A huge shift to renewable energy is creating a large number of new jobs in the utility sector. According to American Clean Power, the Inflation Reduction Act is expected to create 550,000 new jobs in industries producing renewable electricity. This will more than double the size of the cleantech sector workforce. At the same time, the labor market is tight and utilities face an increasing number of retirements, due to an older workforce. All of this is putting utilities on edge as they plan for the future.
Demetrius Sherrod, a Spokesperson for Southern Company, one of the nation’s largest gas and electric utilities, says competition is especially high for talent in certain roles such as technology, engineering, and skilled trades.
Jeremy Klingel, Senior Partner in West Monroe’s energy and utilities practice, expects the trend to continue for at least the next three to five years. “I don't believe we've hit a plateau yet, particularly in the transmission and distribution space, where skilled labor, as well as the engineering and design talent, continue to demand a premium.”
According to Julie Ryan, Managing Partner of Aether Advisors, an energy-focused consulting firm, “Utilities are going to have to do a better job of selling themselves to attract talent. “
10 tips to attract and retain labor in the utility industry
1. Look at the big picture.
“If you don’t have a big picture strategy,” says Ryan, “you’re always going to be playing catchup,” Ryan advises utilities to look at workforce needs for the next five years and identify gaps. A review of the strategic plan and capital budget will help identify key initiatives. “Map your workforce plan to your strategic plan.”
2. Make workforce planning a management initiative
While workforce planning needs to start at the top, the work needs to continue down to the department level. “Every manager of the company needs to own this,” says Ryan. “It's very hard for human resources to see all the pieces as clearly as the managers do.” She recommends each department have its own workforce strategy.
3. Use a risk management approach to prioritize projects
Ryan recommends using a risk management approach to prioritize and segment strategies. There are three lenses she uses to assess risk: criticality, vulnerability, and time.
The first view examines how critical a certain skill set is to the organization. A skill set that’s very important would get a higher ranking. The second view examines vulnerability. This examines how vulnerable an organization is to a specific person leaving. Assessing vulnerability means taking into account any specifics of those in the role now, how difficult the role is to fill, what bench strength the organization has, and what turnover is expected due to retirement or other factors. The final lens is time – how much time will it take to fill the role and train someone to get up to speed?
4. Showcase upward mobility and diversification in skilled labor positions
Skilled labor positions represent a big challenge for utilities because not enough young people are being drawn to these roles and several other industries are competing for skilled labor. “Demand very much outweighs supply,” says Klingel. He believes utilities are losing skilled labor to service providers in construction and construction management firms because they offer more money and greater upward mobility and diversity of work. “Utilities need to present opportunities for significant upward mobility, and maybe even upward diversification,” says Klingel. This is in contrast to the current situation where skilled labor may work in the same role for years where the only opportunity for advancement is to be a supervisor of the same type of work.
5. Broaden your criteria to attract more talent
Klingel believes that if the industry maintains strict criteria for skilled labor positions, they are going to fall short of meeting the demand that is being created by growth in the renewable energy sector. “What we're seeing now is, particularly in construction management and back office operations, a broadening of what the labor pool could and should look like,” says Klingel. He would like to see utilities, as well as those in renewable energy, capitalize on the positive interest in sustainability and decarbonization.
6. Build targeted strategies focused on diversity equity and inclusion
Southern Company has received multiple recognitions for leadership in diversity, including being named by DiversityInc as one of the "Top 50 Companies for Diversity” in 2023.
“We have a multi-pronged approach for attracting top, diverse talent,” says Sherrod. “It is targeted and purposeful.” In addition to leveraging relationships with organizations focused on underrepresented talent, they develop customized plans for each historically black college or university with the goal of becoming an employer of choice for their students and alumni. Recruitment efforts among military personnel are enhanced by relationships with military associations, organizations, federal and state agencies, and military bases.
“A robust intern and co-op program helps build strong campus relationships, through alignment of recruiting efforts and minority enrichment programs,” adds Sherrod.
Southern Company uses LinkedIn and other targeted social media campaigns to develop talent pipelines, working with employee resource groups and business units.
7. Reduce bias in the hiring process
According to Sherrod, Southern Company has taken several steps to reduce bias in the hiring process and become a more diverse workplace. First, their intake process was enhanced to more effectively post the position and source a diverse group of candidates. They also redact resumes to remove any personal and identifying information before conducting an initial resume review and screening. Candidate pools are also evaluated during the selection process, and Talent Acquisition and hiring managers will determine if options exist to improve diversity among the pool of applicants.
8. Engage with students
Engaging with K-12 students has been an intentional effort across Southern Company. “The goal is to create awareness around our industry and our jobs,” says Sherrod. “In addition, we highlight STEM studies/curriculum and show how they align with the jobs we have to offer.”
For older students, Southern Company offers a variety of internships. “Providing meaningful work experiences that compliment classroom studies is invaluable,” says Sherrod.
9. Take action on employee feedback
One of the ways that Southern Company maintains its position as a top place to work, is by gathering feedback from employees and taking action. Employee surveys are used to learn more about employee engagement and the overall employee experience. Listening campaigns could include surveys, focus groups, or outreach to Employee Resource Groups. “It’s critical to go beyond administering the survey and communicating the findings,” says Sherrod. “Establish a plan to take action based on the questions asked, even before administering the survey.”
10. Build partnerships with contractors
Much of the work to transition to renewable energy will be done by contractors, who will also be in high demand. According to Klingel, utilities will need to decide how they want to utilize their top service providers. “Do you want them to focus completely on storm duty or major construction projects? How will you balance when you need them for emergency restoration service?” asks Klingel. He believes the industry would benefit from taking a partnership approach, rather than a traditional vendor relationship. Contractors who perform well and have a great safety record might be rewarded with a guaranteed level of service.
The utility industry is at a critical juncture when it comes to recruiting and retaining talent not only to support the transition to renewable energy but also to build and maintain infrastructure for clean water, natural gas, and telecommunications. Implementing these labor tips can help ensure you have the right people in place five years from now.
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