Is the Aging Workforce a Good Thing?

There’s been a lot of concern over the Big Crew Change in the Power & Utility sectors over the past few years. The aging workforce is certainly an issue for Utilities as it is an industry that is dependent on specialized skilled workers and tends to be somewhat of a craft industry.

This aging workforce issue is a frequent discussion topic within the Microsoft Utilities Group. It certainly makes our list of market forces (see chart) shaping the future of Utilities: we see it as both a risk and a great opportunity for Utilities in the future.

In fact, AMR Researcher Tony Firisca recently sent out an e-newsletter titled “The Future Ain't What It Used To Be.” In it Mr. Firisca talks about how, with the Boomer retirements, we will only have a shortage of skilled IT professionals if we think in present terms. And by “present terms” I believe he means the continuing struggle to extract value from traditional systems, such as enterprise applications, for a model of work that may be retiring with the Baby Boomers.

To quote Mr. Firisca: “[Our current thinking in present terms] is a huge disconnect. Conditions are going to change, as are the way people are deployed, the way they interact, and the kinds of skills we need when we build tomorrow’s workforce.”

I think Firisca has a point.

There is great opportunity ahead for utilities. Sometimes I think we live too much in the past with business processes created, maintained and protected by the Boomers, the aging, on-its-way-out workforce. It’s human nature to cling to systems and processes that you have a vested interest in. It’s human nature to create walls for their defense. I do it. You do it. We all do it.

The real challenge may be twofold in capturing critical knowledge around some of these specialty business processes while at the same time being able to attract the best and the brightest that can help with the kinds of skills needed to take us from the past and position us with new ideas and processes to meet the challenges ahead of us.

We see many Power and Utility Companies making these adjustments. Good examples are with Constellation Energy and American Electric Power.

In the case of Constellation, they implemented a solution to increase their ability to manage their tariff/rate case processes. The specialized knowledge and processes for rate cases rests with a handful of individuals and it is extremely important to the financial bottom-line of a Utility. Constellation’s system not only helps provide a better outcome it also captures the specialized knowledge and processes for the future.

AEP is another good example in its project to enhance the way it measures and reports environmental compliance, including emissions and subsequently water and waste. Like the workforces of other Utilities, AEP’s plant engineers and environmental compliance personnel are reaching the age of retirement. Not only did the project yield common business practices, but the company was able to implement more precise and well-documented procedures for meeting certain regulatory requirements. This is especially helpful for those tasks that are not required to be completed every day, but only every two or three years. Then, too, as employees retire or change roles, a system that contains full documentation of compliance procedure eases the transition to new staff. 

In terms of attracting the best and brightest for the next generation workforce, I have had more than one conversation with Utility CEOs and CIOs concerning this opportunity.

One of the challenges they face is creating a work environment that attracts the best and brightest. In one of my recent conversations with a Utility CEO he mentioned the lack of investment his company has made in communication and collaboration technologies:

“We are talking to some really bright engineers and MBA students from top schools and these kids wake up using Facebook, instant messaging and web collaboration tools. They look at the work environment we offer and they often have second thoughts about joining us.”

For Power and Utility companies that are still operating with “stone knives and bear skins” (OK, which famous Star Trek episode is that line from?) many realize they have to change and are doing something about it by moving to a rich communication and collaboration environment.

During the past couple of years some of the largest Utilities in the world have upgraded their communications and collaboration environments to help position themselves for the change that lies ahead. To quote Tony Firisca: “Conditions are going to change, as are the way people are deployed, the way they interact, and the kinds of skills we need when we build tomorrow’s workforce.”

So maybe we worry too much about the departure of the aging workforce.  

Will we miss the aging Baby Boomers and lose some knowledge? Yes, most definitely!

Will there will be some problems associated with this? Yes.

Will there be a crisis, or is it more of a Y2K non-event? My bet is the latter.

The Utility industry has an opportunity to put some old thinking – pun unintended – behind it as the aging Baby Boomers move on. - Jon