Embattled Utilities Face 'Talent Storm'

Almost half of the engineers employed by power and utility companies will become retirement eligible this year, according to analysts from Deloitte Consulting, and venerable old electric companies are finding it increasingly difficult to attract new talent.
Add this "talent storm" to the "death spiral" caused by rooftop solar adoption, and utilities face a suddenly rocky future.
"This is really an unprecedented time," said Garth Andrus, a partner in Deloitte Consulting's human capital practice, during a webinar for utility executives last week. "We're finding all these individual kinds of turbulence and when you put them all together they really can create kind of a supercell storm of challenges.
Utilities that grew up burning fossil fuels at power plants and sending electrons one-way across copper wires now must cope with an exodus of aging employees who worked under that paradigm, a perplexing influx of data from the smart grid, competition for business from renewable energy and competition for talent from sectors, like tech companies and the automotive industry, that were never seen as competitors before.
"We've got the skilled talent shortage, we've got mass retirements, we've got rapidly developing new technologies and skill needs, we've got a lot of people competing for existing employees, so keeping your own as well as competing for those who are coming from campus and from technical schools and experienced hires."
The talent storm looks a lot like a fiscal cliff when you consider the pension obligations utilities have to their new retirees.
"Then there's a pension burden, because of the mass retirements that are occurring."
Because of the pension burden, utilities will have less money on hand to compete for new talent. Deloitte estimates the industry will need 100,000 new skilled workers by 2015.
"One-hundred thousand might not seem like a lot across the whole industry," said Brad Denny, who leads Deloitte’s U.S. Human Capital Practice for Power & Utilities, "but it really is significant because these are new skills."
With the smart grid, utilities may be losing meter readers but they need wonks who can help them process massive new volumes of data. And when they look to colleges and technical schools, they don't see them coming.
"We can't rely on this (education pipeline) to get enough folks into a power and utilities career," Denny said.
Denny's solutions? Better strategic labor planning and more diversity—"gender, race, LGBT, and veterans background"—in hiring and recruitment. Utilities have traditionally been "under focused" on diversity in the workforce, Denny said, but that focus is needed to attract the best talent, reflect the customer population, and create an inclusive workplace that encourages high performance.
"The key is to create an inclusive culture so not only do you get the right people in, but they stay and they perform better than they would have before."
Denny also offered a list of strategies utilities have taken or should take to attract and retain talent:
• Offer "Boot camps" early in employment to expose line workers to the realities of the job (like climbing poles in cold weather and long hours during outages).
• Cosponsor educational programs with colleges.
• Target veterans: "These are individuals who are used to extremely rigorous and difficult working conditions. They are unbelievably resourceful and tend to be among the most loyal and most passionate employees over a long period of time."
• Allow flexible working arrangements, and good training programs to attract Generation Y empoyees.
• Offer child-care benefits and flexible working arrangements for women. Some utilities have initiated these programs for women and found they improved retention of male employees too.
• Talent branding: utilities should be sure their brand reputation is attractive within the company and without. For examples, a utility in a small-to-medium sized city in the Midwest may be able to lure tech talent away from higher paying city jobs by supporting families and community building.
• Mentoring and sponsorship: Pairing new hires with executives who will advocate for them and put them in challenging roles.
• Offer learning programs that foster career building.
The Deloitte consultants did not name specific companies. In a recent report, Morningstar analysts rated Exelon , Dynegy and Pinnacle West the three companies most at risk from the solar-powered "death spiral."
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