How a Fully Hosted and Managed Solution Can Mitigate the Risks Posed by an Aging Workforce

On Monday, September 17, 2018, a class-action lawsuit alleging age discrimination was filed on behalf of three former employees against IBM. The lawsuit alleges that “IBM has discriminated, and continues to discriminate, against its older workers, both by laying them off disproportionately to younger workers and by not hiring them for open positions.”

The utility industry is at the forefront in terms of having an aging workforce, and the problem isn’t issues caused by layoffs or discriminatory practices. To the contrary, many utility workers stay on the job until they retire. The aging workforce is problematic because the bulk of the industry’s talent will be taking their very specific experience into retirement in a few short years.

In an article in Electric Light & Power, Andrew Bennett, senior vice president of energy business at Schneider Electric, said more than half the current utility workforce will be eligible to retire within the next six to eight years. And when those employees leave, they will be taking with them the knowledge and expertise they’ve accumulated over all their years of service.

A retiring workforce is just one HR problem facing utilities

Several other factors are coming together to make the aging workforce a HR nightmare for utilities.

Changes in the way we deliver energy, for example, has forced many electrical utilities to transform themselves. Instead of a centralized power network, they’ve evolved into more of a “smart utility” that melds the growing number of distributed energy sources into a cohesive web. Utilities need support for these new trends and technologies.

However, electric utilities aren’t the only ones feeling the crunch. The technological revolution that has produced “intelligent” IoT devices for consumer data collection has done almost too good a job across all types of utilities. Never before has so much information been both readily available and readily collected. But utilities must store, manage and analyze all this data for it to be useful, which requires new business models with increasing dependence on infrastructure and skills of IT to utilize such data effectively.

Of course, like other industries, utilities count on colleges and universities and their graduating classes to supply them with skilled IT and engineering workers. But that’s another problem. The number of graduating engineers and techs entering the utility industry is on the decline.

Being hit hard from both ends of the spectrum—a rise in skilled labor retiring from the workforce coupled with a dwindling supply of new talent entering it—many utilities must come to grips with the fact that their current business model doesn’t work anymore.

In the same EL&P article, Bennett shared that 72% of energy employers are having difficulty in securing qualified workers to fill positions already vacated by retiring employees—much less the coming wave of vacancies. The numbers are likely to be similar across all utilities, including water and gas.

Business models and infrastructures are aging along with the workforce

Historically, the traditional vertical business model meant that each department or operation worked independently of the others. There was very little, if any, crossover of talent or resources. In effect, each department was its own “mini company.” Now that the number of available workers is in decline, that model is no longer viable.

The final blow that could cripple the operations of many utility companies is their aging IT infrastructures and no longer being able to maintain it. This includes both the hardware and software used to run their existing CIS. Much of the software is no longer upgradeable to handle the massive amounts and types of data now generated. The newer data collection devices churn out more than these CIS solutions can handle, both in quantity and type.

Where will utilities find programmers who can fix or add much-needed features to these applications, written when mainframes were still the norm?

Even if the software could somehow be upgraded, the computers and other hardware that run it need constant maintenance to keep them operational. The technicians coming out of schools today have never seen—much less worked on —devices such as these. And that’s only a factor if these new employees aren’t lured by the IT departments of companies that can afford to pay higher salaries than utilities can.

Just like the Boomer workforce, retirement of aging infrastructures is imminent.

How a fully hosted and managed CIS saves the day

With a dwindling workforce trying to do more with less—and an aging infrastructure destined to fail—how can utilities possibly expect to survive? Both human resources and tech resources are approaching their breaking point. Something must change before that happens.

In my opinion, the best and perhaps only real solution is for utilities to move their legacy CIS to a fully hosted and managed CIS platform. Such a CIS solution provides benefits to utilities on many levels, beyond just improving operational efficiencies.

When a company moves its operations to a fully hosted and managed CIS, it no longer needs to worry about an aging infrastructure. That’s now the responsibility of someone else, a provider whose business is dedicated to keeping the hardware and software up to date.

A fully hosted and managed CIS replaces a legacy CIS with a more robust, scalable solution. Modules, customizations and components can be added, improved and scaled to meet the continuously growing customer base on an as-needed basis.

Most legacy systems cannot easily integrate or provide mobile customer service. With a hosted and managed solution, mobility for both the workforce and the customer populations is possible. Not only does this make operations simpler and more efficient, but it also gives the customers what they want—more control over their accounts.

The positive effect on a utility’s operations and human resource challenges is important to note. A fully hosted and managed CIS solves the problem of how to deal with loss of expertise on legacy hardware and software by removing maintenance of those systems from the equation. But it also allows utilities to move from the vertical business model—separate entities working in silos—to a horizontal model. In this model, staff responsibilities can overlap and be shared between teams, allowing more efficient allocation of existing human resources.

The clock is ticking. Your talented workforce is getting ready to retire, and replacements are in short supply. The risk of business failure as a result is real and potentially devastating on many fronts. But moving to a fully hosted and managed CIS might be the answer to mitigate those risks now and into the foreseeable future.