(July 2012) Southern Company announced changes in the company’s management team. Great Plains Energy and Kansas City Power & Light (KCP&L) appointed Scott...
By 2020, nearly half the workforce will be female and non-white. Are utilities ready?
Utilities, like other businesses, understand that-moral and ethical imperatives aside-a diverse workforce makes their businesses stronger. But at a recent transmission conference in Washington, D.C., the 50-or-so attendees were mostly male (two of the four women in the room were conference organizers), mostly white (two blacks and three or four Asians), and mostly older (half had gray hair).
The United States workforce population doesn't look much like that group (see Figure 1, p. 35). But by and large, utilities' workforces look more like that group than not. That doesn't bode well for the industry, which must find a way to tap into diverse segments of the labor force-or face an impending labor crisis.
Diversity and the Bottom Line
In today's business climate, few if any investor-owned utilities lack a diversity program. Diversity programs of one variety or another have been around for 20 years.
While such programs have often been dismissed as another flavor-of-the-month initiative, utilities are starting to see the real benefits to having diverse leaders and workforces.
Case in point: Renae Conley, president and CEO of Entergy Louisiana. She took the reins in mid-2000. At that time, J.D. Power and Associates ranked the company in the second or third quartile of all utilities in four out of five performance metrics: power quality and reliability, company image, price and value, billing and payment, and customer service. By July 2002, J.D. Power ranked Entergy Louisiana in the top quartile in four of the five categories.
While Conley is too modest to credit herself for these changes, she believes a diverse workforce helped the company improve. "I definitely believe we are a better company because of diversity, and all the different backgrounds we have in our company," she says.
In fact, all the utilities interviewed for this article emphasized the importance of building a workforce that reflected the racial and ethnic makeup of the communities they served. But diversity isn't just about increasing the number of women and minorities at a utility. According to Berlinda Fontenot-Jamerson, diversity manager at Sempra, "Diversity is managing human capital better." It's about understanding what best motivates different parts of the workforce, and about where to find the best recruits. Diversity is not exclusively about race and gender, she emphasizes. Doing diversity successfully means a company will get a better return on employees through increased innovation, creativity, and adaptability to changing circumstances, she says.
Yet business managers of all stripes are understandably reluctant to participate in corporate feel-good initiatives that don't help the company's bottom line, and utilities are no different. To achieve diversity, companies need to ensure that managers understand exactly how diversity impacts the bottom line.
Conley offers a concrete example: advertising effectiveness. When you think about ways to approach customers, she says, if you don't have people on your team that see the world through the eyes of your customers, with similar backgrounds to those customers, you can't communicate with them. Without diverse employees, "you're going to totally waste money in