By: Steve Blankinship, Associate Editor
The job openings on this page are typical of the more than 550 job listings currently appearing on Think Energy Group’s web site. The Atlanta-based staffing firm is one of close to a dozen companies focusing almost exclusively on recruiting employees for the power industry. Although many in the power industry are already worried about finding qualified people to build, operate and maintain power facilities, there is reason to believe it could get worse. The industry’s workforce continues to age, while the number entering the field remains flat. One of the reasons: The U.S. is about halfway into a 20-year period between the prime productivity age of Baby Boomers and Generation Y.
Carl Mycoff, president of Mycoff & Associates, a power industry executive search firm, says utilities must find new workers and train them. “Within five to 10 years, executives, key leaders and even experienced personnel will not only be rare, they may not be available at any price,” he says, referring to the 20-year Baby Boomer/Generation Y gap during which birthrates dropped dramatically before picking up again. “We are presently in that critical period where there will not be enough people to provide services.”
To complicate the situation, interest in new coal-fired capacity, refurbishment of the existing coal fleet, and upgrading the aging nuclear fleet has the power industry struggling to fill a greater number of challenging jobs with people possessing some of the hardest-to-find skill sets in a shrinking talent pool.
That’s good news for recruiting firms serving the power industry, such as Think. “We’re going like gang busters,” says Bob Podsiadlo, vice president of sales and marketing for Think. “And there are companies taking advantage of the current pause in new construction, doing some bargain hunting and finding some very talented people available that are ready to make a move.”
But the people most in demand may not be exactly the ones who topped the most-wanted list several years ago. “For years, building a new power plant meant placing a slab, obtaining
the components needed for a gas turbine plant, bolting everything together, and starting it up,” says Steve Copeland, a recruiter at Think. “Now we may have to go out and find people who can hang a boiler at a new coal-plant or have the welding skills required to replace a nuclear reactor head or steam generator. Things are getting tougher.”
Mycoff expects his business will increase as more baseload coal fired plants are developed. “Interestingly, this happened in the early 1970s when I was recruiting for an engineering firm,” he says, “At that time, just as today, there had been a 20-year lag in baseload coal-fired power plant development.” Although the incentives for building coal then (the need to reduce oil-fired generation and meet annual demand growth ranging from 7 to 10 percent) are different from those now (concerns stemming from gas prices), he sees a similar staffing quandary.
“Back then, experienced coal plant engineers had 20 to 30 years of experience and were in their 50s. The same can be said of today’s experienced coal plant engineers. If the coal-fired plants being considered enter the construction phase, I suspect we will find a shortage of experience just as we did then.”
Robert Korey of Onsite Energy Services, a national staffing provider for the power industry, views the situation more in terms of finding the best person for a job rather than just finding someone for it. “Like anything else, there are different grades of personnel and just because there are some people there doesn’t mean they are your best choice.” He notes a trend toward big utilities and contractors creating their own staffing companies with the intent of reducing overhead costs, but points out that such organizations are not always capable of finding a person with a specific skill set they may suddenly need, such as a gas turbine technical advisor. “When those needs come up, they generally come to a company such as ours,” he says.
Korey points to another benefit firms such as Onsite can offer utilities — reduction and streamlining of so-called “maverick spend,” the practice by many power companies of spending money on vendor services with no managed program to track and control costs. “We have had customers that used to employ numerous staffing companies and had no way to trackspending on the level of staff augmentation. After we became the exclusive vendor, clients were able to minimize maverick spend and leverage a premium rate based on volume. We have seen customers reduce their staffing vendors from as much as 35 to only one and, based upon the net average of the customers we have worked with, we have seen savings of $2.4 million per year.”
Where Will the Talent Come From?
Unlike historical utilities, the owners of today’s gas turbine plants — the IPPs — have not brought people in cold and trained them from the ground up, says Ed Venglik, senior account manager for Think. “They want to bring them in ready to go so they can start making money fast. Yet we have seen an instance where a company brought in a handful of top-notch operations people who, in turn, brought in some less experienced ones and trained them.” Podsiadlo says that, particularly in rural areas, IPPs have found people with experience at local industrial plants who came in under top power plant management, learned the business, moved up, and expanded the talent base.
Korey sees many of the needed trades-oriented and “hands-on” personnel coming through the grapevine. “Some member of their family was in the business. They are mechanically inclined and naturally gravitate toward power. And we still find people from the Navy who have worked on auxiliary boilers and heavy diesel units in the military or have attended the maritime academies.”
Yet overall, things aren’t getting better in terms of qualified people entering the power industry workforce, according to Podsiadlo. “It’s going to be a mad scramble to find them. The schools and universities are just not picking up on this. Perhaps they are clinging to the hope that the way to make a quick buck is in the IT flash-in-the-pan stuff. Because in the education community in general, I guess they don’t look at the power industry as something that has a lot of sizzle to it.”
That seems odd when one considers that an auxiliary operator at a gas turbine plant can command $28 to $30 an hour. That translates to a salary in the range of $50,000 to $60,000 per year before overtime. “With fairly typical hours over 40 per week, operators can make $90,000 a year,” says Copeland. And they can work just about anywhere they want.”
That’s because the dawn of “plug and play” gas turbine plant technology has brought about a fundamental change in the industry, namely, a remarkable standardization of plants and plant jobs. The utility sized power plant of the 1970s and 1980s was, for all practical purposes, custom built and operated by large staffs of utility-nurtured employees brought up slowly through the ranks to gradually achieve mastery of a particular plant. That’s not the case in today’s independent power industry, composed largely of simple and combined-cycle gas turbine plants.
“We are seeing increased mobility of the workforce due to the standardization of job functions within gas plants,” says Copeland. “Operators and auxiliary operators, I&C technicians, shift supervisors, watch engineers, operations superintendents, turbine operators – all these people can move from one plant to the next and from company to company for a few extra bucks. And they do”
True enough for gas plants, says Podsiadlo. “But not if you’re talking about coal-fired facilities. The way each plant is run is unique. It’s like saying you can drive a vehicle, but can you drive a steam locomotive?”
As a result – or perhaps an element – of the 20-year Gen X gap, Korey notes that utilities now tend to have new employees and old employees. “One group has been there five years and the other 30 years, but not much in between. The 40-year people have left. The 30-year people are staying around due to uncertainties about the future. And the trend for those in between has been to learn at the utility level, then move on to something that pays more. There are lots of places out there for them to go, including OEMs and power plant application software companies. The problem for utilities is that it takes about three of the younger employees to have as much knowledge as one of the older hands.”
Seasoned Experience Needed
A renewed interest in coal will increase the need for such older hands. “It will be interesting because we’re going to be pulling some very senior people who have built coal plants in the past and ask that they provide some engineering and leadership skills to get these plants developed and built,” says Copeland. “This isn’t the off-the-shelf, bolt-together gas turbine stuff. We’ll need civil and structural engineering along with a tremendous amount of mechanical and welding expertise that gas plants just don’t demand.”
Industry staffing firms agree that such a transition, along with the current trend of coal-plant environmental upgrades, is fueling their business. “There’s not a lot of coal-fired talent available these days and they constitute the older part of the talent pool,” says Copeland. “A company that wants to build a coal plant can’t just post an ad on the Internet to get a qualified person. They will need resources like us. And the supply/demand ratio will lead to some high salaries.”
He says coal work is coming in, with plants being sited, permitting underway, engineering being let, and construction and procurement contracts being signed. And coal plant projects, either new or existing, entail a tremendous amount of environmental work. His company is currently trying to fill a position for a project construction manager who will be responsible for all environmental projects for a northeast utility. The job would pay as much as $140,000 a year.
Copeland is seeing nuclear work trickling in too because so many units are aging. In addition to the replacement of reactor heads and steam generators, there is a transition from old pneumatic controls to electronic and digital control systems. “Those projects take a good many people and a lot of years to do,” says Copeland. “So even a small shift in the nuclear business is significant because these people were trained in the 70s and now we’re trying to find them again.”
Think Energy also sees customers bowing to the pressures of the capital market by stretching O&M dollars and maintenance schedules like never before. Generally referred to as “performance engineering,” the idea is to spend small amounts of money to minimize operating costs. “So we’re seeing a demand for people who can figure out how to do that,” says Copeland, “such as targeting capital at getting better heat rates and more efficiency out of a unit. Or getting units up to the higher power levels that translate into lower costs per kilowatt-hour.”
Top 10 Requested Disciplines for Power Generation Facilities
1. Control Room Operator
2. Instrument & Control (I&C)/Instrument & Electrical (I&E) Technicians
3. Maintenance Mechanics
4. Auxiliary Operators – Inside (Control Room) and Outside (Facilities)
5. Electrician – Journeymen/Craft Labor
6. Plant Engineer
8. QA/QC Engineer and Estimator
9. Environmental Health & Safety (EH&S) Manager
10. Procedure Writer
Note: Disciplines derived from non-nuclear power generation facilities in operation. List does not include plants during construction, start-up or commissioning.
Source: Onsite Energy Services
Using a Little Psychology
A little psychology can help retain needed employees, thus reducing the need to go out and find new ones. Faced with the need to quickly train a new generation of senior managers, electric utilities including Entergy and Exelon are drawing upon corporate psychologists to help prepare their key managers for eventual succession and help their companies operate more effectively. Paul Winum, Ph.D., of corporate psychology firm RHR International, has implemented psychological programs for Tennessee Valley Authority (TVA) that have successfully cut its nuclear program’s executive turnover in half. The programs also reduced TVA’s need for outside recruiting to only one person between 1996 and 2000.
“When it comes to nuclear power, the lack of new talent and an aging core of top talent is even more daunting than in the rest of the power industry because the traditional recruitment pipeline — the U.S. Navy — is no longer able to supply enough nuclear engineering talent,” says Winum.
By the estimates of Phil Reynolds, vice president of operations support at TVA, the program provided by RHR has saved the agency an estimated $8 million in recruitment costs, search fees, relocation expenses and bonus payments. Only three of the original 65 program participants left the company between its inception in 1995 and 2000.
Reynolds believes the resulting continuity of leadership has translated into improved plant performance. TVA is now an industry leader in the generation of nuclear power, with three of its units in the top ten in the county. He also believes the programs led to a substantial reduction in fines and insurance costs, and resulted in improved bond ratings.