Succession Planning For A Vital Workforce In The Information Age March 28, 2006

Transcription

1 Succession Planning For A Vital Workforce In The Information Age March 28, 2006 Myron Olstein Director Black & Veatch 2005 Awwa Research Foundation. All Rights Reserved.

2 Take Home Points Half of your workers will not be with your utility inside of 10 years Most of the useful operating knowledge will go with them You ll probably be hiring from the bottom of the labor pool ¾ have made no plans for this event Your owners have placed obstacles in your path

3 Why The AWWARF- WERF Study Generational change Average age of the workforce is increasing Utilities are becoming more technologically complex requiring more skilled workers Pool of competent workers is shallow Retirements will result in the loss of valuable knowledge

4 Study Scope Assess workforce demographics Identify future shortfalls in critical and technical skills Provide guidance for creating a succession strategy

5 What We Did Analyzed workforce demographics Surveyed utilities for demographics and H.R approaches Developed Knowledge Management Toolkit Developed and successfully piloted Knowledge Capture Piloted water and wastewater operator training curriculum development Developed a Workforce Planning Model

6 We Also Did Becoming an employer of choice Minority recruitment O&M Skill Sets Leadership Succession

7 How We Did It Formed a Utility Advisory Group Howard County Louisville Water JEA Phoenix Dallas Henderson Pilot utilities Howard County MWRA Louisville WSSC County SA Frederick

8 How We Did It. Analyzed Bureau of Labor Statistics Data and related studies Surveyed 570 utilities 126 responses Worked with pilot utilities to develop specific products

9 Workforce Demographics - Quickscan U.S. workforce is getting older; utility workers are 3 years older than U.S. average Workforce is getting more diverse; utilities (in the aggregate) reflect this diversity Females near parity in the U.S. workforce; substantially underrepresented in utilities U.S. born workforce is getting smaller, growth is coming from immigrants Production of engineers is declining, demand is increasing Largest growing segment of the workforce is over 55s

10 Workers Retire Shortly After Reaching Eligibility and Have Worked For The Utility A Long Time When They Retire This is the experience of one utility 243 retirees, 6% disability retirements 2 of those years had early retirement incentives can you tell which? Another sample of 400+ retirees over 3 years average age 56+, years of service 24+ Water utility average # of years to retirement eligibility 12.5 years Year Age Years of Service

11 What Does This Mean For Utilities? You re Going To Have To Do Something Very Soon, But There Is No Single Answer Your new workers could be Gen Ys,, they could be Millenials,, they could be immigrants, they could be over 55s In rustbelt cities diversity means African- Americans, in border cities diversity means Hispanic, in West Coast cities it could mean Asian The only way to know is to develop and implement a Workforce Planning Model that reflects your labor market

12 Workforce Planning Model SWOT Environmental Scan Strategic Plan Knowledge Management SCAN Workforce Supply Change Management Training Recruit Retain Leadership Action Rightsize Supply&Demand Workload Demand Competencies Skills Positions Organization Staff Excess/ Deficit Benchmark

13 Workforce Planning in 12 Easy Questions 1. How do we stand from and internal and external standpoint? (Strengths, weaknesses, opportunities and threats) 2. What will the external environment of the future (the one we will have to succeed in) look like? 3. Given this internal and external evaluation, what are the major focus areas and goals for those areas that we need to have to be a successful organization?

14 Workforce Planning Questions 4. When will our existing workforce retire? Most baby boomers will not want to discuss this and this may not be a proper subject for you to bring up, but you can have HR do a retirement run. In our surveys of recent retirees, we found that, on average, people retire within about one year of reaching eligibility.

15 Workforce Planning Questions 5. Given our forecasted workload (derived from the strategic plan) what will our workforce demand look like? This is a relatively simple forecast at this point our next four questions will address issues of competence, organization and efficiency. 6. Given the view of the future (from the strategic plan) what competencies will we need to be successful?

16 Workforce Planning Questions 7. What will our desired organization of the future look like in terms of staffing levels and competencies? 8. Given that view of the future what are our staffing and competency excess/deficits year by year going forward? 9. Using task and organization analysis what will the organization look like year by year (positions, skills etc.) as we transition to our organization of the future?

17 Final Three Questions 10. How do we retain the people we want, recruit the people we need and develop leaders to replace our leaders as they retire? Research shows retention is easier when there is a succession plan in place. Remember you will be recruiting from Millenials (a later slide will review generational differences) Leadership development involves internal and external activities, training, feedback, coaching and mentoring as well as self directed development (more details later)

18 A Quick Look at the Generations Boomers teamwork, work and optimism Gen X sek-reliance, diversity, technological literacy Millenials civic duty, sociability, achievement

19 What Will the Future Workforce Look Like? More diverse whites approach minority after 2050 More female females currently represent 20% of water and wastewater utility employment; 47% in the national workforce and rising Pockets will be older over 55s will be 20% of the workforce in 2020 Immigrants will be a factor the growth in the national workforce comes from foreign born

20 Last two questions Have we planned to manage this change? Have we identified all of the programs we need to put into place (next slide) Will we capture essential tacit knowledge from our people before they leave? Do we have a plan in place to manage knowledge going forward?

21 Coping With The Transition Succession planning have candidates to fill vacancies as key personnel leave Use Recruitment, Development and Retention to Build Talent Pool Develop and implement a leadership development program Implement a Knowledge Management Program

22 Succession Planning KM Tools Stories Vectored Tours Knowledge Chaining Respect Broadcasts Continuation Conduits De-structuring the Culture Incentives

23 What If You Don t t Have Enough Time? Knowledge management is an important component of the management process but it will be of limited use if, for example, all of your first line supervisors will retire within six months. To deal with this situation the project developed a procedure which we call Knowledge Capture a process of identifying and capturing the most important tacit knowledge

24 Knowledge Capture Methodology Identify all processes steps with a beginning and end, inputs and outputs, customers and suppliers. High level risk assessment documentation, impact on other processes, urgency (will it get worse if not resolved quickly) Develop knowledge map Perform Failure Modes and Effects Analysis (FMEA) Document and transfer knowledge

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26 One Solution To This Problem DC WASA Combines Knowledge Capture and Replacement Planning Identify all processes Rank processes by risk Do Knowledge Capture of highest risk processes Identify competencies required by process Identify possibility of loss of existing employees with needed competencies Identify candidate replacements If needed, document requirements for replacements

27 Remember - Your utility needs a workforce plan That plan must be unique to your utility The tacit knowledge loss will hurt more than you think it will Work to improve training

28 Questions before I retire? Call or e olsteinma@bv.com