Together, we have a once in a generation opportunity to work together and show that choosing to take on a career in our industries is about choosing to support our communities and our planet.
In finding sustainable energy, waste and water solutions; it is about being in the vanguard of tackling the environmental crisis; it is about meeting those vital zero carbon targets and it is about underpinning the UK economy and people with infrastructure and essential services as critical workers.”
So said Michael Lewis, Chair of the Energy & Utilities Skills Partnership, in his foreword to the refreshed Workforce Renewal and Skills Strategy, published by the partnership in June. Nick Ellins, outgoing Chief Executive of Energy & Utility Skills, agrees. The refreshed strategy shows that water and energy companies face a number of serious, ongoing challenges on skills related issues. But also, that there is evidence that a combination of vastly altered macro circumstances on one hand, and strategic achievements clocked up to date on the other, put the sector in a different place from the past and provide new opportunities.
Strategy Shifts Specifics…
The strategy refresh came just a little over three years on from the launch of the sector’s first ever joined up skills strategy, published by the Energy & Utilities Skills Partnership in February 2017.
The partnership brings together sector employers from England, Wales, Scotland and Northern Ireland and the original strategy had a simple goal: “to secure the right people, with the right skills and behaviours, in the right place, at the right time, at an affordable cost.” Never before had all energy and utilities industries across the UK pulled together in this way.
The need for it was clear. The original strategy showed there were 221,000 vacancies to be filled across the energy and utilities sector during the next decade. Moreover, that the sector did not compete well with others in the desirability stakes. The sub agenda was to make everyone – including governments and regulators – sit up, take notice and start to embed workforce considerations in every activity – not least because the sector is an enabler for wider economic and growth policy.
The ensuing three years have showed mixed fortunes for the sector. The number of vacancies are as high as ever (slightly higher in fact, at 277,000). But the existence of the strategy has yielded some specific, tangible benefits.
- Ofwat and Ofgem now include workforce resilience within the price setting process.
- Energy & Utilities Jobs has reached over 8m people and 50% of enquiries come from women. Ellins comments: “We’ve attracted people who’ve not considered the sector before from hard to reach groups.”
- The sector’s first ever Inclusion Commitment has been launched and is popular. Ellins comments: “It’s not a pledge, it’s a commitment and you’ll be audited on how you approach your recruitment, your behaviours, your cultures. We’ve got 42 organisations now signed up to it, knowing they’re going to be audited.”
- Increased investment in skills through the Procurement Skills Accord, which now has 67 employers participating. Ellins: “This has changed procurement culture…people have openly stated that it’s made a difference in the amount of money going in to training, in targeting skills gaps and suddenly you’re getting things like the Achilles UVDB database now has that built within it, changing procurement culture for good.”
- 1500+ technical apprentices have graduated into critical utility industries.
…and makes cultural contributions
While these specific achievements are great evidence of the strategy’s benefits, Ellins also highlights a number of other developments that have emerged over the past few years that are less tangible but incredibly significant. First, “getting HR into the boardroom”. typically, he says, boards only got interested in HR conversations if the questions were “is the workforce constrained or can it go down?” But now: “What we’ve managed to do is get the discussion focused on human capital.” He comments that investors now call the workforce “a key driver of value creation we never talked like that in the early days. We talked about ‘are you doing enough skills training?’, ‘how many apprenticeships have you got?’…So there’s a fundamental change there in that the new strategy is starting from a very different place.”
Second, the government approach to skills has matured. It remains a devolved responsibility, but whereas is was primarily linked to further education policy with little connection to the economy or productivity, “one of the big changes is hearing the chancellor this year…to have asked the ONS to put a value on human capital, to understand it, to grow the economy, so he can understand where to put the money for the best results.”
Third, the reputation of the sector is in a far better place. Ellins explains: “Back in the early days of the strategy, from the water companies and the utility companies the language was ‘we’re very much not managing to compel people about what we do, we’re not telling the right story, we’re not sexy enough as a sector’ …and you look at where we were when we launched the [refreshed] strategy – while the sector doesn’t have the recognition yet of, say, the NHS, people have got that we’re a force for social good. There’s more understanding and I would say a move towards genuine respect for what they do on a day to day basis… “Instead of having to plead for understanding of who we are as a sector, people are coming on to our talent attraction website in their hundreds of thousands to find out what this thing is about and to understand how they could have a role putting back into society, helping their communities, changing the world. It’s a very different dialogue. It’s not there yet by any means but its already very different.”
The New Environment
These developments within and about the sector have of course been taking place against the backdrop of a rapidly changing wider world. Since the 2017 strategy, the environment in which utilities operate has fundamentally changed. Think the climate emergency, net zero, Brexit, digitisation and data, the emergence of circular economy considerations and of course very recently COVID-19. Ellins remarks of the latter: “If you go on LinkedIn now, you’ll see hundreds of posts from the utility companies thanking their staff …the only thing that’s changed is the pandemic. Why did we have to wait for that to applaud our own staff? Because it may have seemed selfcongratulatory before”.
On top of that there have been developments in the UK skills policy environment from both central government and the devolved administrations. These include refinement of apprenticeship policy across the four nations, the introduction of T-Level qualifications, improved higher level technical education, funding modifications for post-18 education, retraining initiatives to boost skills development, localisation of skills policy and Industrial Strategy, immigration and migration policy development in the context of EU exit.
The strategy points out: “The sector will need to manage existing and long-term skills issues, alongside emerging environmental challenges and opportunities and the divergence of the skills and education system. The analysis of the sector challenges in meeting Net Zero Carbon combined with the constrained skilled labour market and changes to the skills and education system, has identified three critical workforce and skills issues that need to be addressed over the next five years: constricted labour market and evolution of jobs; workforce diversity, inclusion and attraction; and targeted training and retraining to meet market demand.”
Green Recovery Opportunity
A newly emerged additional possibility is for the energy and water sectors to play a significant role in any green recovery from COVID-19 the government may choose to pursue. Ellins sees the opportunity. He comments: “The certainty is greater than almost all the other parts of the economy. So it’s very exciting to look at the damaged economy and say, ‘can we do something to help, from a position of relative stability?”
One obvious option is to provide employment for those losing jobs at hard hit firms, says Ellins, referencing Maclaran, Bentley, Rolls Royce, easyJet. “Look what’s coming out of that, data analysts galore, engineers beyond our wildest dreams. If not now, when? This is it, this is the moment – right now, today. Yesterday we were pleading with companies to get jobs onto the Energy & Utilities Jobs board we’ve seen a 50% increase in jobs posted in a week and we want more. We want to grab everyone Jaguar has got going spare. We want everyone from Maclaren, I don’t care if they emptied the bins! These are absolute gems and there is an opportunity for them to come to some of the highest performing UK companies in the utility sector.”
He urges the sector to think strategically about the green recovery opportunity, and put itself in the best position to deliver on existing commitments as well as any new ones that might come its way. “So we could say, look at what we’re trying to do to 2050, have we actually got a workforce plan? Do we actually do strategic workforce planning for the leakage commitment? No we don’t. Do we do strategic workforce planning for the metering commitment, dumb and smart? No we don’t.”
Inclusion and UK plc
The new strategy has distilled 2017’s ten priorities to six. This followed extensive engagement with the partners. Ellins explains, in the new environment: “We need even more focus on fewer things, to really fire our bullets very carefully.”
The first of the six priorities is for the workforce to reflect the population the sector serves; this seems particularly pertinent given recent societal focus on diversity and inclusion. Utilities don’t cover themselves in glory here: workforce diversity and inclusion levels continue to be below the UK averages for gender, BAME and disability (see table 3).
Ellins calls it “work in progress in terms of achieving diversity and inclusion.” He points to widespread sign up to the Inclusion Commitment mentioned above, and to sterling work by some companies (he name checks Bristol, Affinity and Scottish Water). “There’s some cracking stuff going on here. There’s a massive difference between the results we’re achieving in percentage terms on diversity and inclusion, and the attitudes and behaviours of the industry to get it right in the future. They’ve taken huge strides and I genuinely applaud them for it.”
The final two of the new strategy’s six priorities focus on the sector’s contribution to UK plc. “We’ve got a core role here in doing something much bigger than ourselves. That will be easier if everyone knows that when they are equipping their next 100 leakage technicians, this isn’t just to meet their target, it’s to drive forward the carbon commitment…it gives us a bigger purpose and I think that will work.”
He adds an interesting observation about the role, current and future, of the supply chain. “Many of the big contractors power the water companies’ outputs. If you took them away tomorrow, the workforce couldn’t even stand up…So instead of seeing them as a contractual supply chain, they’re as good as your investors. If they don’t feel attracted to the sector, if they are spooked by the price review or spooked by the politics as we saw at Christmas, if they decide there’s more stability and security in rail, or French nuclear, or Canadian gas…they are major organisations and our job is to make this attractive for them.”
This is about to be tested, he believes: “over the next 12m, we will see the utility sector as seen by the supply chain as less attractive than it’s been in the past.” on top of the 40,000 or so workers displaced every price review (as detailed by a British Water/ treasury report), there have been “force majeure clauses and work stoppages” from COVID-19. “Our job over the next 12m is to wrap them in warm blankets and look after them. If they clear off, we’ve got to do it for ourselves and pay for it ourselves and there’s consequences to that.”
Next steps?
Ellins is leaving Energy & Utility Skills at the end of July. On 21 September, Phil Beach CBE, currently Executive Director for vocational and technical qualifications at the Office of Qualifications and Examinations Regulation (Ofqual) will take over as Chief Executive.
Reflecting on his experience, Ellins takes a moment to recognise the “never ending help” has received from Ofwat and the DWI in making progress over the past five years, as well as the water company Chief Executive’s who have supported his work and, interestingly, the trade unions whose assistance has also been “constant”.
The sector obviously has a long way to go to secure a resilient workforce for the long term. Ellins urges companies to stick together and work together to continue to shift the dial in the right direction. “together we can move things forward,” he says, adding that while it must be “overwhelmingly tempting” for companies just to think about their own needs right now “That’s not how the public think about the utility sector – try as we might, they see us as a collective and we stand and fall together”.
Ellins has a few items on his end-of-term wish list, perhaps ones for his successor to progress. First, “Someone in Cabinet office to be responsible for the UK labour market and human capital” ideally the Chancellor or the Secretary of State for Work and Pensions, with devolved governments involved as peers. Utilities are “in the strongest position we’ve probably been in for a decade” to influence the debate, he says – but with only around 550,000 employees in total, the sector remains “peanuts compared to other employer groups the government is dealing with on a day to day basis”. Some advice: “The utility sector needs to be seen as what it is – critical to UK plc…then utilities will get their place at the top table.”
Second, now workforce resilience is a formal price review requirement, Ellins would love to see boards providing formal assurance of it. “I would like to see it in the ring fenced certificate…it’s a core document between the company, the regulator and the customer, to show that they are resilient in all those areas of key capital. So, I think it’s time that human capital was in the ring fenced certificate.” He appreciates this will be a sensitive area for some. “I think it would make some people very nervous at this stage, given the other things they’re trying to manage”. But nonetheless “a number of companies could give that assurance right now” and really, all should be able to do so. In the round, Ellins says his successor “will have a very different job to do”. alongside all the developments detailed, he points out Energy & Utility Skills itself is in a different place from when he joined. With government funding withdrawn within weeks of his appointment, he has built the organisation up to be “100% self-supporting”. and with a minority of income now coming from membership fees, it occupies the role of “credible independent advisor” rather than trade association. Beach will have to grapple with the fallout of COVID-19, but Ellins hopes he will ultimately be able to “bring things to the next level.”
This article is reproduced from The Water Report.