Ken Silverstein EnergyBiz Insider Editor-in-Chief

Without a doubt, the free enterprise system is designed to fill voids in the market. So, if job shortages exist, then businesses and schools combine to meet that need. The central issue at utilities is that the attrition rate has exceeded the rate at which people are getting educated and coming into the ranks -- all compounded by the fact that some schools have discontinued their programs to educate students for a lifetime in the utility sector. The potential job shortages will get filled. The real question is how quickly the industry and the supporting academic institutions can ramp up to meet pending needs.

In the case of PSE&G, it is mostly training workers for entry level and technical jobs such as plant operators, engineering technicians and substation mechanics. They get both classroom and on-the-job training. The students must pass tests as well, all to equip them to hit the ground running. In the end, the goal is to imbue the potential hires with the hard working and public-oriented values that dominate the utility.

"It's a program similar to the farm league system in professional baseball," says Dana Berkheimer, director of talent management at PSE&G, at a conference sponsored by Marcus Evans Ltd in Jacksonville, Fla. "We've established a commitment to education."

According to a study performed by Sierra Energy Group, a division of Energy Central, about 57 percent of all utilities have a strategy in place for managing the impeding shortage of qualified workers. That's considered small, given the fact that the positions that will experience the most retirements during the next five years are also those that will be difficult to replace -- jobs that range from line workers to system operators to engineers. It's compounded by the fact that over the last 15 years, colleges and universities reported a 50 percent drop in the numbers of graduating engineers.

Core Businesses

Altogether, the U.S. Department of Labor says that at least 30 percent of the existing workforce will be eligible for retirement in five years. By 2012, it says that the utility sector will see 10,000 job shortages. It will be a challenge to fill these positions, says Brad Kamph, executive vice president for Santa Ana, Calif.-based Interliance. That's because utilities are tactically organized and focused on job functions -- not on soft issues such as worker training and knowledge transfer. Employees should be given much more latitude to learn a wider spectrum of duties within their utilities.

"You may be transferring knowledge and skills, but the real issue is to prioritize and transfer the right knowledge and skills," says Kamph. The first steps: identify the key skill sets needed for each job and then determine where the aging workforce dynamic will hit hardest. Then the organization must prioritize and implement strategies to meet business and operational needs for both the short and long terms.

Take the Lower Colorado River Authority: About half of the 56 employees at its Fayette Power Project near Austin, Texas are 50-55 years old. Its on-site supervisor went through a skill sets analysis and a subsequent implementation exercise. At that point, the manager there was able to win approval from her superiors to hire an additional 16 operators and put them through a training program. Many of the jobs were in control systems tied to gas desulphurization units.

To be sure, most utilities are focused on their core businesses. As such, the belt tightening that began in 2001 has yet to abate. Much of the recruitment is therefore taking place as a result of crises and not well-considered growth strategies.

Utilities, of course, are trying to balance competing interests, namely the demands of credit rating agencies to reduce debt and to get their financial houses in order with the need to focus on growth and customer satisfaction. Wall Street wants sound business plans that produce healthy gains for stocks while state and federal regulators require added investment in reliability. In either case, though, it takes people to make it happen but the extra costs weigh heavily on the decision-making process.

New Opportunities

The utility industry is said to be rife with opportunities, with everything from engineering, financial and skilled trade positions potentially open. The push to create larger regional grids, for example, means more traders with an understanding in short-and-long term contracts are necessary. Meantime, the aging workforce may also be a boon for the building and construction industry. Certainly, the push for next generation power plants is getting stronger, necessitating more skilled workers.

The industry must be proactive. Brian Hartz, vice president of business development for Day & Zimmermann NPS in Lancaster, Pa., says that it is the combined responsibility of contractors, owners, labor and educational institutions to ensure the pipeline does not run dry. His company employs more than 5,000 craft workers during the height of the outage seasons. With the onset of new construction, the competition for outage workers will be more intense, he says.

"A major concern of the industry should be the impact that new construction and the aging workforce will have on the operations, maintenance and outage support for our nation's fleet of 103 operating nuclear units and 760,000 plus megawatts of fossil-fired generation," says Hartz. "The union building trades have started a number of initiatives to combat this problem, but the concern is still very real."

While utilities are busily getting their financial houses in order, they cannot lose sight of the fact that there are ongoing concerns. Investments in current and future employees pay off by increasing loyalty and providing the talent to organizations to meet their ever-changing needs. The marketplace must eventually respond to impending labor shortages. But a seamless transfer of knowledge to the next generation is not guaranteed.

For far more extensive news on the energy/power visit:  http://www.energycentral.com .

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