Five issues that keep HR managers in the power industry awake at night--and what to do about them.

• Author: O'Donnell, Arthur J.
• Position: Reprint

That electric utilities throughout the U.S. face formidable workforce challenges in the next five years is well documented. While the scope of those challenges will vary widely from system to system within the different segments of the industry, there are insights to be gained from the experiences of managers across the spectrum--cooperatives, IOUs and municipal utilities. The following article offers a look at the unique aspects of some common issues.

Imagine waking up in the middle of the night, haunted by a single thought: "I have to replace half my workforce in the next five years!" Worse yet, any day now you expect your training and development budget to be sliced with little hope of an increase in the future. Add to that the potential for a hiring freeze to be imposed by management and yet another notice of ever-increasing costs for providing healthcare and other benefits for your existing workforce and soon-to-be retirees. It's going to be another long, sleepless night.

Welcome to the waking nightmare of many human resources professionals in the energy and utilities business. You can take some small comfort that colleagues at companies throughout the nation are facing the same problems, and that many are taking positive, proactive steps to avert a crisis. Many are even turning these challenges into opportunities that will help redefine their organizations.

1. Many Retirements and Few Replacements

   It's not news that the American workforce is aging, but the problem is especially acute among utility employees. According to the "Aging Workforce Report" recently conducted by UTC Research, the median age for workers in the utilities sector is 3.3 years higher than the national average. "We expect to be losing a significant number of employees," says Angie Robinson, Human Resources manager for the Sacramento Municipal Utility District. "Over the next five to ten years, about 50 percent of our 2,000 employees will be eligible for retirement."

   The average utility employee is 48 to 49 years old with 20 years of service, says Russ Jackson, senior vice president of human resources for Pacific Gas & Electric. The utility has been monitoring the aging workforce issue for four years. "The future is coming rapidly," he says.

   The last major growth spurt by electric utilities occurred in the 1960s and 1970s, when electric generation and transmission construction reached a plateau, accompanied by hiring at all levels, especially among engineers and power system specialists. Now, three or four decades later, that cohort of professionals is getting ready to retire and companies are discovering that there are fewer candidates willing or able to take their place.

   "Think of it as a pipeline," says Jack Haugh, a technical leader for Human Performance Technology at the Electric Power Research Institute. "There has to be a vehicle by which you recruit your new talent. Many schools no longer have power engineering as an option or part of the curriculum."

   Mike Devaney, a professor of electrical and computer engineering at the University of Missouri's Columbia campus, sees a couple of reasons for the downward trend. "It's a shift in emphasis, he says. "Students are lured to more glamorous areas, like computers, computer networks, and telecommunications. We'll get four students in computing to three in electrical engineering."

   Engineering schools are experiencing a brain drain of their own, Devaney notes, with many professors who have specialized in power systems engineering looking at retiring in the near future. "As the traditional power faculty diminishes, the depth of course offerings declines. I think we're going to have a major shortage in this area in the future," he says.

   A third troubling trend is that utilities and energy companies have pulled back from offering internships and apprentice programs. Even summer jobs for engineering students are more difficult to come by.

   Solutions:

   The issues related to an aging workforce are complex and diverse, and companies are responding with a wide variety of programs. Some are looking at incentives to keep their key people at work past the age when they might expect to retire. Others want to make it easier for the older generation to move on, through voluntary severance programs, thus freeing up positions and making room for younger workers to advance.

   One of...