Significant attention has recently focused on the need to replace the aging electricity infrastructure in Canada and the U.S. Typically, when the word ‘infrastructure’ is used in an industry context, it is assumed to refer to the equipment and systems that generate, transmit and distribute electricity. But infrastructure also refers to the underlying structure of the industry, which is composed of more than machinery. It is composed of people, and they too are aging.
The Canadian Electricity Association was first alerted to the aging workforce issue in 2002 when some of its members expressed concern that their own workforces were composed of a significant proportion of ‘baby-boomers’. The concern was strong enough that a preliminary study of the employee age composition of CEA members was undertaken with the support of the Government of Canada. The results were troubling: nearly 40% of member employees were eligible to retire by 2014. In response to the serious implications the results posed, the industry sought additional funding to undertake an in-depth study of the Canadian electricity employee population. Thanks to generous funding provided by the Government of Canada and an equal amount matched by industry labour and services donations, the Electricity Sector Study was initiated in 2003 and concluded in 2004. The results, published in the comprehensive report “Keeping the Future Bright”, were released in the first quarter of 2005.
The objectives of the Electricity Sector Study were to:
1) Develop an electricity industry human resources profile;
2) Determine the root causes of identified human resources issues;
3) Identify industry ‘best practices’ with respect to human resources planning; and
4) Provide recommendations for a human resources strategy for the industry sector.
The study methodology was based on extensive research that included employer and employee surveys; surveys of educational and training institutions offering relevant electricity sector courses; interviews with key stakeholder groups, including industry and labour leaders; focus groups with management and operational employees, as well as youth across Canada; and a review of secondary research sources such as Statistics Canada data.
Human Resource Profile
Labour force estimates from the Electricity Sector Study indicate there are currently 75,777
electricity-related employees, well below the levels of employment 10 years ago. Women are
underrepresented in the sector accounting for only 25.4% of employees, significantly lower than the Canadian average where women represent 46.9% of the workforce. Visible minorities make up only 7% of workers in the electricity sector as compared to 12.6% of the national workforce, and Aboriginal workers account for 2.2% of the electricity workforce.
Employees surveyed were very satisfied with their work environment with just over 80% expressing satisfaction with their general working conditions and approximately 90% with safety. 69% of employees rated the electricity sector as a good or excellent career choice when compared to other industries.
Employees are well compensated against the Canadian average, earning 11% more than
utilities workers in general, and nearly double the combined ‘all industries’ figure. 100% of
companies surveyed provided pension plans, extended health care and parental leave while a majority of companies provided additional program support such as paid apprenticeship, relocation support, flexible work, in-house training, additional variable compensation incentives and reimbursement of costs for educational programs.
Large companies indicated that voluntary turnover including retirement was 4 % with the highest turnover, 7%, reported by firms whose primary line of business is generation. Industry representatives reported no large barriers to inter-provincial mobility of labour, and utilities did not identify significant employee losses to other provinces or to other countries. The majority of new hires reported were replacement positions, with only 1.3% of electricity-related new hires identified as related to growth. A majority of employers hire summer students and co-operative education students; however only slightly more than half hire apprentices. Industry representatives reported current shortages of power engineers, nuclear engineers, geological engineers, nuclear operators, power line technicians and, protection and control technologists.
Preparing Future Workers – Education and Training
In general, youth consulted had little or no awareness of the electricity sector as a career option and perceptions of the industry were frequently inaccurate. In focus groups, youth said teachers generally did not discuss careers in the electricity sector. Focus groups from all communities (managers, employees and youth) felt that shift work and safety risks were factors that might prevent young workers from choosing the industry as a career. Salary and benefits were seen as positive for the sector and the industry was seen as a good opportunity for those who liked “hands on” work.
The top challenge to support the industry was the cost of electricity-related technology and
equipment, while the most common gap reported was a lack of placements, whether co-op or apprentice. Other challenges identified included an insufficient number of students enrolling in industry-related programs and technology change in the sector. Manager focus groups identified the industry hiring slow down of the 1980’s and 90’s as a factor in training program shutdown. They expressed concern over industry capacity to train workers to meet pending retirements. Employers reported certifications and credentials as important and expressed a preference for hiring fully functional workers who did not require substantial in-house training. Mandatory training per employee averaged 37.7 hours and discretionary training averaged 22 hours Canada-wide.
Retirement Projections
The age demographic results identified in the Electricity Sector Study demonstrate that
retirement is a serious and impending issue for Canada and could pose significant risk to the future of the industry. Current estimates show that 17,066 trades, engineering and managerial staff are expected to retire within the next nine years. Estimates provided by employers indicate that over 17% of the existing workforce will be eligible for retirement in the next five years and almost forty percent (37%) by 2014. Further, more than half of decided employees stated they would not work for their current employer past the date they qualified for retirement. Based on the employee survey data, there are relatively few options that would encourage employees to work past their eligible retirement date.
Succession planning is a vulnerability within the industry. Nearly one-third of large companies surveyed either did not have or did not know whether they had a succession plan. This suggests that a substantial percentage of utilities could be unprepared for, and vulnerable to the effects of upcoming retirements.
The level of future retirement is pervasive across every region of Canada and across diverse business lines in the electricity sector. Based on the number of estimated retirements, the sector will need to fill nearly 9,000 vacancies in technical positions over the next four years and more than 17,000 vacancies over the next nine years. These new hires will require significant in-house training, supervision and mentoring. While utilities currently recruit for a few positions per year (i.e. 4% turnover on average for the industry), in the future, large-scale turnover in electric utilities will place considerable strain on existing staff to train and mentor new workers, and to support the transition of existing staff to more senior roles. While some utilities have historically relied on recruiting trained employees from other utilities or provinces, in the future, the need to hire a substantial number of new employees in every region will mean that utilities will be forced to draw upon recruits with no experience.
Key stakeholders, senior industry leaders and associated labour organizations expressed concern over the impact of pending retirements on the electricity sector. Risks identified include:
infrastructure projects slowed or stopped; lessened reliability; increased cost of production; a greater or earlier reliance on automated systems; potential impact to neighboring firms; and a possible negative impact on safety performance. Worker retirement was identified as a top issue by over 90% of the industry leaders interviewed.
Next Steps
Retirement, combined with re-skilling needs due to technology change, will require utilities, labour groups, educators and government to collaboratively develop human resources strategies to maintain a viable electricity sector in Canada. Based on study findings, four main recommendations were developed in consultation with CEA.
1) Develop strategies to mitigate risk to the industry due to the aging workforce.
2) Develop a collaborative, cross-industry strategy for providing training to prospective and existing staff in the electricity sector.
3) Adopt a targeted marketing and promotion campaign to attract individuals from qualified groups of potential new entrants.
4) Establish a mechanism to ensure greater collaboration between utilities and other groups in the electricity industry.
Supporting the recommendations are a series of 17 strategies developed to assist organizations and agencies in better planning for current and future human resources challenges.
Partnering for Change
Collaborative partnership remains a critical element in ensuring a bright future for the Canadian electricity sector. Recently, members of the CEA Human Resources Committee met with industry labour leaders to identify how best to join forces in addressing sector needs. The International Brotherhood of Electrical Workers, the Power Workers Union, the Canadian Union of Public Employees and, the Society of Energy Professionals have agreed to partner with CEA to develop a strategic initiative to mitigate the impact of pending retirement. The development of a collaborative industry partnership framework is planned to be launched in November 2005.
For more information or to view the study online, visit www.BrightFutures.org.
The Canadian Electricity Association was first alerted to the aging workforce issue in 2002 when some of its members expressed concern that their own workforces were composed of a significant proportion of ‘baby-boomers’. The concern was strong enough that a preliminary study of the employee age composition of CEA members was undertaken with the support of the Government of Canada. The results were troubling: nearly 40% of member employees were eligible to retire by 2014. In response to the serious implications the results posed, the industry sought additional funding to undertake an in-depth study of the Canadian electricity employee population. Thanks to generous funding provided by the Government of Canada and an equal amount matched by industry labour and services donations, the Electricity Sector Study was initiated in 2003 and concluded in 2004. The results, published in the comprehensive report “Keeping the Future Bright”, were released in the first quarter of 2005.
The objectives of the Electricity Sector Study were to:
1) Develop an electricity industry human resources profile;
2) Determine the root causes of identified human resources issues;
3) Identify industry ‘best practices’ with respect to human resources planning; and
4) Provide recommendations for a human resources strategy for the industry sector.
The study methodology was based on extensive research that included employer and employee surveys; surveys of educational and training institutions offering relevant electricity sector courses; interviews with key stakeholder groups, including industry and labour leaders; focus groups with management and operational employees, as well as youth across Canada; and a review of secondary research sources such as Statistics Canada data.
Human Resource Profile
Labour force estimates from the Electricity Sector Study indicate there are currently 75,777
electricity-related employees, well below the levels of employment 10 years ago. Women are
underrepresented in the sector accounting for only 25.4% of employees, significantly lower than the Canadian average where women represent 46.9% of the workforce. Visible minorities make up only 7% of workers in the electricity sector as compared to 12.6% of the national workforce, and Aboriginal workers account for 2.2% of the electricity workforce.
Employees surveyed were very satisfied with their work environment with just over 80% expressing satisfaction with their general working conditions and approximately 90% with safety. 69% of employees rated the electricity sector as a good or excellent career choice when compared to other industries.
Employees are well compensated against the Canadian average, earning 11% more than
utilities workers in general, and nearly double the combined ‘all industries’ figure. 100% of
companies surveyed provided pension plans, extended health care and parental leave while a majority of companies provided additional program support such as paid apprenticeship, relocation support, flexible work, in-house training, additional variable compensation incentives and reimbursement of costs for educational programs.
Large companies indicated that voluntary turnover including retirement was 4 % with the highest turnover, 7%, reported by firms whose primary line of business is generation. Industry representatives reported no large barriers to inter-provincial mobility of labour, and utilities did not identify significant employee losses to other provinces or to other countries. The majority of new hires reported were replacement positions, with only 1.3% of electricity-related new hires identified as related to growth. A majority of employers hire summer students and co-operative education students; however only slightly more than half hire apprentices. Industry representatives reported current shortages of power engineers, nuclear engineers, geological engineers, nuclear operators, power line technicians and, protection and control technologists.
Preparing Future Workers – Education and Training
In general, youth consulted had little or no awareness of the electricity sector as a career option and perceptions of the industry were frequently inaccurate. In focus groups, youth said teachers generally did not discuss careers in the electricity sector. Focus groups from all communities (managers, employees and youth) felt that shift work and safety risks were factors that might prevent young workers from choosing the industry as a career. Salary and benefits were seen as positive for the sector and the industry was seen as a good opportunity for those who liked “hands on” work.
The top challenge to support the industry was the cost of electricity-related technology and
equipment, while the most common gap reported was a lack of placements, whether co-op or apprentice. Other challenges identified included an insufficient number of students enrolling in industry-related programs and technology change in the sector. Manager focus groups identified the industry hiring slow down of the 1980’s and 90’s as a factor in training program shutdown. They expressed concern over industry capacity to train workers to meet pending retirements. Employers reported certifications and credentials as important and expressed a preference for hiring fully functional workers who did not require substantial in-house training. Mandatory training per employee averaged 37.7 hours and discretionary training averaged 22 hours Canada-wide.
Retirement Projections
The age demographic results identified in the Electricity Sector Study demonstrate that
retirement is a serious and impending issue for Canada and could pose significant risk to the future of the industry. Current estimates show that 17,066 trades, engineering and managerial staff are expected to retire within the next nine years. Estimates provided by employers indicate that over 17% of the existing workforce will be eligible for retirement in the next five years and almost forty percent (37%) by 2014. Further, more than half of decided employees stated they would not work for their current employer past the date they qualified for retirement. Based on the employee survey data, there are relatively few options that would encourage employees to work past their eligible retirement date.
Succession planning is a vulnerability within the industry. Nearly one-third of large companies surveyed either did not have or did not know whether they had a succession plan. This suggests that a substantial percentage of utilities could be unprepared for, and vulnerable to the effects of upcoming retirements.
The level of future retirement is pervasive across every region of Canada and across diverse business lines in the electricity sector. Based on the number of estimated retirements, the sector will need to fill nearly 9,000 vacancies in technical positions over the next four years and more than 17,000 vacancies over the next nine years. These new hires will require significant in-house training, supervision and mentoring. While utilities currently recruit for a few positions per year (i.e. 4% turnover on average for the industry), in the future, large-scale turnover in electric utilities will place considerable strain on existing staff to train and mentor new workers, and to support the transition of existing staff to more senior roles. While some utilities have historically relied on recruiting trained employees from other utilities or provinces, in the future, the need to hire a substantial number of new employees in every region will mean that utilities will be forced to draw upon recruits with no experience.
Key stakeholders, senior industry leaders and associated labour organizations expressed concern over the impact of pending retirements on the electricity sector. Risks identified include:
infrastructure projects slowed or stopped; lessened reliability; increased cost of production; a greater or earlier reliance on automated systems; potential impact to neighboring firms; and a possible negative impact on safety performance. Worker retirement was identified as a top issue by over 90% of the industry leaders interviewed.
Next Steps
Retirement, combined with re-skilling needs due to technology change, will require utilities, labour groups, educators and government to collaboratively develop human resources strategies to maintain a viable electricity sector in Canada. Based on study findings, four main recommendations were developed in consultation with CEA.
1) Develop strategies to mitigate risk to the industry due to the aging workforce.
2) Develop a collaborative, cross-industry strategy for providing training to prospective and existing staff in the electricity sector.
3) Adopt a targeted marketing and promotion campaign to attract individuals from qualified groups of potential new entrants.
4) Establish a mechanism to ensure greater collaboration between utilities and other groups in the electricity industry.
Supporting the recommendations are a series of 17 strategies developed to assist organizations and agencies in better planning for current and future human resources challenges.
Partnering for Change
Collaborative partnership remains a critical element in ensuring a bright future for the Canadian electricity sector. Recently, members of the CEA Human Resources Committee met with industry labour leaders to identify how best to join forces in addressing sector needs. The International Brotherhood of Electrical Workers, the Power Workers Union, the Canadian Union of Public Employees and, the Society of Energy Professionals have agreed to partner with CEA to develop a strategic initiative to mitigate the impact of pending retirement. The development of a collaborative industry partnership framework is planned to be launched in November 2005.
For more information or to view the study online, visit www.BrightFutures.org.
