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Can Staffing Needs Cope With a Boom and Bust Cycle?

Issue 4 and Volume 106.

By: Steve Blankinship,
Associate Editor

The reassessments of projected load growth and potential reserve margins have led to announcements of power plant deferrals and cancellations, with most talk centered on the newfound availability of turbine generators and other equipment needed to build additional capacity.

Yet overshadowed by the hardware end of a temporary, quite possibly brief, pause in new capacity development, is the human side of the equation. If more state-of-the-art generating equipment is now available, aren’t more trained, seasoned staff and crafts personnel available too? What about the people who plan, engineer, build, operate and maintain power facilities? What about the sales and technical support personnel who supply and service the industry? Two years ago, such people were hard to find. Does this period of uncertainty for building new capacity present an opportunity for attracting top talent?

J.W. ‘Wyn’ Robinson, president of Marietta, Ga.-based SourceWynds Executive Search, sounds an optimistic note for those firms prepared to seize the moment. “In terms of personnel requirements, the fourth quarter of 2001 proved to be slowest in the past six to seven years,” he says. “But the first quarter of 2002 has proven to be one of the best. Search work is moving toward an all time high as fears calm and needs are determined based upon fact.” SourceWynds serves power industry equipment manufacturers and service providers.

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Robinson says that, while it is true that there has been some impact from 9/11, the Enron debacle, and resultant project deferrals and cancellations, it is not prudent to alter basic recruiting strategies or philosophies at this time. “The vast majority of the most qualified and talented personnel continue to be gainfully employed and only a commitment to proven search strategies will help fill the long-term employment needs of the industry,” he says.

Robinson thinks the best strategy means ongoing recruitment advertising, employee referral programs, industry networking, developing talent from within, and use of third-party search agencies. “The real question now, as always, is whether a company’s vision and plan includes an ability and desire to accurately project work and then retain available talent in anticipation of an expected, planned or hoped increase in need,” he says. “Companies willing to continually invest in attracting talent and then finding a place for the talent until needed have always done well in attracting the best people.”

The most in-demand people right now, he says, work in the areas of application and sales support engineering. “There has been a big increase in the desire to find candidates with a breadth of experience and capabilities,” he says. And he emphasizes that people must be able and willing to take on a wider scope of tasks and duties. Candidates with experience in an array of disciplines are in high demand. Titles in greatest demand include national sales manager, regional sales manager, sales engineer, application engineer, and sales support engineer.

Tommy Thompson is senior director of operations for Fluor Power Services, whose responsibilities include staffing for Turbine Fleet Management (TFM), a newly formed alliance of Duke/Fluor Daniel and Liburdi Engineering that is focusing on integrating maintenance, repair, operations and related services to owners and operators of combustion turbine facilities. Through Fluor Power Services, Turbine Fleet Management is providing craft, technical and management people when and where they are needed. Thompson sees no downturn in demand for key skills in power generation.

“This very competitive market will continue,” says Thompson. “Owners and operators can benefit in time and money by focusing on their markets and letting someone else focus on marshalling the skills and the people needed to support the peaks and valleys of their plant staffing.” Key recruiting and retention themes for TFM are compensation to attract and retain needed skills coupled with long-term stability and benefits.

Atlanta-based PIC Energy Group has seen a shift in a market where a year ago, companies did not hesitate to provide premiums such as signing bonuses, relocation packages, warrants and stock options to attract talent. “During the last six months, however, we have seen OEMs, engineering firms, EPC, and construction companies modify their philosophies,” says Sergio Picon, vice president of business development for PIC. “With such dramatic changes and with greater scrutiny from investors and the media,” he says, “we must ask if this is a time for companies moving ahead with power projects to hire additional proven and reliable employees, or if outsourcing from proven resources is the most prudent approach?”

Picon says it may also be a time to micro focus on the potential that outsourcing can provide. “The call for today may be a return to basics, and outsourcing, allowing a company to focus on its core business,” he says. “Take the development of a power project, for example, and break it down to its basic components: development, engineering, construction, startup and commissioning, and of course O&M. In an effort to sell their core products or services, developers, OEMs and construction and engineering companies have often been asked or caused to wear an unsuitable hat. In yesterday’s market, when opportunities were plentiful, investors happier, and insurance companies eager to secure your assets or bond your project, this added scope was seen as incremental revenue and margin. Today, it’s simply added risk.”

But like most in the power industry, Picon sees the current slump as short-lived. “The economic downturn has had a noticeable effect on the demand for people, but the industry shows signs of rebounding and activity is picking up,” he says. “And with technology changing every day and new and more efficient ways of producing power being developed, there will always be a need for quality people. During peak season, operators are in high demand; during planned shutdowns/outages, maintenance personnel are needed.”

Rick Sparra, president of New Jersey-based Defined Source Cooperative, Inc., supplies personnel on a contract basis for construction, commissioning/start-up and operations of fossil fired projects. The firm offers talent in conventional combustion technologies; and ancillary equipment including controls, heat recovery, pollution control and other areas.

“Overall we’ve seen a very busy, growing market for our services,” says Sparra. “The majority of our customers operate organizations that believe in third party project support in order to smooth their manpower levels. Few of our customers have released home office level project managerial staff from their permanent employee rosters. And we’ve managed to capitalize upon the institution of exclusive alliance partnerships where we provide site level project management staff over construction and commissioning.”

Sparra reports that site project management and specific equipment-experienced mid-level project personnel are in highest demand now. The call for personnel with experience in backend recovery and pollution control is also very high.

Moving Targets Complicate Staffing Decisions

Complicating the issue is the fact that power plants simply aren’t built overnight and it will always be essential that projects be in the pipeline and ready to proceed swiftly should reserve margins narrow precipitously. California went for a decade without building any new capacity before new plants started coming on line last year. Meanwhile, even consumer advocates in Texas, a state widely regarded to have excess capacity, are becoming concerned that the lack of a utility commission-mandated reserve capacity margin could, within a few years, undermine the newly opened retail electricity market’s hopes for low electricity prices.

Major power project players want to be ready to move ahead expediently when necessary. Calpine Corp. has put 34 pending projects on what it calls “hot standby,” stating that although some of the projects might not go forward in the near future, all will complete the complicated permitting processes needed for construction to begin when the economy and the energy industry turn around.

People Shortages Won’t Go Away Soon

Regardless of ebbs and flows in power industry markets, a critical fact remains. There are not enough people coming into the power business to keep place with attrition. “The power industry does not have enough people to replace the current aging workforce,” says Russ Garrity, director of business development for General Physics. “I have seen industry statistics that indicate power generation facilities will lose between 30 and 50 percent of their most experienced workers over the next five years. This means that the people who hold the ‘tribal knowledge‘ of your facility will be leaving in the not too distant future. Furthermore, the availability of a trainable labor pool to replace the boomers is in very short supply and difficult to recruit.”

And while workforce pools are shrinking, says Garrity, workers at today’s power generation facilities must be better trained, more highly skilled, and more flexible in their capabilities than ever. Power companies are operating and maintaining their plants with fewer workers, and therefore new hires must become productive within a very short time.

“In our work as a control systems supplier to the power generation industry, we have found that our customers are faced with the challenge of having fewer engineers, operators and other experienced plant workers who understand the intricate processes of generation in their specific plants,” says Ann Pauley, president of Westinghouse Process Control. “They are telling us they have a need for project engineers and managers with hands-on power plant experience and field engineers for system start-ups and control system tuning. These needs seem to span the nation, with perhaps some greater demand in the East and Southwest.”

Pauley notes that even though the industry is experiencing some delays and cancellations in new construction projects, there are many ongoing retrofits and upgrades. “These don’t necessarily make headlines, but they do mean there is a demand for qualified people. And because utilities are now looking to us for expertise as well as technology, demand is reasonably strong for suppliers. We continue to hire process experts in the field.”

She says their experience has been that power generators are looking for instrumentation and control-based solutions to increase reliability and lower maintenance costs as one means of responding to mandates for lower staffing levels. Retirements are also depleting the ranks of people with long experience in power plant operations. “The loss of process know-how can make it difficult for generators to get the maximum potential from a control system with their internal resources, so supplier companies like ours are now providing part of the knowledge base and the technology to help the plants maximize their operations.”

Long Term Commitment Essential

According to Robinson, in order to attract and retain the best talent, an employer must determine if that’s what he really wants. “That means an honest self-evaluation,” he says. “The answer probably lies in determining what the employer has backlogged, what are the expectations for a change to the backlog and what are the costs associated with having talent on the shelf for these needs. If, after determining those answers, you still want the best, you need to know what it takes to get them and keep them.”

PIC’s manager of recruiting, Tom Hilton, believes he knows the answer. “In recent months, people have tended to be more interested in stability and benefits rather than salary. The benefits package a company provides is used as a prospective employee’s measuring stick. Companies need to fly their banners and provide information that will attract the best employees,” says Hilton. “Also remember this constant. Great employees make a great company and great employees are attracted to great companies. There is one common thread that runs through the whole system and that is the demand for the top 10 percent in any given trade will always be prevalent.”

Adds Sparra, “Our ability to keep our consultants busy offering them a choice of assignments, long-term opportunities within our alliance partnerships, accurately communicating the assignments opportunities and challenges, and then offering full support have allowed us to remain very busy during the industry’s slow rate of growth these past few months. People just want to know that a company is there to support them, at all times and whatever the need. We tend to go the distance and then some when it comes to taking care of our people and our clients. We stand behind our commitments at all cost and without exception. Our overall company philosophy is to maintain high and uncompromising levels of quality, support, and service-whether it be in our home office or in the field.”

The consensus is clear. Talent will remain in short supply and the demand for it will be steady with a definite upward momentum. And while that may present challenges to those seeking people, it bodes well for those being sought and the power industry as a whole. For as long as there remains a buyers’ market for people, a sellers’ market for the equipment and plants can’t be far behind.


Training

New workers within the power industry must become seasoned very quickly. As a result, technology-based training programs – those that use computers and other devices to deliver courses – have become an integral part of most workforce training and qualification programs.


The Westinghouse training facility in Pittsburgh. Photo courtesy of Westinghouse Process Control.
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Over the past several years, the technology used to deliver technical training has progressed substantially. Initially, computer-based training (CBT) courses were delivered using a single PC. The training PC was located at a central location at the plant, and training was available at that specific location based on computer availability and an employee’s work schedule.

More recently, these same types of courses have been loaded onto company-wide intranets, or LANs. This type of system expanded the reach of the training courses to many different locations within a given company, thereby expanding the capability and schedule-flexibility of the training. Today, literally thousands of topics are becoming available over the Internet. A dispersed workforce with varying work schedules can access web-based courses quickly, easily, and cost-effectively.

General Physics recently launched a fully hosted training portal that provides top quality training solutions specifically targeted for power generation facilities of every type and size. The portal contains more than 2,000 individual courses, 2,000 standard tests, and 13,000 individual test questions that can be used to generate assessments. The system also allows a company to assign, evaluate, and track hands-on qualification tests.

Access to GP’s courses and a client company’s own hands-on qualification tasks is through a standard web browser, so no programs need to be installed and updated on company computers. This flexibility allows personnel to train wherever and whenever they can. System administrators and supervisors manage and track training progress of their employees through an integrated learning management system. Annual cost for an employee to access more than 2,000 power plant courses can be as low as $50.00 per year.

Training available through this fully hosted solution include 21 courses on power plant theory and equipment; 86 for mechanics, electricians, I&C technicians, operators, and coal handling personnel; six for senior level technicians; 29 for gas turbine based power plants; 36 on OSHA regulatory compliance; and 16 on EPA regulatory compliance.

“From our vantage point as a supplier and consultant, customers will never operate with the larger staffs they once had,” says Ann Pauley of Westinghouse Process Control. “It is clearly our business model to help fill that gap. Our goal is to provide ways that advancements in technology, along with expertise, can help power generators continue to succeed with smaller and perhaps even less experienced staff. Control system technology now offers power generators the tools to access and manage data that was once collected manually by staff in the field. This can be a powerful performance and maintenance improvement tool. Advanced control software and neural network modeling are additional examples.”

Pauley says Westinghouse has also seen increasing interest in training-based activities, especially in the past year. “Simulators are one tool that can be used to bridge the experience gap,” she says. Designed to the specifications and conditions of a particular plant, simulators can provide “on the job” training without the worry that the plant could trip or miss out on megawatt sales.

“Operators, engineers or maintenance personnel can practice with the plant under specific circumstances to gain experience in how the real plant responds to the variety of factors, including weather and climate, environmental regulation, and age, that cause plants to behave in different ways,” says Pauley. She cautions, however, that as useful as training, simulators, and new technology are in bringing people up to the necessary level of performance, there has to be hands-on experience in a plant to produce a truly experienced operator or engineer.