Diversify or die: why utilities need to work harder on their future workforce strategies

The utility sector's response to the massive changes facing the sector and society need to start with bolder HR policies says Laura Sandys.

Diversity is the key to a successful future for energy and water. Dermot Nolan, CEO of Ofgem made that clear in a very welcome recent statement that threw down the gauntlet to the energy sector to step up efforts to increase diversity. He reinforced the message with a pledge through the Powerful Women programme – an initiative to promote gender diversity in the energy sector – to achieve a 50:50 gender balance across Ofgem’s staff by 2025.

Meanwhile, Rachel Fletcher as CEO of Ofwat embodies the positive impact that diversity can have in energising an organisation and a sector. Her impact at the water regulator reinforces the demonstrable benefits of gender diversity that the several excellent female CEOs at our water companies display on a daily basis.

As Nolan articulated in his strong statement on diversity, new talent, new ideas and new skills must be part of building a more resilient utility sector. By making the commitment to balance Ofgem’s gender diversity by 2025, he also set an inherent expectation that the sector needs to set itself similar ambitions.

Formalising such ambitions is important. The Powerful Women annual update on diversity showed that women hold just 6% of senior management roles in the energy sector and this figure has remained broadly static for some time, showing that good intentions are not enough.

Driving for diversity is not for some “woke” concept of equality – nor can this be tokenism. Diversity should be seen as business critical – and this is not just gender but blended teams with a range of ethnicities, personalities, skills and attitudes.

Utilities are all facing some very significant challenges to their business models. Technology and, arguably most importantly, changing consumer expectations, are driving new approaches to the delivery of utilities and challenging the very definition and values around what a utility is.

What has stood as business as usual in this sector is no longer a sustainable strategy. Decision making at all levels of a company is becoming more complex with wider trade-offs, more stakeholders, new competitors and changing cost pressures.

Addressing this level of change needs to start with the HR department. We need our teams at all levels to be future fit with a much greater diversity of skills and talents, from technology through to new business model development, consumer designed services, adaptive and flexible management processes.

Yes this is about more women, and more wider diversity across teams – but more importantly this is about culture change. That is the most important outcome of a strong diversity strategy.

Those making recruitment decisions in your company should also be picking up a very important message from your younger recruits. Whatever gender, younger people no longer want to work in super hierarchical companies, they will not tolerate gender inequality, their attitudes to women and ethnicity is fundamentally different.

If you cannot present a real commitment to change, recruitment which is going to be extremely tight for all, will become increasingly difficult. I would go as far to say that recruitment and retention is one of the utility sector’s biggest business challenges.

So where to start? I do hope that all companies have the basic data – gender and ethnicity breakdowns at all levels, that companies have visibility and are taking action on pay inequality, and that they have addressed the key barriers to combining work and caring responsibilities.

With that data, action can then follow such as diversity being owned by the CEO as a strategic objective, reviewing the recruitment process, training top executives who are making recruitment decisions, ensuring that short lists are diverse, including women on the recruitment panels, and designing apprenticeship schemes with inclusion at their core.

I am very honoured to be the lead judge for the Diversity Award at the Utility Week Awards this December.

We as a judging team will be looking for four key elements. Firstly what are companies doing to address the basics – and with the data this should be already progressing well, clear targets for what they want to achieve and by when, what new innovations are they employing to make the change, and how are they benchmarking themselves against not our sectors but others.

I look forward with my fellow judges to be blown away by the great submissions because while we know that the sector “gets it”, it needs to turn this knowledge into action!