In response, utility companies must learn how to adapt their operating models, and be prepared to adapt again at more frequent intervals; they also need to assess the skills and capabilities required to support and sustain the change. The challenge will be finding, attracting, growing, and retaining the skills in a digitalizing world competing for the same resources – for most computer and data scientists, working for a power or water utility is probably not high on their list of preferred employers. Utility companies will have to be innovative in developing talent models, building a workforce strategy that utilizes some or all of the four considerations below.
- Increase your appeal as an employer to attract new talent
Utility companies already struggle more than most to attract talent with the right skills and expertise. The UKCES Employer Skills Survey 2015 found that electricity, gas, and water companies had some of the highest rates of vacancies in skilled jobs, with 35 per cent of these roles vacant – over 50 per cent higher than the national average.
Becoming as appealing as possible as an employer requires an understanding of what tech-savvy, predominantly young people entering the workforce are looking for: Bright Network’s Research Report 2017/18 found that 36 per cent of graduates cited a good work-life balance as the primary indicator of career success, compared with 16 per cent who quoted earning a lot of money. So, it is not as simple as buying the right talent with bigger pay packets, which would likely be unsustainable for many regulated utilities in any case; it is more about the whole employee value proposition.
It is important to take an honest look at whether you can give new recruits what they want, and work out how to improve your offering and profile in the market. This doesn’t have to be ball pits and sleep pods in the office, but should include more flexible working, autonomy, and empowerment to make strides in what is an underdigitalized sector.
- Develop the talent you already have
It’s said that people are a company’s most important resource, so the existing workforce is a logical place to discover and develop the new skills now required. Fifty-nine per cent of energy respondents to the World Economic Forum’s Future of Jobs survey stated that investing in re-skilling current employees was their top priority for closing the skills gap.
To develop the talent from within, utility companies need to rethink learning and development approaches. First, identify the skills gap and career paths leading to critical jobs. Consider how to reduce the time it takes to bring individuals up to speed, using stretch goals, mentoring, and transferring of skills from those already in place. Second, deploy multichannel and digital learning techniques for existing employees, focusing on the technical, agile, and cognitive skills required to thrive in digitalization.
Re-skilling your current workforce may seem like a daunting task, but it can be done. For example, in 2013, US telecoms giant AT&T made a decision to modernise and digitalise its business, which meant thousands of roles were at risk. AT&T launched an initiative called Workforce 2020 to retrain 100,000 field engineers, technicians, and call centre operatives. According to the Harvard Business Review, by the middle of 2016, half of all AT&T’s technology management jobs were occupied by people who had been retrained and product development times had been cut by 40 per cent.
- Review your outsourcing options
In some cases, talent gaps can be filled by outsourcing. The demand for technological skills in the utilities market has led to the rise of new, often specialist, tech-centric companies focused on specific elements of the value chain. Similar to the role of oil-field service companies in the upstream oil and gas industry, these businesses step in to provide skills and services.
In the short term, outsourcing allows for flexibility and the ability to ramp up or down based on demand, or – in cases where you don’t have the economy of scale – to provide a high-quality, ongoing service. For the long-term, outsourcing requires a strategic decision on whether to ever build the capability in house or always rely on external partners. As a long-term solution for digital capabilities, outsourcing can be expensive and perhaps that money would be better invested in training the existing workforce. A comprehensive review on how to minimise contractor spending, forecast demand for it, and identify the best-quality agencies or third parties to work with will make the most effective use of this type of rented labor.
- Tap into innovation with crowdsourcing
A more recent version of outsourcing is crowdsourcing, and utilities should ask themselves what role it can play to bring in fresh ideas. For example, Danish utility Aarhus Water ran an open-source competition to crowdsource ideas to improve biogas production, energy efficiency, and carbon harvesting at one of its wastewater treatment plants. They received multiple responses from non-utility players and entrepreneurs, and the solutions they implemented improved the net energy consumption-generation ratio to 150 per cent, double the theoretical best of 75 per cent for the existing utility technologies on offer.
In exchange for scale, funding, and mentorship, crowdsourcing can allow other utility companies to tackle innovation from a new angle and keep pace with rapid changes in both technology and the market.
A final word
Increased digitalisation across all sectors is intensifying the competition for technology skills. By identifying early what they want their future workforce to look like, utility companies can develop a strategy to both build internal talent and source it externally from freelancers, partner organisations, and crowdsourcing – tapping into an emerging “utilitech” subsegment to fuel future sector growth. This will give a head start on shaping a strong workforce for the future.