Nine out of 10 power and utility executives say their organizations lack enough technology-savvy employees needed to keep pace with an ongoing digital revolution across the industry, the results of a 2021 global survey show.
The survey, conducted for Ernst & Young LLP (EY), found that 94% of the 159 executives polled said they need to make ongoing investments in digital capabilities and their tech workforces, but they worry there may not be enough talent available.
All industries are increasingly adopting digital tools and platforms, but the power sector faces particular pressure to capitalize on tech to lower carbon emissions and advance renewable energy sources. The EY survey included 59 executives whose companies include natural gas operations.
“The low-carbon energy transition will create new roles that require different skills or reskilling, and a utility’s agility to adapt and respond to the unknown will become even more critical,” said EY’s Cyntressa Dickey, energy and resources leader for the company’s Global and Americas People Advisory Services division.
“The number of disruptive threats continues to rise, the number of nontraditional competitors continues to grow, and technology is developing at the most rapid pace in history,” Dickey added. “Digital adoption and investment without an accompanying skilled workforce will not result in the desired benefits or returns.”
The EY survey found more than 90% of executives said they will be changing their mix of energy sources and adapting to changing consumer and investor expectations for a cleaner energy economy over the next few years.
Executives estimated that, in addition to hiring new talent, nearly 60% of their existing workforce requires “reskilling or upskilling” to make the shift. However, only 41% would acquire needed training under current plans, the respondents said, with an average education time of 7.5 months and $4,650 in costs per employee.
While 85% of executives said tech training is essential to their success in the next three years, only 57% said they have a strong plan in place to provide that training. What’s more, many executives don’t know where skill gaps exist. A third of those surveyed said they cannot measure the gap between the skills they have and what they need. Additionally, two-thirds report having difficulty retaining those with in-demand skills in their workforce.
“Utilities can be the linchpin of a decarbonized economy, if they can effectively execute a plan for digital and develop the workforce to support it,” said Ryan Levine, an EY principal. “However, failure could make them lose market share and become a prime target for disruption. Utilities will need to embrace a human-centered approach to develop a digital mindset and integrate technology across the enterprise to serve customers more efficiently.”
EY researchers recommend:
- Set a strategy for transformation: Take a comprehensive view of needs and resources to prioritize efforts strategically and make investments in tech talent. “If you wait to invest, you will likely sacrifice talent to more proactive sectors,” the EY team said. “Skills, adaptivity and continuous learning cultures will be a competitive advantage.”
- Develop an accurate understanding of your employees’ current skills and potential. “What systems are necessary to begin to consistently and accurately measure those levels? This is crucial for understanding where gaps exist between your digital and skill investments,” researchers said.
- Answer these questions: “What tools, partnerships and other resources exist or are available to aid in this transformation, and which still need to be identified, forged or acquired?” To encourage staff to pursue training, the EY team said, “you can develop recognized accreditations such as learning badge programs and create curricula that curate open-source learning materials that align with on-the-job learning experiences.”
- Identify and eliminate roadblocks to change: “What structural and cultural barriers exist in your organization? These can include a lack of leadership support amid competing priorities, general resistance to change, entrenched values and mindsets, and governance and organizational design elements that hinder flexible, rapid decision making and innovation.”
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