The energy and utilities industry is a crucial pillar of global infrastructure and economy. Energy (electricity, gas, oil, renewable, wind, etc) powers our lives and employs millions, whose jobs we rely on to run everything from machines that produce our food and beverages to our electric toothbrushes.
Despite the critical role played by the energy sector, the industry is facing many challenges recruiting and retaining its workforce. Key among them is the urgency to build a workforce to meet today's needs and future challenges. Learn about the current state of the energy workforce, see how investing in early talent can help overcome potential challenges, and discover best practices for early talent programs in the sector.
Challenges in the Energy and Utilities Labor Market
The energy industry has long had stable employment conditions, so there hasn't been much need to change the way it hires, particularly for entry-level employees who were internally promoted to more specialized, skilled, and management roles. However, the sustainability of this employment model is being threatened by demographic shifts. A growing proportion of personnel with industry-specific expertise are eligible for retirement. Finding appropriate candidates to promote to these positions will become more difficult when these workers start to depart in larger numbers. This situation is corroborated by The 2021 Energy Outlook Report which cites lack of succession planning as the second cause of skills shortage in the industry after education and training. 56% of energy executives interviewed in the report also said that an aging workforce is a significant barrier.
As the energy workforce nears retirement, utility companies face unprecedented obstacles in their quest to find new hires with the necessary digital and analytical skills. These companies are experiencing significant difficulties hiring, particularly for specialist tech skills, as a result of advancements in smart grid, distributed generation, microgrids, and energy storage. There is likely to be an increasing skills gap among individuals hired at the entry level as a result of these smart technologies affecting, if not completely eliminating, traditional utility positions that have served as gateways to the sector.
Clamor for newer business models
Energy companies are facing increasing social and political demand to adopt a new business model. Indeed, all industries that are deemed as heavy emitters are getting hard-pressed to put people and the planet first. According to Capgemini, only 18% of energy companies have a comprehensive new business model that prioritizes decarbonization, digitization and decentralization. Lack of competencies in this area is cited as one of the main roadblocks, with 70% of respondents stating they are unable to develop new-energy business models. Additionally, 62% of corporations say they lack the internal expertise required to create, promote, and manage services.
Perception issues among the younger generations
Energy and utility companies face a perception issue with Gen Zers who are expected to make up 27% of the workforce by 2025. E&U companies are often deemed as static and old-fashioned, making them unattractive employers for Gen Zers, who prefer modern or well-established companies, government agencies or even startups. Energy companies also have to contend with reputational concerns such as environmental issues associated with oil and gas. According to a study by PwC, 14% of millennials report they would avoid working in oil and gas because of the industry's image.
Lack of diversity
The immense benefits of having a diverse workforce are well-known. Yet, 71% of participants in a Center for Energy Workforce Development (CEWD) Listening Session focused on DEI described the industry as lacking diversity, with 74% citing difficulties in sourcing and hiring people of differing races and 64% citing difficulties in hiring and retaining women. The majority of participants, 92% in fact, stated that more needs to be done to correct the situation. Achieving a diverse workforce can also be a strategy to attract younger candidates who, according to a 2021 Glassdoor study, look at diversity as a key factor when evaluating workplaces and choosing where to work.
Investing More in Early Talent Can Combat These Challenges
NACE recently surveyed employers who overwhelmingly cited internships as the recruitment strategy with the highest ROI for entry-level hires. Investing in internship and early talent programs can help energy and utility companies address labor challenges. Here is how:
Building Brand Awareness
Internship and early talent programs can help energy industry players create an attractive employer brand by shifting the industry's perception among younger, potential new hires. A great internship experience enables former and current interns to spread the word about your workplace and create a conveyor belt of new talent. Internships help young talent learn the intricacies and benefits of different roles, and help them make a career choice. Take the case of Eric Jauregui who interned at OPPD as a lineworker, and now works full time at the company. “If it wasn’t for Legacy, I wouldn’t even know what a lineworker was. But that internship solidified that this was what I wanted to be. I got hooked,” Eric says, underlining the impact of brand awareness and capturing talent at the right time.
Gen Zers are placing a higher premium on diverse workplaces. According to an Accenture report, Getting to Equal 2020: The Hidden Value of Culture Makers (2020), 75% of younger generation jobseekers are considering workplace culture when job-seeking, and Monster found that 83% of Gen Z candidates consider a company’s commitment to DEI to be important when choosing an employer. Energy sector employers need to be intentional in building diverse talent pipelines, and leveraging internships can be powerful in getting diverse entry-level talent (who will eventually become managers and executives) in the door.
On-the-job skills training
Technological advances in the energy sector are evolving fast. To keep up, energy industry employers need to stay apace with these innovations. One way of doing this is by imparting interns with new skills learned on the job. Internship programs enable young talent to learn from experienced energy sector workers, and supports a robust succession management plan.
Increase employee retention rates
A study by the National Association of College and Employers (NACE) found that employees who interned with their employers had higher retention rates than employees with no internship experience or who interned elsewhere. The higher retention rates were seen over both a one- and five-year period. One reason why internal interns are more likely to stay on the job is because internships serve as a trial period for candidates to test company fit and vice versa.
Best Practices for Successful Internship and Early Talent Programs
When looking to develop a successful internship and early talent program in the energy and utility industry, the following best practices can come in handy:
Meet diverse talent where they’re at
Organizational diversity starts with early talent. When building out your diversity strategy, it’s important to map out what your goals are and understand how internships can help you achieve these goals. What areas of diversity do you need to improve on? Is your team of lineworkers lacking women? Are you struggling to hire traditionally underrepresented talent to your engineering team? Once you’ve identified your goals, you need to meet talent where they’re at. Build meaningful partnerships with universities and colleges such as HBCUs. Find ways to collaborate with the faculty and career services on areas such as curriculum development, scholarships, and on-campus career talks. The faculty is likely to support your program if they find it beneficial to their students. You should also try to develop partnerships with organizations that support underrepresented and underserved talent such as INROADS and YUPRO to help you get in front of diverse early talent.
Offer attractive compensation packages
In the current competitive job market, show how well the energy sector can pay and turn candidate heads by offering attractive compensation and benefits. Interns care about how much they earn just like everybody else. In fact, a RippleMatch survey shows that intern candidates rank financial benefits higher in their preferences than work-life balance, career development, and wellness. The average intern pay in 2021 was $20.81 per hour, even more for certain intern roles like engineering. This means low pay or no pay at all is likely to make you less competitive.
Keep interns warm
With reneges on the rise, it’s important to engage your interns before, during, and after their internships. Organize fun events, networking opportunities, expose interns to company leadership, and invite them to cross-functional meetings. You can also send company newsletters and updates to your past interns to remain at the top of their minds. With intern candidates receiving at least two offers, keeping them warm can reduce renege rates. Check out our keep warm strategy checklist for more ideas.
Leverage intern feedback
Seek and leverage intern feedback about your program to continuously improve intern experience at your company. Your intern managers should have regular 1:1s scheduled to assess intern performance and sentiment. On top of 1:1s, program admins should send out midpoint and end-of-program surveys to understand overall program performance and which interns are on-track or off-track. If an intern's performance is not up to standards, ensure you give timely feedback and share helpful resources. Turn mistakes into teachable moments and support interns to turn their performance around through coaching and mentoring. Getting and acting on feedback demonstrates to your interns that you take their experience seriously.
Measure your program
Set measurable goals and track key metrics to evaluate the progress of your program. These include conversion rates, renege rates, time to hire, DEI, etc. However, don't just measure for the sake of measuring; use your findings to continuously improve your program. Understanding your program’s ROI can also help you get and sustain leadership buy-in. This can be particularly useful during periods of economic downturns or recession, when your company is looking to cut costs and early talent programs may face the chopping block.
Invest in an all-in-one internship management platform
Planning and executing an internship program comes with a ton of moving parts. Keeping track of your program and KPIs on multiple tools and spreadsheets can be hectic and time-consuming. Things can easily fall through the cracks. Cut to the chase, and invest in an all-in-one platform to consolidate program management and data analytics, save time on administrative tasks, and develop repeatable processes, so you can focus on what matters most—your early talent.
Organizations in the energy industry should think about rebranding to change how early talent views the sector, focus on attracting and developing this talent, and transforming the workplace to foster greater innovation. This entails investing in early talent programs like internships and apprenticeships, and making use of cutting-edge technologies to increase your competitiveness when recruiting the next generation of workers.