Addressing the Utility Labor Shortage Through Smarter Workforce Management
By Christen Bergerud, EcoSys
One of the most pressing challenges for the utility sector today is a knowledge drain as many of their employees head toward retirement, taking with them decades of knowledge and utility project management experience.
This is not a new challenge. Utilities have faced the looming retirement of their workforce for over a decade, as well as the struggle to find new talent to fill the gap. These issues have been pushed off through deferred retirements and hiring retired workers as part-time consultants, but a more sustainable solution is critical for the industry’s future.
As the utility sector continues to lose workers with critical institutional and operational knowledge, the broader challenges they face-from the rise of distributed energy, a shifting utility business model, regulatory challenges and aging infrastructure-become even more difficult.
The McKinsey report “The Digital Utility: New opportunities and challenges” released in May 2016 discusses how legacy utility business models are being challenged by a plethora of new forces. Renewables, distributed generation and smart grids demand new capabilities and are triggering new business models and regulatory frameworks. The Internet of Things (IoT) promises new product and management options and is ushering in non-traditional competitors to the power space. Meanwhile, governments and regulatory bodies are pushing greener standards for generation and consumption.
To thrive amid these challenges, utilities must evolve and integrate new technologies into existing processes. They must to take advantage of the large volumes of data technology is generating-managing and analyzing information to operate the grid more effectively and deliver the best customer services. In addition, they must do this while keeping their customers’ lights on.
As a result, utilities are constructing and implementing many new projects ranging from multi-billion-dollar grid modernization projects and advanced distribution management system (ADMS) rollouts to a vast array of smaller maintenance projects.
With a looming skills shortage and a multitude of new projects and initiatives, many utilities across the country are turning to enterprise project controls technologies to address these challenges in two important ways. First, by managing project portfolios more strategically in order to assign the right resources to the right projects at the right time. And second, by using software to capture and enforce organizational best practices and ease training efforts.
Smarter Resource Management
The optimal allocation of workforce resources is vital when executing a portfolio of projects. The first step to ensuring the right resources are allocated to the right projects requires the organization to select the best projects to execute.
By combining tactical project cost controls with strategic enterprise-wide planning in a single system, enterprise project controls technologies can help organizations manage individual projects more efficiently and improve project selection to align with corporate strategy, whether it’s a focus on renewables or other strategic initiatives. It also allows utilities to shift quickly from one project to the next when regulatory delays occur. As a result, utilities can avoid unnecessary costs through the elimination or consolidation of low-value projects and optimize their workforce through better allocation of resources on high-priority projects.
Enterprise project controls software applies best practices into workforce planning. As an enterprise solution, it balances an organization’s workforce capacity with project and operational demands. This enables organizations to optimize resources across not only large projects, but also small projects and operational work. Organizations can determine the optimal workforce for each project based on skill, location, region, project priority, cost and any other criteria. The software can forecast skill gaps to help justify resource hiring, and support flexible what-if scenario forecasting.
Not only does the software ensure the right projects are selected and the right resources are assigned to each project, it also provides the project visibility needed to prevent idle resources and excessive overtime. This visibility is critical for organizations to prevent wasting human resources and incurring unnecessary costs.
By leveraging enterprise project controls technology, utilities can optimize their existing workforce, which is critical as they manage the upcoming retirement transition.
Preparing the Utility Workforce of the Future
Part of the aging workforce challenge comes from the fact that the utility industry has experienced a remarkably stable workforce for the past few decades as employees tended to stay at one organization for their entire career. As baby boomers enter or near retirement, the industry is faced with attracting and training new employees from a different workforce. Millennials will comprise half of the workforce by 2020 and are much less likely to stay at one organization throughout their careers, according to the Gallup report, “How Millennials Want to Work and Live,” released in May 2016. So along with attracting and training new employees, utilities must invest in tools that will capture knowledge and best practices as future employees leave after just a few years rather than a few decades.
Many utilities across the country also are turning to enterprise project controls software to capture and standardize best practices across their organizations while simultaneously training new workers through the software’s methods, workflows and business rules. By using templates for all repeatable activities across both capital project work and operational work, the software captures institutional knowledge and educates the workforce while ensuring consistency.
The right enterprise project controls software will adapt to processes that reflect both industry and organizational best practices rather than force users to work the way the software says they must. The software enables process automation, data integration and greater visibility across organizations, and ultimately addresses a number of inherent challenges utilities face when it comes to workforce management and project delivery.
By enforcing industry and organizational best practices, enterprise project controls enable greater resource mobility. Rather than allowing a Wild West approach where individuals do whatever they think is best, standardization ensures that all of an organization’s projects are structured similarly. It ensures that there will be a standard way to account for changes within a project and that forecasts will be generated using the same formulas and approaches. This uniform approach reduces specialization and means that employees across an organization will have the skills needed to work on a range of different projects. As a result, organizations have more human resources to assign to different project types.
As the makeup of the workforce changes and younger workers start to replace those with decades of experience, putting good procedures in place is critical to help less-experienced staff get up to speed quickly. Enterprise project controls software ensures that training new employees goes smoothly and that organizational best practices remain even as employees come and go.
Christen Bergerud co-founded EcoSys, a global leader in enterprise project controls software, and serves as executive vice president of industry strategy. Christen drives global market strategy for EcoSys and works to align project controls software with the needs of customers around the world. Previously, Christen was one of the original designers of the product now known as Oracle Primavera P6.