? Cross-training and job rotation, at one time a standard practice in the
telecom industry.
? Job reassignment, to speak to the flexibility expectations and short
attention spans and desire for job changes every year or so that
characterize Millennials and to address the needs of aging workers. For
example, my brother-in-law was a hydro lineman and installed large ducts
and vents in a nuclear factory. As his job became more difficult with age, he
pursued, secured, and excelled in a purchasing and procurement role.
? Every opportunity to leverage technology, to capture the invaluable
institutional memory and experience residing in the aging workforce,
automate business processes and support the training of both new and
aging employees.
Knowledge must be transferred to the next generation of workers. Another part of
the equation is that many critical processes and procedures haven’t been
documented. While it will require investment to resolve this issue, it is essential to
ensure that the knowledge is not lost forever.
Management needs to work with unions and sell alternative work styles. I asked my
brother-in-law, a former union steward, whether he would have considered going
back to work after his retirement. He said, “Absolutely, in a heartbeat, as long as I
could sit behind my computer and work half days or maybe 8-10 months a year.”
And he’s confident that he could have sold the idea to fellow union members; but,
no one ever asked. In his purchasing role, he was responsible for specialized steam
fitter and HVAC components. The utility ran into problems after his departure.
Errors were discovered, and he was asked to return for a couple of weeks to correct
the mistakes. Those mistakes and associated downstream impacts resulted in
negative financial repercussions for the utility. If the utility’s employment practices
had been more flexible, those errors could have been avoided, and his 30 years of
experience could have been retained.
Don’t benchmark against other utilities; instead, look to other sectors requiring
specialized knowledge like telecom or finance. You may be surprised and uncover
something unexpected that will pay significant dividends. Learn how JetBlue has
built a flexible and adaptable workforce and has achieved the lowest cost of
distribution and the highest customer and employee satisfaction in the airline
industry. They have used all kinds of tools, applications, and technologies to achieve
their success. To find innovative new ideas, look to other industries that share
similar characteristics and face similar challenges.
© 2013 Interactive Intelligence, Inc. 15 The Aging Utility Workforce
The Authors
Kim Gaddy is an analyst supporting several research initiatives at
the Utility Analytics Institute. Previously, she was senior director,
client solutions for Vertex Business Services. Kim has expertise in
advanced analytics, demand side management, and customer
management services, plus more than 20 years of experience in the
utilities and telecom sectors. Earlier in her career, Kim held
leadership positions at AT&T in product management, regulatory affairs, and sales. She
holds a BBA from Texas Tech University and an MBA from St. Edward's University.
Mechele Herres is focused on the utilities vertical as a Marketing
Solutions Manager at Interactive Intelligence, a role she has held
since November 2011. Her experience in the utilities industry also
includes previous positions at Columbia Gas and Time Warner Cable
Business Class. With additional time at IBM and Cardinal Health,
Mechele’s career has spanned roles in marketing, sales, sales
training, and product development and management.
Our Panel of Contributors
Roberta J. Fox
Chairman and Chief Innovation Officer
FOX GROUP Technology
As a senior technology management consultant, Roberta has worked
with a number of utilities, enterprise organizations, manufacturers,
and service providers throughout Canada. She helps these
companies develop technology strategies and services for next
generation voice, data, VoIP, unified communications, contact center, and other IT and
telecom solutions. She also is actively involved in several leading professional
associations geared to advancing the use of telecommunications technologies for
Canadian organizations, and participates regularly in telecom industry analyst and
consultant advisory councils where she provides guidance on emerging technologies
and trends throughout North America.
In addition to her current role at FOX GROUP, Roberta’s 30-year career includes having
held director and senior level positions at AT&T Solutions, Deloitte Consulting, EDS
Canada, Hewlett Packard, and Citibank Canada. As an accomplished author, she has
written or commented in hundreds of articles in business and technology publications
throughout Canada, the US, and internationally. Her new book, 101 Telework Tips –
How to succeed in the virtual world, is set to be released in early 2014.
© 2013 Interactive Intelligence, Inc. 16 The Aging Utility Workforce
Angelique Keavney
Human Resources Leader
Idaho Power
Angelique joined Idaho Power Company in 2006 as a Human
Resources Leader, where her primary responsibilities currently
include talent acquisition, diversity and K-12 outreach, workforce
planning, and on-boarding. Prior to joining the Idaho Power team, she spent six years
in the staffing industry with a focus on recruiting and workforce planning. Angelique
sits on several education advisory boards including the Governor’s Science and
Technology Roundtable, Meridian School District’s Technology Advisory Committee,
Skills USA, and I-Stem.
Dawn Miller
Manager of Organization and Workforce Development
Sacramento Municipal Utility District (SMUD)
Dawn is Manager of Organization and Workforce Development for
SMUD, and leads a team chartered to help envision and create the
SMUD organization “of the future” while also providing tactics to
develop the current workforce. She joined SMUD in 2004 as a Change Management
Specialist, within SMUD’s Business Technology Unit. Prior to SMUD, Dawn served as
Director of Human Resources Development for Longs Drug Stores, a California-based
retail chain, where she led training and internal communications functions and created
the chain’s Organization Development practice. Dawn is a graduate of Pepperdine
University, with a Masters of Science in Organization Development.
Joel Gallagher
Manager of Contact Center
Citizens Energy Group
Joel is the Manager of the Residential Contact Center with Citizens
Energy Group. She has 24 years of experience in the customer
service and client relationships fields, focusing on the utility
industry’s diverse group of opportunities. Joel began her career with the City of
Indianapolis, Department of Public Works, where she built a foundation in customer
service, billing, and revenue assurance for the wastewater utility. She then spent a good
part of her career with Indianapolis Water, working for the nation’s largest public-
private partnership involving a water utility. Joel has been with Citizens Energy Group
since August 2011.
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