November 30, 2005—According to a new study by Hay Group, a global organizational and human resources consulting firm, a substantial number of mission-critical employees in the utilities industry from the executive suite down to the lineman are rapidly approaching retirement age in the next four years.
The likely retirees are in key roles including management, senior engineers, operations, nuclear operators, gas transmission specialists, and control supervisors. The Hay Group Utilities study found that on average these employees are older than their counterparts in other industries and represent approximately 50% to 60% of the industry’s knowledge assets.
According to the Hay Group study, 40% of senior electrical engineers and 43% of shift supervisors will be eligible for retirement by 2009. The study also found that more than two-thirds of utility companies 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 ten years.”
This corporate crisis began in the tumultuous years of deregulation 15 years ago when utilities were in the business of merging and downsizing. Few utilities achieved the anticipated gains from the mergers and staffs were cut across the board.
Recently, crises such as the blackout of August 2003, power failures in the Gulf Coast and ongoing post-9/11 security concerns underscore inherent weaknesses in the nation’s electric power system. The Hay Group study found an intense need for power engineers as well as for a broad range of other utility personnel in the coming years.
The study also found that this issue goes way beyond human resources issues of retirement, recruitment, and retention and needs a comprehensive approach that includes academia. The utility industry’s staffing problems start at the undergraduate level.
For more information, visit the Hay Group Web site.
