What to Do When 50 Percent of Workforce Vanishes?

Bye-bye Baby Boomers. Will the last experienced person in the energy industry please turn the lights out when you leave?

From a human capital standpoint, the state of the energy industry is not good:

According to the United States Department of Labor, the energy utility industry averages the second-highest average employee age among 54 industries studied. Nearly one-fifth (19.2 percent) of industry workers are within five to seven years of retirement.
The energy utility industry is facing another kind of power crisis: a manpower crisis, that is. Manpower (and womanpower) just isn't the renewable resource it once was. Much of the industry's workforce is nearing retirement age. Unfortunately, over the years, little effort has been made to attract young, fresh talent to replace them.
This is more than a decrease in head count, it is a loss of know-how. The industry is at risk of losing crucial intellectual capital.

Ten years ago, McKinsey & Co. declared that better employee talent is worth fighting for, and the news quickly spread from the boardroom bunkers to the cubicle trenches. The reason for the coming talent wars was demographics and the retirement of the Baby Boom generation. The battle cry was to not only improve hiring practices, but to work harder to retain your best employees.

This prediction has come true with a vengeance, particularly in the power industry. There have been challenges in the past few years with recruiting young college graduates due to a perception that the energy industry is arcane, slow to adopt technologies and limited in growth opportunities. The failure to recruit new talent is clearly seen in the fact that the average age of the workers in the industry has been rising -- since 1995, the number of workers aged 55 and older has increased by 225 percent.

Here are five recommendations to tackle the brain drain issues.

During the past decades, companies have proven that you can't win the talent wars just by spending more. When it comes to finding and keeping employees, pay is secondary for top talent. But if a company builds up an outstanding reputation, people will line up to work at that organization. For the energy utility industry, this will involve a degree of investment in branding efforts and workplace changes that will appeal to the younger Generation Y.
One of the most important issues for reputation will be to promote environmental responsibility and the technological advances being made by the energy utility to provide cleaner energy. The 2008 Adecco USA Workplace Insight survey found that 69 percent of Generation Y wanted the company they worked for to be more environmentally conscious. That demographic was even willing to sacrifice, on average, 6.2 percent of their salary to work for an environmentally friendly company -- more than double the amount any other generation of workers would be willing to give up. This is clearly an issue that would motivate top young talent since they would be eager to work for an industry that could make a significant environmental contribution. An equally significant issue is the transfer of knowledge from the seasoned industry professionals to new employees. It is crucial that the mentoring relationships be managed properly so that both sides will feel comfortable and work together effectively.
The big question is how to we get individuals who know technical operations, equipment and field needs to share the "tribal knowledge" that they have acquired over decades of being on the job? One way is to help them to understand how to mentor and coach the new hires. For example, companies can offer incentives that can supplement their retirement incomes in exchange for coaching the newbies. A train-the-trainer program is an essential first step so they can properly transfer some of that valuable information in their heads. Since effective mentoring and cooperation is so crucial to the impending transfer of knowledge, personality assessments will be vital in matching the right workers to the right tasks and team members.
In my soon-to-be-published book Cracking the Personality Code, I discuss how using an in-depth work style and personality assessment during the hiring process and for current staff allows the employer to manage more effectively. This data can reduce the learning curve for the influx of new hires necessary in the energy industry.
In addition, personality assessments are vital in building mentoring partnerships and teams that will be productive and run smoothly. By understanding how different members of the team work, managers can help guide them to appreciate each other's strengths and weaknesses. Since so much of the industry-specific knowledge for the energy utility industry is in the minds of the impending retirees, organizations must act quickly to effectively capture it.

Overall, managers need to realize that attracting talent, retention and training of employees are interconnected issues that must be considered in tandem with each other. To alleviate this industry problem, action must be taken by the industry as a whole to change the way they are perceived. An advisory board on hiring and retention would help the energy utilities share strategies and information that will stave off this personnel crisis.

"What is not working is the poaching of talent," says Arnie Winkler, Director of Education & Training for the Northwest Public Power Association. "Ultimately, somebody is going to lose. We need to be creative working on the supply side of the issue, not the demand side. There is a need for a summit around this issue. Public power is trying to attract the best and the brightest, at the same time other industries are attempting to do the same. This is especially true for public power in rural America. Now is the time to shift our intentions to creating an abundant workforce, rather than focusing on scarcity."

This means working within the Industry, local schools, community colleges and universities. CEWD and industry organizations are currently working at developing support materials for the Electric Utility Industry. There is a need for the national and regional public power organization to convene and discuss local, regional and national strategies.

The energy utility industry must stop merely grumbling over the dismal statistics and take decisive action. Collaboration in the power industry -- led by a national advisory committee on how to attract, hire and retain top talent in the 21st century -- will help ensure that action is taken quickly and efficiently. Time is of the essence and cooperation is the key to a thriving future for the industry. Now is the time to begin discussions on who should be on such a panel, what organizations should sponsor the effort, and how soon could the discussions begin.