The pace of change has been accelerating for electric utilities in recent years, in large part due to the rise of distributed energy resources like solar, wind and geothermal energy. As the grid transforms from a centralized power network into a web of micro-players selling and purchasing electricity, utilities must evolve into a smart utility that integrates new features and technology into existing processes.
Furthermore, devices are becoming far more intelligent, providing large volumes of data that must be managed and analyzed in order to operate the grid most effectively and deliver the best service to customers. The ever-evolving smart grid is forcing utilities to transform their business models, which will require new skill sets to meet new focuses on IT, distributed resources and customer interaction.
At the same time, the utility industry is facing a major human resource challenge. As Baby Boomers approach retirement, there is a disproportionate number of utility workers who are preparing to leave the workforce compared to those who are ready to enter it due to the declining pool of college graduates equipped with the skills needed to maintain progress and innovate in the smart grid sector.
In fact, 72 percent of energy employers are having difficulty finding quality candidates to fill their positions, as they grapple with an aging workforce and a growing skills shortage. Compound that with the fact that many utilities are running lean with fewer staff expected to accomplish more with less, these human capital issues become even more apparent.
Unfortunately, over the last 20 years, many utilities have not prioritized developing or expanding their workforce. Many factors contributed to this, including the fact that historically, utility employees will often stay with one company throughout their career, making utilities less prepared to handle sudden and rapid turnover. When utilities lack workers with the operational knowledge of how a utility works or the intellectual capacity to understand it, the challenges they face become even more difficult.
While utility companies are taking action to address the impact of the aging workforce, they are faced with a situation that’s somewhat out of their control. More than one-half of the current utility workforce will be eligible to retire in the next 6-8 years. As a result, legacy knowledge and understanding built up over years of utility experience residing with employees who will soon be leaving the workforce has the potential to greatly impact utilities’ ability to continue to innovate and solve the electrical transmission challenges of tomorrow.
Meanwhile the number of graduating engineers entering the utility workforce is on the decline and recruiting new workers with the right skills for the job is becoming more difficult each year. When utilities lack workers with the necessary expertise to succeed in an ever-evolving landscape, the challenges they face become even more burdensome.
So what is a utility to do when it faces losing its best and brightest talent with fewer newcomers ready to step in and create a seamless workforce demographic shift?
Many utility companies understand how the aging workforce will negatively affect their operations, but they struggle with how to address the changes. A solution some utilities may not have considered yet could be the one to save the day: outsourcing and consulting services.
Third-party consultancies are uniquely positioned to address the utility skills gaps for several reasons. First, they are often very large and have the ability to share specialized talent across multiple utility customers where utilities, especially smaller ones, cannot afford to keep as many experts on staff. They also can offer more flexibility.
For example, if an expert on a particular issue is only needed for a short time, consulting firms allow utilities to “rent” specialists, who can share best practices across utilities in the U.S. Additionally some consultancies have the bandwidth to hire on part-time expertise, which can be an attractive offer for some retired utility professionals who welcome the opportunity to provide their expertise, and train the next generation of utility professionals, while still receiving full benefits for part-time work.
Finally, by combining IT professionals or tech savvy Millennials with seasoned utility professionals, consultants can go where the market is headed, not just maintain the legacy of the past. This enables two way learning and a chance to shape the utility of the future.
Outsourcing operations will help address workforce attrition and allow utilities to meet the needs of the rapidly evolving energy landscape. By outsourcing services, utilities can lean on a trusted advisor and partner to assist with operations, which enables utilities to focus on their core business and keep the lights on for their customers.
Third-party consultants can offer utilities industry expertise on smart grid issues and advice on how to manage projects that are beyond employee expertise, assess technical issues, help plan for the future and comply with ever-changing regulations.
By tapping into resources from partners, utilities can augment existing field teams with intellectual capacity to answer questions and think through major issues to support the current workforce, allowing them to focus on providing flexible, reliable and sustainable power to their end-users both now and for generations to come.
Author: Andrew Bennett is the senior vice president of energy at Schneider Electric. With over 16 years of experience in the utility sector, Andrew oversees the Energy Business in the United States, including the Oil & Gas and Utility segments at Schneider Electric.