Power Industry Faces Retirements

by Doug Eilertson, Sanford Rose Associates

Many power companies are hiring entry-level employees in record numbers. Binging might seem like an easy approach to add retiree replacements quickly, but it is detrimental to company performance and problematic to organization stability. It leaves a company like a python having swallowed a pig.

A never-ending imbalance in the organization’s age mix fosters cut-throat competition as workers vie for limited promotions throughout their entire careers. Employers in the power industry should try a more varied replacement approach, especially after reviewing industry history.

The graying of the power industry is only the tail end of a problem created long ago. It started when power employers faced rapid expansion in the ’60s and ’70s. Power companies and their suppliers recruited hard to get the brightest engineering and business graduates. The promising growth in the U.S. economy and the lure of cheap, plentiful power from nuclear power plants attracted new employees in hoards. Back then, parents boasted of children pursuing nuclear engineering degrees. Their kids would graduate and be sought by all the power utilities and major corporations such as Westinghouse Electric Corp. and General Electric Co.

Through the ’80s, the lure of power jobs dimmed and top college engineering students opted for majors in electronics and computers. As the power utility industry began maturing, its mergers consolidated. Many jobs went away, and the graying of the power industry began, although only around the temples. Some hiring demand existed in power, but largely it was met by hiring experienced immigrants from India and the USSR.

During the ’90s while still fighting memories of Three Mile Island, the power industry was not considered a cool place to work, and hiring stagnated. Recruiting firms were engaged to search within the industry for experienced power professionals and to probe alternative sources for additional hires, such as propulsion and nuclear specialists processing out of the Navy.

Back to the present, power employers are experiencing early waves of cascading retirements. As a result, human resources and organization development teams are creating massive training programs for new hires. The operational side effect of adding rookies all at once is twofold.

It dilutes tribal knowledge and unintentionally dumbs down the organization’s experience. The company culture and work ethic also risks becoming that of the latest generation: W, X, Y or whatever.

Balanced Hiring Approach is Better

Diverse organizations are stronger. To get one, employers need a strategy to build departments made of ranging experience levels. Ways to ensure a healthy organizational structure with good succession include:

1) When selecting trainees, compete for smart, qualified people instead of warm bodies.

2) Source talented junior professionals with cross-transferrable skills who have already been through recognized corporate training programs in other industries, such as automotive, aerospace or hospitality.

3) Compete within your industry for the best talent so you don’t lose employment market share. Employers must hire more experienced workers than they lose within their industry.

4) Attract fresh blood outside of power when hiring strategic managers and executives. Target forward-thinking industries so your management isn’t reduced to a bunch of old cronies.

5) Selectively use contractors and retired executives, including your own on a leased-back basis.

6) Use a professional recruiting firm selectively to find and land critical talent in any of the previous categories. A recruiter can watch for people confidentially interviewing who are snapped up before they make it to the job boards.

The economic downturn might have slowed hiring and delayed some retirements as senior workers stay on to recoup losses in their retirement funds. But soon, senior workers will be gone, and with them goes great human capital. Companies that understand organizations are not just about headcount and that act proactively will be ahead of the rest.



Doug Eilertson is an executive search consultant at Sanford Rose Associates in Akron, Ohio. He has a degree in marketing with emphasis on international business from The Ohio State University. Prior to his recruiting career, he was employed by Honeywell, Fluor, Hydraulic and Air Controls and Westinghouse. Reach Eilertson at 330-762-6212 or douge@sraoc.com.

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