The utilities industry is facing an unprecedented wave of retirement. Roughly half the industry’s workforce will be retirement eligible within this decade.
Faced with this significant challenge, executives and project managers must consider two core questions:
1. How will you capture legacy knowledge before the outgoing workforce retires?
2. How will you attract and retain the next generation of employees?
There are no universal answers for these questions. However, there are proactive steps each utility can take to get ahead of these challenges.
It begins with recognizing that the utilities landscape is changing and that these shifts must be met head on. The industry’s response to this challenge will define their workforce for decades to come.
Why Utilities Must Address the Retiring Workforce Now
The utilities grid is in decline
A modern marvel in its time, the United States utility grid is in decline. In fact, 60% of utility grid components have exceeded their optimal performance lifecycle.
By 2023, the U.S. will need an estimated 29,000 trained lineworkers to maintain the electric grid and replace aging components.
Unfortunately, this decline is happening in tandem with the current retirement wave. Delivery of crucial services cannot be interrupted, and yet the grid faces unprecedented strain.
The current grid contains roughly 7,300 power plants, 200,000 miles of high voltage cables, and 5.5 million miles of distribution lines. Additionally, there are over 2 million miles of subterranean pipeline, and millions of smaller physical assets that ensure delivery of electricity, water, and gas.
The outgoing workforce was trained to maintain this massive grid. However, as these components age, maintenance often isn’t enough - updates and full replacements are on the rise.
Addressing aging utilities infrastructure effectively will require a massive hiring effort, but the supply of skilled labor is diminishing. 72% of employers currently struggle to make qualified hires.
Utilities must work to position their roles and organizations attractively - a motion that starts with understanding the next generation of potential employees.
Understanding the Next Generation of Utility Employees
Education and the issue of over qualification
To effectively hire next generation workers, utilities must understand how labor demographics have changed.
Millennials are now the largest and most educated generation in the American workforce. This is, counterintuitively, a problem.
25-35% of workers with a bachelor’s degree are overqualified for their current role.
This puts particular strain on the utilities industry, where much of the workforce has been educated in vocational and trade schools.
However, as technology changes, skills needed in the field will also shift. In fact, researchers at PwC predict that 133 million jobs - many of which are in utilities - will require upskilling by 2022.
Education is just one part of the story though. It’s also important to consider millennials in terms of their consumer habits and expectations.
High expectations for consumer experiences
Digital natives demand control and customization in every aspect of their lives. 95% say they would not sign up with an energy provider if it could not provide seamless service.
From utility providers, they expect:
- Two-way communication
- Energy choice and supplements to traditional delivery models
- Rate customization based on their use habits and automation
Yet, in 2018, JD Power concluded that utility providers fared poorly in delivering positive digital experiences across websites, mobile apps, social media, email, chat, and text functions.
The average industry scored 77% in digital proficiency, while utilities scored only 57% on average. Failure to create positive digital experiences has created an image problem - casting utilities as unmodern and out of touch.
For younger generations, there is no ‘before’ and ‘after’ when it comes to digital tools. They have only ever lived in a digital world - meaning they engage with companies and organizations in a completely different way than generations past.
41% of millennials attempt to communicate with energy providers via social media, while 61% want to sign up for remote management of their home devices via mobile app.
To attract millennial talent, utilities need to improve their digital experiences: bringing them more in line with a new set of values and expectations.
A generation of energy disruptors
Younger generations want to be early adopters of new utility technologies and services.
Roughly 40% of millennials say they are willing to take a pay cut to work for an environmentally responsible company, compared to just 17% of baby boomers.
These labor statistics align with millennial consumer decisions.
Demand for distributed energy resources is roughly 87% for next-gen customers. In fact, a study by Yale’s Climate Change Communication program found that millennials are willing to pay twice as much as their parents for green energy.
Why? Because they want to ensure that if a central transmission source goes down, their lives will continue uninterrupted.
How to Attract and Retain a Digital Native Workforce
Provide training opportunities and clear learning paths
A college degree is only one kind of credential for 21st century workers.
While younger generations are more likely to attain higher education, 87% still say that job growth through certification and skills-based training is highly important. They want to continue their education and build a portfolio of certifications throughout their career.
This is known as micro learning and it is creating a “New Collar” workforce that blurs the line between traditional blue and white collar work.
New collar workers often have an Associate’s degree or a non-STEM (science, technology, engineering and math) Bachelor’s. Nevertheless, they are able to develop technology skills through various education paths - often sponsored by their employers.
The utilities industry has many skill-based milestones within traditional trades. This is a huge opportunity to attract younger workers.
Don’t limit training and education to the onboarding process. Rather, find ways to provide continuous training in discrete skills that can be labeled and certified.
Younger generations want proof of their achievements for both satisfaction in their current job, and as a potential accolade when looking for their next role.
Update messaging to address the next-gen perspective
Having grown up in a period of relative upheaval, many digital natives are skeptical of big institutions. After experiencing 9/11, the great recession, multiple natural disasters, and COVID-19 - thinking years in advance is a luxury most cannot afford.
Where previous generations sought life-long job security with a single employer, this is an unrealistic fantasy for most young people today. They are the “job-hopping” generation, and utilities must compete for their talent even if it is for shorter tenures.
The good news is that millennials look favorably on utilities. In fact, 70% say they would consider working with a provider, but don’t fully understand all the opportunities the sector has to offer.
Shifting organizational efforts toward green energy will draw younger generations by demonstrating that innovation is not limited to technology firms.
In terms of messaging, certain words resonate more than others.
For example, millennials look negatively on the term “oil and gas,” but positively on terms like “energy,” “grid,” “clean,” and “renewable.''
The way utilities position themselves is important, and highlighting messages that align with millennial values will be key to any successful recruitment strategy.
Deploy consumer tools in the field
The same digital tools consumers use at home must become equally commonplace at work. While many technologies are already mainstays in the office, utility field operations often still rely on analog methods.
In 2019, less than 10% of field service teams utilized digital knowledge sharing tools. Though this number is predicted to reach 50% by 2025, the sector is still well behind consumer habits.
Traditional skills and toolkits will remain critical to operations. However, linemen, inspectors, and everyone in between will soon need a secure smart device - one that captures and retrieves critical data, enables notifications, and streamlines the work order process.
With smart devices in the field, younger generations will have access to the productivity metrics and communication channels they have come to expect in their everyday lives.
Implementing smart field technologies will help attract desirable job candidates by signaling modernity within the sector and enabling a familiar day-to-day workflow.
Support knowledge transfer with cloud platforms
Cloud-connected smart devices will play a vital role in transferring knowledge from the outgoing workforce to new trainees.
Think of all the information a senior employee has in their head as they walk a job site or complete an inspection task. Only a fraction of that information ever makes it into a document or email.
If trainees were equipped with cloud-connected devices and allowed to shadow senior employees across multiple job sites, decades of knowledge could be captured within a few weeks.
This transfer of information is mission critical for all utilities. When an employee retires, all undocumented information and knowledge is lost, hindering future training processes.
Younger generation can even take the lead to ease the burden on senior employees. They can feel empowered in their work. With a library of vital information at their fingertips they can onboard faster and begin making a meaningful impact sooner.
Hiring the right employee for a position can be difficult. Replacing more than a quarter of the entire workforce seems next to impossible, but it’s not. It’s all about perspective.
The goal cannot be to recreate legacy employees - this is a reinvention of the industry. Providers can build a consumer-driven workforce that is ready to adapt as new technologies and resources shape and reshape the utilities landscape in decades to come.
The grid of the future requires the workforce of the future, and utilities have the opportunity today to shape the industry for decades to come.