New developments in IT, outsourcing, customer information systems, and customer relationship management are challenging long held notions about utilities’ essential operations.
After EPACT: A Mad, Mad Scramble for Talent
The Energy Policy Act of 2005 makes human resource challenges even more significant.
Our review indicates that HR and technical trainers lack strategic know-how. Time and again we find that theses organizations have a detailed understanding of the demographics, but lack the insight necessary to position their respective companies for the future. For the most part, they envision recruiting in a very reactive manner. Most fail to understand the future needs of the industry and have done little to secure the skills of mid-level, mission-critical personnel who will be vital in meeting their business objectives.
Recruiting and retaining key personnel will be essential if a company is to survive. The new energy bill will introduce a myriad of new start-up opportunities that may be very attractive to individuals eligible to retire, as well as to mid-career personnel. In the past, a key retention item was defined pensions. In today’s world, with the portable nature of one’s 401(k), employees are much more mobile in their thinking.
HR organization survival will require some very unconventional approaches. The HR organizations will need to become less reactive and much more proactive. To fulfill such a mission, they will need to better understand the requirements embedded in the energy bill and have a detailed understanding of corporate strategic objectives for the next 4 to 5 years. The work processes, training systems, reward structure, and HR culture, all will need to be revamped to best manage both the opportunities and the challenges at hand.
We project that the executive leadership and management-level salaries will escalate significantly as the industry competes for the limited talent that will be available. Tomorrow’s leaders will need to learn how to manage from afar as the industry consolidates across social and regional boundaries.
To preclude the financial disasters that so defined the Enron era, tomorrow’s leaders will need to be well schooled in the nuances of the energy markets. Regional transmission entity leadership will need to do more to hold on to their talent as independent transmission companies form and the volatile world of proprietary energy trading re-emerges. Degreed dispatchers will become the norm as control areas wrestle with the difficult task of managing in real time across vast regional boundaries.
It used to be information technology was all about billing systems and financials. Tomorrow it will be about advanced competitive market models and very complex electric grid contingency analysis.
Utility executives will need to come to terms with the reality that FERC Orders 888, 889, and 2000, in combination with the Energy Policy Act of 2005, will redefine every aspect of the utility industry. The old cliché that “our most important asset is our people” quickly will come home to roost. HR will rise to the top of the priority list as companies struggle to advance their business objectives with half the staff and 40 percent of today’s expertise. Those companies that survive will be those who started to address these critical issues two years ago. Throwing money at the problem will not get a company to the finish line. Instead, it will be all about building an integrated strategy that is flexible and