Part 2: The smart-grid hiring conundrum
Attrition and Scarcity in the Utility Talent Pool
Part I: The Job Growth Quagmire outlined several driving factors behind the slower-than-expected job creation within the smart grid sector. While taxing, these obstacles are not insurmountable, and utilities need to be proactive in addressing the human capital challenges that lie ahead.
Utilities are going to be caught between a rock and a hard place in the very near future because their workforce challenges will be four-fold...a quadruple whammy, so to speak:
- Recent studies suggest that nearly half of the skilled technicians within the utility workforce will need to be replaced by 2015. Attributable to an aging workforce in addition to natural attrition, this mass exodus will pose significant roadblocks to smart grid deployment if a clear action plan is not put in place now. To add insult to injury, 50 percent of the engineering workforce as a whole will be eligible to retire by 2015, triggering a considerable contraction of the pool of eligible replacement candidates.
This is not a new challenge. Industry experts have been waving the red flag for almost a decade. While three years may seem a long way off for some, utilities should start strategizing now if they haven't already, to ensure they are not blindsided when retirement parties become a daily occurrence.
- Shortage of engineering candidates coming into the marketplace. While some utilities may be counting on replacing the old with the new, there is another complication looming in the shadows. In 2010, the National Center for Education Statistics reported that the number of engineers being delivered into the workforce via US colleges and universities had virtually stagnated at around 120,000 - hardly enough to stop the bleeding in the utility sector given that these new candidates will most likely be courted by a bevy of much "sexier" potential employers. And while other countries, such as India and China are churning out engineering graduates at almost 10 times the rate (roughly 1 million per year), is the utility market equipped (and/or willing) to jump through the Visa hoops to sponsor international hopefuls? The H1B visa program does offer utilities the opportunity to tap into this foreign human resource, and while the process may be somewhat laborious, it merits investigation and evaluation.
- There's one additional caveat that should also be considered in regard to the engineering shortage. There is a clear need for a "new breed" of engineer, one who is more of a generalist as opposed to a specialist in the field of engineering. In a 2011 study done by the GridWise Alliance and KEMA, researchers identified a need for engineers who have a global understanding of all components involved within the electric grid. To be successful in facilitating energy-efficiency improvement, utilities must recruit candidates with a grasp of power-system principles, smart grid applications, communication systems, cybersecurity issues and renewable generation. Identifying these candidates will be akin to finding a needle in the haystack in the short term as many educators have not had a chance to develop curriculum that meets these new requirements.
- Traditional utility skill sets are becoming obsolete. With the advent of AMI, smart meters, intelligent technology on the T&D side of the equation as well as emerging consumer initiatives such as demand response programs and variable pricing models, there is an undeniable gap in the skill set that currently resides within the utility sector. Meter readers, for example, no longer have a place in the smart grid. Customer service personnel, while still needed, will need to become more than a resource for consumers' billing questions. Retraining initiatives are paramount to the solution of this problem. Meter readers can be redeployed as meter technicians. Some members of the customer service team may have the aptitude to be groomed for sales, which is ultimately what this department's transformation should be. However, this needs to be a deliberate effort on a utility's part, and the time for change is clearly now.
- Emerging skill sets required by the modern grid have little to no representation in the utility industry. There is a new hybrid skill set required for effective smart grid deployment and maintenance. While I have already outlined the needs in the engineering arena, there are also evolving needs within the ranks of a utility's management team. GridWise does a great job of outlining these new requirements. It boils down to this: it will be critical for utilities to bolster their strategic evaluation and planning capabilities. Deregulation was most likely the impetus for the start of this transformation, but the introduction of competitive markets is just the tip of the iceberg. Early adopters of smart grid deployments have already figured this out, as they have been forced to fine-tune their business acumen to compete for stimulus funding. Moving forward however; managers in the utility sector must be groomed for two relatively new responsibilities: (a) skillful evaluation of smart grid technologies and their associated quality assurance processes (b) understanding the "millennial" workforce and related human-resource dynamics. It's going to take a unique savoir-faire to execute these new roles successfully that may not be accomplished via the retraining route. Technology vendors and industry consultants are the current keepers of the keys...so it make take some pilfering to bring these resources in house.
What's a utility to do?
While many utilities are outsourcing what they need from a talent standpoint right now, either to a technology vendor or consultant, this practice is not a sustainable model. Stimulus funding will eventually run dry, and additional rate increases will neither be allowed by regulatory bodies nor tolerated by consumers (commercial or residential).
While it may seem all gloom and doom, there are solutions to all of these challenges. Partnering with educational organizations, positioning utilities as a dynamic and opportunity-rich place to work as well as defining a new recruiting model that is capable of pinpointing candidates with the emerging qualifications that are now needed are all that will be explored in Part 3 of this series. However, strategy development must begin now, as many of these fixes will most likely be longer-term initiatives. Whether an internal employee or team within a utility becomes the champion of this cause, or an outside consultant is temporarily commissioned to spearhead the project, utilities cannot afford to drag their feet.