Ageing workers, Brexit and lack of diversity – utilities’ skills shortage

With issues such as an ageing workforce, the political fallout from the UK’s planned withdrawal from the European Union and concerns over the number of school children taking an interest in utilities, the sector is facing a skills shortage. Utility Week examines these issues and explores what the industry can do to resolve them.

Among a myriad of challenges for bosses across the utilities sector, chief among them must be the concern that a skills shortage is rapidly approaching.

In its recent workforce renewal and skills strategy 2020 report, the Energy and Utilities Skills Partnership warned that 20 per cent of the sector’s workforce will retire within ten years meaning 221,000 new recruits need to be secured during the same period.

Tony Cocker, former chair of the partnership, said in the document that the sustainability of the sector’s workforce is “under pressure”.

He added: “We face an ageing workforce, intense competition for many of our core skills, growing complexity within roles, a rapidly changing technology environment, a need for more diversity of skills and the people who perform them, rising labour costs, and ongoing difficulties in attracting sufficient new and young people.”

The partnership’s report calls for “collective action” and for the industry to face up to the skills challenge.

Sharing Cocker’s concern about an ageing workforce is Lila Thompson, chief executive of British Water, who says the water sector is about to lose expertise as people enter retirement.

The UK’s water industry makes up a directly employed population of 127,000 and an indirectly employed population (through sub-contracts, ancillary activity and product delivery) of a further 86,200.

Thompson says: “We’ve got an aging workforce – one fifth is over 55 – in the next ten years we are going to lose skills and expertise

“Making sure knowledge and expertise is transferred to other employees, lots going on in schools and colleges around STEM. Lots of people in the water industry visit schools and colleges.

“There’s an initiative called Primary Institute of Engineers around getting primary school children engaged and informed about becoming an engineer.

“But I think there still needs to be a wider national campaign around water and how it’s delivered and understanding the process because once they understand the process, they will value it more and be more aware of how its delivered and be able to listen and be aware of balanced views around the water industry.”

Facing similar issues is the UK’s nuclear industry.

Nigel Hawkins, utilities analyst at Hardman and Co, points to the fact that the UK has not had a new reactor built since Sizewell in 1995.

Hawkins argues that those with top class nuclear skills in 1990 for example would have been at least 30 years old and will have likely moved on or be considering retirement soon.

“There is a whole generation of people who will have retired”, he adds.

Fears about an ageing workforce aside, there is also the political landscape which needs taking into consideration.

With the outcome of Brexit still facing massive uncertainty, industry voices have expressed their views on how it could potentially affect the sector’s workers.

Tom Greatrex is a former Labour shadow energy minister and current chief executive of the Nuclear Industry Association.

He says: “There is a requirement for a lot of people with skills needed around construction for all infrastructure that is going to be built in the next period.

“This will be impacted over whatever the future arrangements are for people coming from the EU into the UK when the UK is not in the EU. There are also nuclear specific skills where overall we have an issue which is shared by some other industries where the age profile of industry means there are a number of people who are nearing retirement and we need to obviously make sure we have got people coming through that are able to fill the roles that are already there.”

Earlier this year a call was issued at the SNS2019 conference, organised by the East of England Energy Group (EEEGR), for the industry to engage with its future workforce earlier.

The EEEGR believes “urgent action is needed” across the energy industry to work with younger students to secure the skills it needs.

It said that in offshore wind alone, the industry needs to treble its jobs total in the next decade.

Industry trade body RenewableUK says the country will need 27,000 highly skilled workers by 2030.

RenewableUK’s head of technical affairs, Rhys Jones, says the UK’s offshore wind industry is “prioritising investment in skills and training programmes” across the country, with a focus on coastal communities.

He adds: “As part of the offshore wind sector deal, the industry has set up a new body this summer, the Investment in Talent group, led by RenewableUK’s chief executive Hugh McNeal.

“This group is now devising ways to ensure that we attract a wide and diverse range of entrants into our sector.  Industry is working closely with colleges up and down the country to ensure courses are provided at every level, for our future wind turbine technicians, project managers and engineers.

“This represents a multi-billion pound economic opportunity for job creation embedded at the heart of the UK’s coastal communities.”

Yet while the problems are clear, what are the solutions to such diverse and complex issues?

Nick Ellins, chief executive at the Energy and Utilities Skills Partnership, uses the example of the smart meter rollout to highlight where the problems lie and what solutions can be used.

“If the pitch for smart metering is ‘well, this project will last until 2020’ –  you’ve effectively told everybody who has got a job in it when their redundancy date is”, he begins.

Ellins instead says there should be more coherence in labour market planning.

“What we are calling for is that coherence in labour market planning. If you are looking at UK infrastructure in a post-European environment you would naturally look and say ‘ok, so where have I got the talent, when do I need them and if I don’t need them till then where can I deploy them in the meantime so I don’t lose them?’

“There would be a sort of thought leadership, a guiding mind that looks at the puzzle that is UK PLC, prioritses the sectors that need the people first and then works out how they deploy them. There is no central government head to do that.”

Could the answer also lie in the demographics of the workforce?

Lila Thompson says she and others are all too aware of the fact that the industry is male dominated and believes more should be done to attract women and minorities, namely by challenging recruitment agencies to “deliver more diversity”.

She says: “People are conscious of the fact that the industry is male dominated so when there are opportunities for recruitment we need to make sure that recruitment agencies are offering a diverse range of candidates to recruit from. I think if they are not seeing that then they should challenge recruitment agencies to deliver more diversity.

“There has to be a desire at board level and management level to recruit diverse candidates and if there isn’t then they will continue to recruit as they do at the moment without being aware how much the sector is dominated by males.”

There is a range of issues affecting the workforce across the utilities sector and it is clear there is an increasing shortage of skills. Each issue represents a complex problem with multiple potential solutions.

Deploying the workforce effectively, monitoring the wellbeing of staff and ensuring it is attractive to people of all demographics are just some such solutions.