Steven Brown, editor-in-chief
Utility executives have been warned of the dangers posed by aging utility equipment so much that it has begun to sound old hat. Conference speakers and industry trade journal editorialists have spent much of the last half-decade or so pointing to 30-year-old equipment in substations and rights-of-way as potential sources of misery for utility customers and utility customer service departments alike.
Certainly, aging equipment and a lack of spending on infrastructure maintenance and replacement has been, and continues to be, an issue. But there is another aging utility resource that, for a variety of reasons, may pose a more imminent danger-and one potentially more difficult to solve than that of aging equipment. That resource is people.
Writing, and then re-reading, that last sentence makes me cringe like Charlton Heston in Soylent Green, but they call it “human resources” for a reason. Like just about any company you can imagine, a utility company’s most important resource-and, generally, it’s most difficult to replace-is its workforce. It’s also a resource that is demanding replacement as more and more workers reach retirement age.
The current issue (May/June 2005) of EL&P’s sister publication, Utility Automation & Engineering T&D, addresses this concern in an article titled, “Facing the Future: Preventing Knowledge Loss as More Utility Workers Reach Retirement.” In the article, author Wayne Bishop Jr. of Doble Engineering Company writes that:
“According to the Bureau of Labor Statistics, electric power industry workers are already older than the national average (the average utility employee is 43.7 years old), and the median age will continue to increase over the next 25 years. For utilities as a whole, more than 148,000 employees fall in the 55-to-64-year-old range, with another 26,000 employees over age 65. Even more significantly, approximately half of the “˜Baby Boomer’ group will reach retirement age in the next five years.”
Bishop goes on to cite a statistic from the National Rural Electric Cooperative Association that 61 percent of line superintendents are age 50 or older.
The aging workforce isn’t a problem specific to utility companies, but it is one that utilities need to be addressing. It’s also not a problem related only to linemen or engineers, which is the focus of the aforementioned article by Bishop. The loss of personnel and, most importantly, the loss of due to retirement knowledge is affecting utility workforces from linemen all the way up to management. In EL&P‘s September/October 2004 Industry Report on utility financial strength, we pointed out that the number of utility employees was at a four-year low in 2003, down nearly 70,000 employees from the pervious year. Through layoffs and retirement, the utility industry has lost a great deal of knowledge of late. How well that knowledge is being replaced likely differs widely from company to company. (A recent report from UTC Research notes that while 90 percent of utilities surveyed are aware of the risks associated with their aging workforces, just over half actually have programs in place to minimize the effects of lost experience.)
In his article in Utility Automation & Engineering T&D, Bishop makes an interesting point about “knowledge loss.” He points out that as growing numbers of utility workers reach retirement age, not only are utilities in danger of losing the “explicit knowledge” of those retiring workers-that is, the type of knowledge that can be gleaned from books and manuals-but also, and this is where the real crisis lies, their “tacit knowledge.” By tacit knowledge, Bishop is referring to the unwritten tricks of the trade that workers gain over the course of a career, the kinds of things that aren’t outlined in any policy manual. It’s more frequently, and very aptly, called “experience.”
This tacit knowledge, or experience, can’t be handed over the day Worker X accepts his gold watch and boxes up his personal belongings. It has to be relayed over a period of time. If a company doesn’t have a plan in place to transfer this “tacit knowledge,” it’s likely going to be lost or, at the very least, degraded to some extent.
In his article, Bishop points out a number of strategies a utility company can employ to mitigate “brain drain,” including partnering with universities, building relationships with other utilities, and encouraging younger workers to attend conferences and workshops that offer continuing education credits. The important point is that a strategy-whatever that strategy might be-needs to be in place. If you’re a utility exec reading this column, and you’re not sure how knowledge loss is being handled in your company, it might be worth it to sit down with HR and have them outline the plan for you.
When that 30-year-old piece of equipment in your downtown substation goes on the fritz, you want to be sure your 30-year-young O&M hire knows how to handle the problem.