Where Have All the Electricity Workers Gone?

As business leaders, success or failure depends on our ability to anticipate the opportunities and challenges that lie ahead. Unfortunately, the electricity sector is littered with remnants of weak foresight so that we are now faced with an acute shortage of skilled and experienced workers. How could this latest crisis have come about?

Decisions made with a short-term view are doomed for long-term failure

Demographic analysis is one of the most powerful tools available to provide context and a view of the road ahead. If there are lots of young people today, there will be lots of old people in the future — that’s not rocket science. The world’s population ripples as a result of major events such as World War II.

The fortunes of industries ebb and flow as a result of major events within their sphere like the November 9, 1965 blackout [in Ontario and the northeastern United States]. Technology advances such as the computer age also have profound effects on the world around us.

As it happens, the present shortage of people in the electricity industry was entirely predictable. It is a result of either not using population and other demographic information, or being locked into business decision processes that do not encourage a long-term view.

The root causes

Population demographics are a major cause of today’s problem. The book Boom, Bust & Echo describes three important demographic cohorts since World War II: the huge Boom generation born from 1947-1966; the relatively small Bust generation born from 1967-1979 that never had much of an impact on the economy; and the Echo generation born after 1980 who are now replacing their Boomer parents in the workforce. The large numbers of Boomers and Echoes, combined with the growing economy that they’ve played a large part in building, are now driving the increasing demand for electricity. As Echoes replace Boomers in the workforce, the age gap almost ensures that any overlap will not be long enough to enable adequate mentoring — this paints a challenging picture for skill and practical knowledge transfer.

The November 9, 1965 blackout is a second root cause and probably the most important. It seems impossible that such an old event could be the cause of today’s crisis — but it is. That event changed everything because it demonstrated a colossal failure of the criteria previously used to design and operate power systems. Virtually everything had to change and that triggered massive hiring in the industry between the late 1960s and early 1970s — these new recruits were Boomers. For the next 30 years, there was no room in corporate budgets to hire people because all the seats were full. No new employees were available to receive mentoring or training. Then the workforce reached retirement age and is now leaving all the seats empty. In the meantime, no young people had been foolish enough to study power because they would never have gotten a job. Although there are young people available now, they were not trained in power because the universities dropped power options due to low demand, and there are few remaining to train or mentor them within the industry.

The Technology Revolution, driven primarily by the Echoes, has thrown a major challenge at the industry, and is a third root cause for today’s crisis. The advent of microprocessor multi-function devices has meant that, for the first time in the history of the electricity industry, it is now possible to economically replace control equipment. The new equipment has hit with a vengeance; it is easy and economical to retrofit, and it provides all kinds of additional functionality to add value for utility and industry operators. The demand for people with industry experience is growing while the supply of new people with the skills to retrofit equipment is diminishing.

Putting these three factors together, you get an unprecedented demand for electricity based on general demographics (post WWII), an unprecedented shortage of experienced workers (Nov. 9/65), and a technology revolution allowing for replacement of ancient equipment, all interacting with each other.

Where do we go from here?

Clearly, if we do not learn from failures of the past, we are doomed to repeat them. We need to create training programs for the technology-savvy yet mechanically challenged Echo generation (now aged 10 to 25), especially in Ontario.This is easier said than done, but a solution must be found.

We have to identify potential future events and assess their consequences. It doesn’t take a lot of imagination to see that the Boomers are the only available source of industrial training for the Echoes. The Boomers will soon be in their 60s, and it takes five to 10 years to develop a mature, skilled worker in the power industry.

The writing is on the wall.

David K. Foot is Professor of Economics at the University of Toronto, a demographer and author of the best-selling book Boom, Bust & Echo. Douglas A. Urban is director of Hatch Energy’s transmission and distribution division and an expert on the North American electricity sector. He is based in Oakville, Ontario.

This article originally appeared in the Hatch Energy newsletter Innovations, November 2006. It is reprinted with kind permission.