Disruptive innovation - work & asset optimization

Preparing For The Aging Utility Workforce

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A few weeks ago, my local utility sent out a crew to replace the old wooden electric poles in my neighborhood. I could hear the crew working all day: sawing, drilling, hammering, and moving bucket trucks. But what caught my attention in the cacophony of sounds was the questions the crew would yell out to each other… “Can you show me how to…?” and “Are you sure this is the right way?” and “Why do you do it like that?” This made me wonder: What kind of on-the-job knowledge does a utility lose when its workforce retires? And, what can be done to lessen the business impact of an aging workforce?

Before jumping into those questions, let’s first explore whether the “aging workforce” is a reality in our industry. According to a January 2017 assessment by the US Department of Energy, 25% of US employees in electric and natural gas utilities will be ready to retire within 5 years.[i] The US Department of Labor also estimates that up to half of the current energy industry workforce will retire within 5-10 years; meanwhile, the average age of industry employees is now over 50.[ii] Retirement is a pressing concern outside of the US as well. For example, in the UK, 54% of the water sector workforce is over 45 years old; this figure is slightly smaller for power (52%) and waste management (49%).[iii]

Given these stats, it is unsurprising that many utilities are concerned with addressing the business challenges of an aging workforce. Even if a utility manages to fill open positions with younger workers, there still remains the question of how to collect institutional knowledge that more experienced workers have accumulated over the years. As utilities begin to plan for a significant portion of their workforce to retire, they will need to consider how they will address some critical questions:

  • How will we capture the knowledge of workers nearing retirement? Some of the knowledge in these workers came from training manuals, but much of it has been curated through years of on-the-job experience, both in the field and in the office. This information may not easily be quantified or written down. It is “unstructured” and comes in the form of natural human language, videos, pictures, and engineer notes, rather than neatly organized data tables. Cognitive solutions can use machine learning to understand this unstructured data, while identifying trends and patterns that can be shared with new employees. For example, at Woodside Energy, IBM Watson recommends the best course of action by tapping into 30 years of engineering expertise and 38,000 documents, allowing employees to make quicker, smarter decisions.
  • What skills gaps will their departure create? Roles can be filled either through internal promotions or external hiring. Succession planning can reduce the cost of hiring and training new employees, if the necessary talent is already in your organization. As you evaluate the remaining gaps, consider the skills needed to help your organization succeed in the context of your current business model, and also for your business to thrive in the future. For example: An increasing number of utilities are hiring for skills such as data science, app development, and digital marketing, in order to prepare for an industry shift towards digital business models and energy marketplaces. Talent acquisition tools, such as IBM Kenexa, can help attract candidates with the right kinds of skills, on a variety of media, with faster results.
  • Do we have the software, skills, and capacity to address the challenges of a workforce nearing retirement? In the past, recruitment and hiring decisions may have been based on intuition and personal experience. While those may both be effective, software that uses advanced analytics, data, and behavioral science can increase the quality and fit of new hires, reducing acquisition and turnover costs. However, software alone is not enough to manage the major changes associated with a shifting workforce. Experienced professionals can help guide HR strategy, manage organizational change, improve employee engagement, and drive development of new skills and talent.

Thinking back to the utility crew that was working outside of my office window, I still wonder what is their plan to answer those “Hey, how do I…” questions in the future. As you start to define a strategy around your shifting workforce, IBM is ready to help with cloud-based, cognitive-enabled solutions and industry expertise. Visit ibm.com/energy for more information.

 

[i] U.S. Department of Energy, Quadrennial Energy Review (QER) Task Force report second installment titled “Transforming the Nation’s Electricity System.” Chapter V: Electricity Workforce of the 21st-Century: Changing Needs and New Opportunities. January 2017. Retrieved from https://energy.gov/epsa/initiatives/quadrennial-energy-review-qer on December 11, 2017.

[ii] U.S. Department of Labor Employment and Training Administration “Industry Profile – Energy.” Retrieved from https://www.doleta.gov/brg/indprof/energy_profile.cfm on December 11, 2017.

[iii] U.K. Commission for Employment and Skills briefing paper titled” Energy Production and Utilities: Sector Skills Assessment 2012.” Retrieved from https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/306390/briefing-paper-ssa12-energy.pdf December 11, 2017.

Industry Strategy Lead - Energy, Environment, and Utilities

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