The Utility Industry Finds Itself in the Middle of a Major Workforce Transition

Jan 24, 2018 | Utility Trends


The Utility Industry is experiencing a large shift in employment as many of today’s utility employees will soon be eligible for retirement. This imminent talent gap is further exacerbated by a lack of qualified talent to fill these positions as well as a need for utilities to adapt to changing technology. According to the US Bureau of Labor Statistics, the Utility Industry employees approximately 1,345,000 individuals in the US. Of those individuals, approximately 636,000 (27%) are at or nearing retirement1. As is evident by these numbers, utility employees tend to be “lifers.” Meaning, the industry as a whole has historically had a low turnover rate and as such, many current employees have been there 20+ years and gained 20+ years of experience.  This tendency for employees to maintain long term employment, while beneficial in some manner to the utility, has caused the industry to be ill-prepared for this shift in employment. Many utilities now find themselves unprepared to recruit qualified employees and unable to effectively offer the necessary training for new employees. Simply put, utilities have little to no experience with looking for and training new employees.

Due to a shift in population trends and newer generations’ desire for different types of career opportunities, there is no potential to fully replace the current utility workforce as individuals retire. As a whole, there are fewer skilled workers in the workforce with some estimates pointing out a 50% decrease in graduating engineers in the last 15 years. In addition, newer generations bring a different perspective to the workplace. They have a different set of expectations and values as well as the tendency to be more tech-oriented.  Many young individuals just don’t see utilities as a place to build a career. Newer generations are looking for challenging, forward-thinking work environments and aren’t afraid to quickly change places of employment.


In order to adequately address the issues caused by an aging workforce, utilities need to look for alternative solutions to many of their current issues. Are there more efficient ways to accomplish tasks that may result in a need for fewer employees? View this as an opportunity to evaluate what you’re currently doing and determine what is the most cost, time and labor efficient. Look to implement talent management strategies and build active succession plans. Look to hire replacements long before highly skilled employees depart. Explore the idea of manual process reduction and embrace the ideas of automation and the reduction in labor associated with solutions that automate daily tasks like Automated Meter Reading or an interactive Customer Web Portal.

Utilities can also look at partnering with local schools and organizations to educate newer generations on the exciting opportunities working at a utility brings. Build strong programs locally and work on showcasing sustainability. The newer generation is no longer driven purely by profit. They seek to work for organizations that display environmental consciousness and seek to have a greater purpose in their positions. Embracing technological advancements can also help to keep these employees engaged and excited about their positions.


If the idea of an almost irreplaceable workforce doesn’t scare utilities enough, they also have to face the loss of knowledge associated with the departure of tenured employees as well as a need to keep up with and adapt to ever-evolving technology. Utility workforce retirement not only equates to a loss of labor but also to a loss of critical knowledge. For years, the same individuals have been doing the same jobs in the same exact manner. Utilities are notorious for not documenting exact job functionality and steps for problem-solving of daily issues. On the job training has traditionally been performed via word-of-mouth and on-the-job interactions with tenured employees. Even so, it is impossible for a seasoned utility worker to efficiently and effectively communicate with a new employee how they successfully manage every aspect of their job. Much of the knowledge and skill needed to effectively manage the utility is stored in the heads and hands of the aging utility workforce and only passed down to newer employees when specific situations arise. Because of these nuances, utilities may have to take multiple shots at replacing a single employee or even replace one employee with several employees. The traditional word-of-mouth training methods utilized by utilities are no longer viable.


It would be almost impossible to fully address the issue of knowledge loss. That being said, steps can be taken to set utilities up to educate and train the next generation and reduce risks associated with the loss of knowledge and skill. Utilities need to focus on documenting and outlining processes. Put initiatives in place to have employees document daily tasks and the rationale behind their solutions. Implement a program of rotation and cross-functional assignments so that employees can be trained and knowledgeable in a variety of areas within the utility in order to help reduce the knowledge loss created by a single employee. Work on making a list of jobs that are critical to the functionality of your operation and the skills needed for those positions. Prioritize succession plans based on when workers plan to retire and implement training plans accordingly. Develop knowledge sharing programs and partner with neighboring utilities to share knowledge and train new hires.

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