the aging workforce challenge

Keith Michaelson and Leslie Rittenhouse

How do we prevent decades of supervisory experience from simply walking out the door? How do we choose our next generation of supervisors from within our workforce? And how do we prepare people to make a rapid and successful transition to the supervisory role?

Like many electric utilities, American Electric Power (AEP) is at risk of losing to retirement many of its most experienced supervisors. The median retirement age at the company is 58.5, and with 10 years of service, retirement is an option at age 55. In early 2005, the stark facts in one of the company’s seven regional utility units, AEP Ohio, reflected the situation throughout the business: In Electric Distribution more than 50 percent of the exempt supervisors of distribution systems and 38 percent of the non-exempt line crew supervisors were eligible to retire. In the meter reading function, the number stood at 37 percent.

Aging workforce issues are not new. AEP’s human resource function has been well aware of the numbers and the related business risks. But progress on strategic issues at the utility unit level requires a planned and proactive approach, and in a high-pressure, transactional environment, tackling the big issues has a cost. The immediate job must be done-responding to personnel issues, implementing affirmative action plans, tracking down the lost paycheck-or one can quickly fall far behind. As a result, supervisory development had continued along in the traditional way. Exposure to leadership training and experience was available only after promotion to the supervisory ranks was offered and accepted. In the best case, there was then a slow and difficult training and ramp-up period; in the worst case, the new supervisor was not right for the job and the organization lived with the mistake for years to come.

In October 2004, the AEP Ohio leadership team identified the aging workforce as one of its critical strategic priorities and asked HR to bring together a team to tackle the issue. The team, which included representatives from electric distribution, meter revenue, corporate communications and HR, was required to make visible progress within 100 days.

the supervisory success plan

The team agreed that the central issue came down to knowledge management. The company had no process for transferring decades of experience to the next generation of leaders. Leadership experience was walking out the door, and people were being promoted into supervisory jobs before they were ready. But how could the team make progress on this issue in the next 100 days? As they struggled to find a direction, the turning point came with the concept of a “success plan.” Rather than wait for positions to open up at supervisory levels, they would give people exposure to knowledge and experience by turning the supervisors eligible for retirement into mentors.

Because this new concept would be developed from the ground up, they decided to put clear boundaries around their work. They would start in two of the company’s seven distribution districts and focus on a few selected service centers. The specific goal was to have six line mechanics in the Canton and Chillicothe districts actively engaged in the new success plan program within 100 days. This goal implied a major undertaking for the team that included defining the content of the success plan, selecting the service centers to work with, getting the buy-in of mentors and participants, and getting the development process under way. Meanwhile, the daily work couldn’t stop. The same group of mentors and participants had to fit the success plan into their already hectic daily schedules.

skeptics express doubts

Early discussions at various levels of the organization provoked a lively debate. Many people were excited by the team’s ideas and goal; others were skeptical.

According to the skeptics, there were clear reasons the line mechanics would never agree to participate:

“- Line mechanics don’t want to face the peer pressure around being promoted; they’ll worry about being teased and no longer being one of the guys.

“- They worry that once they move up to a supervisory position, they lose the security of a union job; when layoffs come, they’ll be the first to go.

“- The line mechanics assume that the promotion belongs to the guy with the most seniority and they won’t want to buck the system.

“- Taking the supervisory job means losing overtime; no one will take the pay cut.

As far as the primary reason supervisors wouldn’t participate, skeptics said the supervisors already were under pressure to get the daily work done, that there wasn’t time for an exercise that took time away from completing the schedule. The team listened to all the comments, but made no judgments. They would have to test these objections.

shaping the approach

The first step was to do a quick survey. The team decided to ask all supervisors, close to 75 in total, in their two pilot districts to think back to what they went through when they first took the job. What was the transition like? What were the toughest challenges? What would they have liked to have known before they took on the new level of responsibility? To everyone’s surprise, the survey response rate was huge: 89 percent of the supervisors responded and many wrote detailed descriptions of their early experiences and how they felt the transition process could be improved. The idea around which there was the biggest consensus was that each aspiring supervisor had to have the help of a mentor.

Based on the survey results, the team developed a first draft of the success plan. This consisted of a list of skills and experiences to be acquired, the mode of delivery, and the group or individual who would be responsible for the delivery. Interviewing skills, for example, would be taught during the hiring process by the local HR representative, and the grievance process would be taught through a two-hour discussion with the labor relations manager. Some of the same supervisors who were asked to complete the initial survey were also asked for input on the plan’s creation. A success plan template would be used to track activity on the competencies, and a selected mentor had overall responsibility to ensure that progress was being made.

The Canton and Chillicothe districts were chosen as start-up locations because there was a significant aging workforce issue to be addressed and a supportive group of supervisors who would buy into the program.

tapping an unexpected demand

To reach their goal of establishing success plans for six line mechanics, the initial idea was to offer the program to senior line mechanic “A”s, who were viewed as having supervisory potential. The team wanted to test how much resistance would really emerge to the idea of preparing, in advance, for promotion. When the team went to the local Canton service garages to explain the program, almost everyone, 27 out of the 30 line mechanics at all experience levels, wanted to participate. In fact, it was a few of the most senior mechanics who opted out, paving the way for others to take the initiative. Because they still wanted the first phase to be a manageable pilot, and they were not clear on how they would handle the unexpected level of demand, the team committed to enroll only one line mechanic in each of the district’s five garages. The promise was made to enroll more people after the 100-day period was complete. Similar commitments were made in the Chillicothe district.

It was made clear to everyone that signing up didn’t mean they were going to be promoted; it simply meant they would be prepared when a position became available. This would have two important benefits for the business. First, there would be much greater bench strength as leadership and managerial skills were shared with the workforce; and second, there would be time to evaluate an individual’s ability to absorb the new experiences and thus improve decision-making around promotions.

100-day implementation

During the 100-day period, the team coordinated the development of the specific success plans for the selected mechanics, identified mentors and helped ensure that the participants were making tangible progress. They also provided one-on-one support to participants.

The success plan’s structure and the deadlines for completion meant that developmental opportunities for the mechanics could not be overlooked, as had often happened in the past. One mechanic sat in on interviews of candidates and then debriefed the experience with the interviewing supervisor; another had the opportunity to participate in a pre-assessment event for potential new hires. Other mechanics attended leadership classes previously attended only by existing supervisors. An important developmental experience that had often been overlooked was the opportunity to be “stepped up”-to take temporary leadership of a crew when the supervisor was not available. Using the success plan, supervisors could provide the opportunity for a mechanic to complete a developmental step while fulfilling an immediate staffing need.

Enthusiasm for the process continued to grow as people saw that real opportunities for growth were being provided. Mechanics were asking for more responsibility, and a number of them started coming in early to check what was going on during the day and how they could move their success plan ahead.

breaking the unwritten rules

One of the project’s most important results was that people started questioning long-held, limiting assumptions. Line mechanics did want the opportunity for career growth; long-time supervisors did want to make sure their experience contributed to the business success and customer satisfaction; and waiting until someone was promoted into the supervisory ranks to begin training wasn’t necessary.

The developmental experiences helped the participants understand what the supervisory role was all about. In some cases they concluded that the role wasn’t right for them, but this opting out was not seen as a bad thing. Just the opposite: It meant that the supervisory selection process would have a better outcome.

expanding the impact of the program

When the project’s results were reported, all five of the remaining districts asked to be involved. In the two pilot regions, the commitment was made to add additional participants.

What had started as an effort directed at knowledge management and the aging workforce had come to encompass a number of other critical HR issues. Although not the original intent, affirmative action efforts, for instance, were enhanced because a broader group of candidates could be put in position for promotion.

The bottom line for AEP Ohio is leadership bench strength. In the past, training and development for mechanics never extended beyond their technical skills. It is a fundamental mind-set shift to say, “We don’t have to wait, we can challenge our people to develop their leadership skills as well. And we can use an untapped developmental resource, our most experienced supervisors.”

Keith Michaelson is with Robert H. Schaffer & Associates. Contact Keith at kem@rhsa.com. Leslie Rittenhouse is a human resources manager at AEP in Columbus, Ohio. She can be reached at larittenhouse@aep.com.

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