According to a recent study by the American Water Works Association, an estimated 50 percent of the U.S. utility work force will be eligible to retire within the next 10 years. This inevitable exodus from the workplace, current hiring freezes, and long-term flat employment growth have presented a new challenge for the public sector: a lacking future work force. As such, succession management has become a valuable tool in helping utilities address their impending work force shortage.
Succession management is a set of resources and development strategies that organizations can use to meet their future work force needs. It incorporates a staff resources strategy, staffing analysis, job and skills analysis, management and employee development, and performance optimization.
Because the changing work environment is very complex, no single "program" will adequately meet the challenges at hand. Instead, a sound succession management strategy is composed of four elements that can be customized to a particular organization:
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Succession practice assessment: Using an analytical model to assess current practices is an important first step. Once identified, existing elements can be more effectively integrated, weak practices strengthened, and missing practices developed.
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Work force resource analysis: This analysis evaluates organizational goals/objectives, projected needs, skills, and gaps.
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Work force resource strategies: Succession management strategies, such as improved retention plans, targeted training and development programs, and knowledge retention systems, should be developed in response to the resource analysis.
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Operations and maintenance (O&M) optimization: Work force demographics will become a driver for improvement in O&M practices. O&M optimization should include staffing plans and strategies and link performance initiatives to succession needs. Possible initiatives include competitive utility operations benchmarking, asset management, and business process modeling.
As the work force continues to change, strong succession management practices can facilitate a seamless transition into the future. A partnership between an organization's Human Resources and an external consultant can be very useful in quickly developing cost-effective solutions that allow utility management to provide succession management strategies that solve difficult work force issues and serve the ratepayer's long-term interests.