Protecting workforce resilience in the energy and utilities sector

Nick Ellins, CEO of Energy & Utility Skills

The recently published Energy & Utilities Skills Partnership Workforce Renewal and Skills Strategy highlighted the challenge that exists over the next decade for our sector - protecting the quantity, quality and responsiveness to change, of the sector’s most critical resilience resource – its people.  The Skills Strategy sets out how the sector’s leaders will act together to ensure sustainability and where policy makers and regulators need to play their part in ensuring resilience and a sector-wide approach. 

Recent data published by Office for National Statistics amplifies that need and indicates that the UK’s labour market is arguably tighter than at any point since records began.  The employment rate, or proportion of people aged 16 to 64 who were in work, reached the highest level in March 2017 at – 74.8%, since comparable records began in 1971. At the same time, the unemployment rate has fallen to its lowest level since July 1975 – 4.6%. 

The lack of labour availability is also reflected in job growth across the economy.  In the 12 months to December 2016, the number of jobs in the UK economy has grown by just 1.6%.  During the same period however, the number of jobs in the water supply, sewerage and waste management sector has grown by 8.3% and the power and gas sector grew by 7.9%.  With the exception of jobs growth within what is termed ‘private households’, our sector’s growth rates are currently the highest of any sector of the UK economy.

The Workforce Renewal & Skills Strategy predicts a gap of 221,000 workers by 2027. The lack of suitably skilled labour is reflected in the prevalence of vacancies that are proving hard-to-fill by employers. Whilst companies often get many hundreds of responses to job adverts, and may think that the market will provide, the lack of applicants with the required skills, qualifications or experience (known as ‘skills shortage vacancies’) is significant. 

In the last UK Employer Skills Survey (2015), there were an estimated 210,000 skills shortage vacancies reported by UK employers; a significant increase from the 150,000 reported in 2013.   6% of all employers reported having at least one skills shortage vacancy, up from 4% in 2013.

Within the energy and utilities sector, 36% of all vacancies were skills shortage vacancies – the highest proportion of any sector; compared to a national average of 23 per cent.

In 2012, Energy & Utility Skills provided evidence of skills shortages affecting 13 occupations within the electricity transmission and distribution sector. Many employers reported no unemployment amongst the appropriately skilled workers, and that whilst applicants for key roles came in bulk, there was a dearth of those with the required mix of skills, qualifications and experience.

Consequently, our sector faces its existing workforce challenges plus new political uncertainty and the approaching BREXIT adaption. Resilience of the workforce will require a concerted team effort from policy makers, regulators, regulated business, delivery partners and the whole supply chain. If we thought we could just leave it to the market, we will see our costs rise and efficiency fall. If we thought we could draw in the unemployed, less than one per cent (3,000) of the 514,000 Jobseekers’ Allowance claimants in April 2017[1] are seeking employment in the broad occupations which include the 13 job titles on the UK’s Shortage Occupation List.

It is time to act to ensure resilience. The utilities sector can expect to face a talent acquisition challenge for some time to come. As the Skills Strategy sets out the approach, the sector needs some early focus from its new Government:

  • Explicit recognition of the importance of strategic workforce renewal within the future visions, strategies and policies of all the key sponsoring government departments and regulators
  • Consistent application of skills policy across the four nations to avoid employers having to incur increased costs and red tape through multiple rules and regimes. Utilities businesses and their delivery partners increasingly operate for domestic and retail customers across the UK
  • Resilience duties to include ensuring a sustainable and competent sector-wide workforce, including recognising the workforce needs within the vital policy making and regulatory bodies
  • Better coordination between policy makers – across the four nations – to ensure that all employment and skills policy has strategic coordination, complementing employer needs, and supporting an energy & utilities sector that underpins the whole UK economy and serves 65 million of its citizens every single day
This article first appeared in Utility Week and was re-published here with its kind permission.

 

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