An essential ingredient in the success of any business endeavor is thorough planning. We've all heard the axiom "proper prior planning prevents poor performance" or a variation on that theme. Why the need for peak performance? Competition within the industry has never been as intense, with utilities combining in search of economies of scale. The need for competitiveness aside, there's a fundamental truth in our business that should figure prominently in the planning of every power generator—regardless of size or region: Your plants and people are getting older by the day.
Rocking in the dark?
The energy utility sector is seriously threatened by a serious manpower shortage expected as soon as the end of this decade. The Philadelphia-based consulting firm Hay Group recently projected in a report that 40% of senior electrical engineers and 43% of shift supervisors working for natural gas and electric utility companies will be eligible for retirement by 2009. Yet more than two-thirds of firms surveyed have no succession plan for supervisors, and 44% have no plan for vice-presidents.
"The electric and gas industries could easily collapse if they don't put a plan in place for staffing, retention, recruitment, and training," said Mike Brown, senior consultant and utilities sector leader for Hay Group. "We need to seriously question if we will be able to keep the lights on in the next 10 years."
The Hay Group report also predicts that 40% to 50% of all utility employees will be retiring in the next three to four years. If that proves true, the timing couldn't be worse, given America's urgent need to expand and upgrade its utility infrastructure of pipelines, power plants, transmission lines, and other facilities. Completing the double whammy is the report's finding that fewer young people are choosing energy as a career, because deregulation, downsizing, and consolidation have tarnished the industry's traditional reputation for job security. Engineers and techs have options, and they're voting with their feet.
Baby Boomers are now handing the reins to Generation X, along with the opportunity to move into the executive ranks. But manpower shortages exist at both the entry and executive levels. Apropos of that, Brown noted that "Utilities have invested historically next to nothing in their officers." For that reason, he explained, "People are reluctant to take managerial positions. They don't need the grief, and they don't need to make any more money."
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