Power Plant Personnel: The Outsourcing Option

Issue 3 and Volume 114.

By Nancy Spring, Senior Editor

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Inside Westar Energy’s 665 MW natural gas-fired Emporia Energy Center in Emporia, Kan. Photo, Westar Energy.

Utilities have been concerned about the shortage of skilled workers for years. Today, the aging workforce issue has been somewhat tempered by the economic downturn but the problem hasn’t gone away.

Some projects have been put on hold or cancelled, so new hires aren’t needed. On the coal side, many plants are only doing the required clean air upgrades because demand is low, said Mike McMahon, president of the engineering, construction and maintenance group at Day & Zimmermann, and some plants are even being “parked.”

Nuclear power plant construction has its own set of issues, among them the low price of natural gas. “You cannot justify building anything but gas,” said McMahon.

Some older employees are staying on longer than they had anticipated as they wait for the economy (and their 401k) to improve, said Paul Fergus, senior account manager at PIC Group Inc. This has helped the major utilities out for the short term, but eventually a shortage of employees will occur.


The Demographics


More that 50 percent of the workforce is age 45 and older. The people replacing today’s retirees are getting younger and younger, said Rita DeHart, president of Reliant Engineering, PA. Reliant Engineering has been designing training programs for industrial and power generation facilities since 1997.

DeHart taught a heat recovery steam generator (HRSG) class in 2000 at a plant site and the first audience was shift supervisors and experienced control room operators in their 50s. “By the time a year had gone by, the age had dropped dramatically as they hired new people.”

Employees are being brought up to speed faster than in the past, too.

“A power plant employee can reach the control operator position a lot faster than it would have taken years ago when people were promoted by experience,” said DeHart. “You miss out on a lot of experience only time can give you.”

Gary Mignogna, president of Areva DZ, a joint venture between Areva and Day & Zimmermann, said it’s difficult to find superintendent and foreman-level people, craft people and enough of the more experienced professional site management people because there is a gap in the workforce of 35- to 45-year-olds.

“That’s when most people are in their prime for those kinds of positions and that’s where the demographic is the lowest,” said Mignogna.

The skilled crafts jobs pay well. With proper training, welders, pipe fitters or electricians can be making $60,000 to $100,000 a year before they’re 25 years old. Areva has become active in training and college programs and has developed mentoring programs for younger workers.

“Still, five years from now there will be a big demand that won’t be easy to meet,” said Mignogna.


Why Outsource?


Power generators have a number of options available to help them fill their workforce needs, including outsourcing recruitment and hiring to companies that have developed their own networks of skilled workers.

For example, a mid-sized utility in the Midwest hasn’t built a power plant in 10 years, said PIC Group’s Fergus, and lacking the necessary people for that single project but with no plans to build another power plant for years, it doesn’t make sense to hire for a two-year period and then let the people go. PIC is providing staff augmentation for all the utility’s project construction and startup management.

Sometimes seasoned, skilled workers are needed immediately for a short time. PIC has been tracking everyone who worked for them for the past 12 years, so the company can recommend people quickly to fill available jobs.

Different kinds of skills and expertise are needed in today’s utility industry. For example, environmental compliance positions are in demand now, especially in California, said Brian Smith, Edge Dynamic business solutions executive. Environmental, health and safety (EHS) managers and environmental technicians also are in demand.

Where there used to be three positions—operations (control room or plant operators), maintenance technicians and instrument and control—Smith has seen a consolidation. “Plant managers are looking for one person who has experience maintaining and operating the instrument controls at the facility.”

While the economy has slowed demand for electricity and some power plants have cut back, Smith said because there’s a small pool of people with the right skills, there usually is a job waiting if a person is willing to relocate.

“I would say for 80 to 90 percent of the positions we fill for direct hire for permanent positions we are relocating someone and that number is 95 percent for contract work,” said Smith.

Many power generation and utility companies offer good relocation packages. Finding the right person is the hard part.

“We headhunt,” said Smith. “Every day my job is networking, talking to the plant managers, knowing who is available and who is looking. I talk to hundreds of people a week and that would be hard for an HR department to do.”


Variety of Services


A survey of some of the top personnel companies working with power generators reveals a variety of options and services.

Aerotek Inc. provides full-service staffing solutions throughout the U.S., including nuclear, fossil and delivery and business services within the utility sector.

Skills that are currently in high demand include engineering and project management for both transmission and delivery. In addition, engineers with renewable energy experience have increased in demand over the past year.

Aerotek’s recruiters have built a network of current and former contract employees in the energy industry. Aerotek recruiters fulfill most openings through referrals of current, former and potential contract employees.

Many utility workers are working a few extra years toward the end of their careers, while others are coming back to the workplace as contract employees. This delay in retirement within the industry is a temporary fix to the increased demand for qualified workers. To meet this demand, colleges and universities are currently investing in curriculums specific to power and energy. This investment could have a positive return within the industry.

Aerotek Energy Services recently placed a team of engineers and designers at a nuclear power plant to work on a service water project. The team was responsible for developing solutions and providing detailed engineering design packages to resolve a long-term sewer water system issue.

Areva DZ, a joint venture between Areva and Day & Zimmermann, offers engineering, construction and maintenance services to the U.S. nuclear utilities sector. In October 2009, the company announced a 5-year exclusive alliance with the Tennessee Valley Authority (TVA) to provide specialized services to TVA’s fleet of nuclear power plants. Areva DZ will provide boiling water reactor (BWR) and pressurized water reactor (PWR) refueling services, outage optimization, specialized non-destructive examination services, parts and materials and PWR refueling tool maintenance and steam generator services.

Day & Zimmermann specializes in maintenance and modifications of nuclear and coal plants, said engineering, construction and maintenance group president Mike McMahon. “We have a construction capability that is defined by major modifications to existing power plants; we are not into building new plants at this point.”

D&Z services more than 50 percent of the U.S. nuclear power plants. The company’s workforce is transient; workers must be willing to travel, not just relocate. Most projects run from 30 to 90 days, with employees going from outage to outage for four months in the spring and four months in the fall. The company typically employs between 3,000 to 5,000 people. During the peak outage seasons in spring and fall, that number swells to 20,000.

“We have access to a workforce that is nuclear qualified and experienced and we keep a record of those qualifications,” said McMahon.

D&Z typically take on alliance-type work: multi-site, system-wide agreements with clients, based on long-term relationships.

“We have been doing the maintenance at the western half of TVA’s fossil fleet since 1995,” said Brian Hartz, senior vice president, business development. “They decided to entrust their nuclear fleet to us and continue to do the fossil maintenance.”

Recently, D&Z has been involved with TVA’s Watts Bar, a nuclear plant that was mothballed in the mid-80s when more than 90 percent complete. TVA has decided to complete construction.

“It’s a really significant project, to put a new nuclear plant on the grid,” said Hartz. “Construction of nuclear plants is a lost art. Processes and procedures and people’s expertise has been lost and it’s a challenge to recreate.”

Edge Dynamic Power Source works with all kinds of power plants—nuclear, renewables, natural gas, coal and hydro—to provide contract staffing, direct hire, payroll services and training, construction and startup, retrofitting and design and engineering prior to construction.

One position that is always in demand is instrument and controls (I&C) for engineers and technicians, someone who can design the control systems that run the plant and install and maintain them. “It’s a big niche,” said Brian Smith, business solutions executive, “everyone is always looking for a good I&C technician.”

Smith worked with a large combined cycle facility in the Southeast that was equipped with GE 7FA gas turbines and GE D11 steam turbines and used GE Mark controls. He found someone with the right experience who the company hired.

Irwin Industries is a leading industrial construction and maintenance company serving the power generation industry. Irwin’s power plant services business unit primarily serves coal-fired generation, providing supervision and craft manpower for major boiler overhauls, from waterwall tube and header replacement to air quality management system installation.

Tube welders, because of their highly specialized skills—such as “buddy welding” and “mirror welding”—along with the great scrutiny paid to their work by authorized inspectors using x-ray, linear-phased array and other testing methods, are always in demand. Likewise, experienced project managers capable of successfully managing the stressful demands of overseeing safety, quality, schedule, budget, client relations and so on, are a rarity in the industry.

The company’s two main approaches to developing key management and field staff are developing talent from within the company and committing to be the employer of choice through a combination of competitive wages and benefits, development and advancement opportunities and an engaged and supportive company culture.

Staffing projects with a sufficient number of qualified craft professionals—until recently, a great challenge for the industry—has eased over the past 24 months. As a result, previously skyrocketing wages have stabilized.

In recent years, ever larger scopes of work have been shoehorned into ever shrinking project schedules. This trend has necessitated a stronger focus on upfront planning and scheduling, development of more timely and effective project controls and the documentation and dissemination of lessons learned following each project.

“In our experience, power generation companies typically staff their facilities with employees who are highly knowledgeable about plant operations and day-to-day maintenance but may not have the experience or resources necessary to undertake a major boiler overhaul with a large scope of work and a tight schedule,” said Adam LeVrier manager, marketing and communications.

Irwin crews are currently performing six large-scale outages at power plants across the U.S.

PIC Group Inc. provides services to the power energy industry ranging from operations and maintenance to installation, outages, startup and commissioning and project support services for utilities and non-utilities. PIC also works with contractors and small municipalities, OEMs and major EPCs.

“We are helping to recruit and staff for the entire company, which can be anything from high level management positons to engineers to the craft level,” said Dawn Gehring, director of staffing and recruiting services. “Probably the most difficult to find is the well-qualified and skilled manager level and the craft level.”

PIC tracks more than 5,000 people every month, whether they are working for the company at the time or not, to know who is available and who has the right skill set.

PIC doesn’t staff permanent positions, but provides personnel who move from project to project. The company said it recruits by networking. Referrals from key employees on a job bring in new people.

Recently, PIC won a contract to supply 60 percent to 70 percent of the workers for a large coal-fired power plant project. The utility had decided to take an active role and not use an EPC. Instead, it broke the project into four contracts and retained PIC to help secure needed manpower.

ProEnergy offers a range of contract, direct hire and contract-to-direct hire services in support of the company’s customers in the power industry.

“The acronym DECCO (design, engineering, construction, commissioning and operations and maintenance) defines the stages of personnel we provide,” said Al Simon, vice president of professional services. “We also support our customers in the global marketplace.”

ProEnergy has found that transmission and design engineers, high voltage technicians and linemen are the positions most in demand, while the industry still urgently needs technical advisors, schedulers and entry level plant staff.

“Having a global work force, we find the majority of our people through word of mouth, standard recruiting methods and a referral system,” said Simon. “In addition, we have an internal database that supports our global operations.”

Simon said the trends he’s tracked over the past five years include the aging work force, the lack of funds to hire and train entry level people or support apprenticeship programs and increased use of automated vendor management systems (VMS).

“More and more utilities are turning toward VMS and that adds one more hurdle to supporting the customer directly and removes the human element of communication with the customer,” said Simon.

One of ProEnergy’s more recent projects involved supporting a utility customer to ensure the owner’s projects were built to specification, including local and state permitting, schedule, quality, safety and reliability.

Reliant Engineering has been designing training programs for industrial and power generation facilities since 1997, with a focus on boiler training programs, system descriptions, operating procedures, equipment assessment and boiler operator certification. Reliant Engineering also prepares documents such as system descriptions and operating procedures and integrated flow and control diagrams.

The company recently completed a set of the piping and instrumentation drawings for a large pulverized coal-fired plant and provided wet flue gas desulfurization (FGD) training at two different power stations. Reliant Engineering President Rita DeHart said she is making preparations to do more wet FGD training in May.

Strategic Contract Resources (SCR) provides human capital in the form of direct-hire candidates and project-to-project consultants to utilities and supporting vendors.

“We have experienced heavy demand over the past year at all levels and disciplines,” said David Huckeba, director of power project personnel. “This includes operators and maintenance personnel, engineers, middle and senior plant management.”

SCR finds that candidates can be identified only through focused penetration of the company’s networks of actively employed personnel. This has been accomplished through proactive actions such as memberships in industry associations, investment in tradeshows and exhibitions and “reaching out” to successful industry personnel.

“Success in recruiting and staffing necessitates constant communication and interaction within the power industry,” said Huckeba. “We view ourselves as knowledgeable industry participants along with being well-trained recruiters/staffers.”

SCR sees a trend toward reductions in experienced talent as the workforce ages. While some companies have made an effort and prepared for the upcoming talent vacuum most have not invested in recruiting and training the next generation of power industry worker. In agreement with many industry experts, SCR predicts a deficit of available talent is looming.

Currently, SCR is finalizing the start-up of Constellation Energy’s Hillabee Project. Constellation bought the project and brought it out of mothballs, said Huckeba. SCR supplied the construction manager and several of the startup team members including the start-up manager, lead electrical, lead mechanical and other positions.

SCR has placed direct-hire candidates as plant managers, engineering managers, O&M managers, shift supervisors, environmental directors and other power industry-related positions.

Think Energy Group is an energy-focused division of Think Resources, a Randstad company. Think provides staffing services to electric utilities including direct-hire, temp staffing, payroll services, vendor management and managed services.

“In 2008, we saw the most demand for a variety of different electrical engineering positions, however in the last quarter of 2009 demand shifted to project managers,” said Mike Bradbury, marketing manager. This supports findings of a recent survey of 2,300 clients, which indicated that signs of hiring growth are beginning to appear. Historically, when companies begin hiring project managers, new positions for engineers and technicians are not far off.

As an engineering staffing firm with access to a database of 2.8 million technical candidates, finding the right candidate hinges on getting the word out to the right people, usually electronically. But twice as often as any other medium, the right candidate hears about the opening because of the relationships he or she builds with Think recruiters by phone or e-mail, said Bradbury.

Although overshadowed by recession, a labor shortage continues to loom for the energy industry. Think Energy helped staff-up a Midwest greenfield power plant EPC project, providing several construction specialists for the following areas: project manager, construction manager, project controls manager, QC manager, safety manager, lead superintendent, construction field engineer and materials manager.

“Our consultants helped ensure that the project was completed on time and under budget and we were able to identify some local talent to help provide jobs to the local community,” said Bradbury.

The United Brotherhood of Carpenters offers its utility customers a skilled workforce on an as-needed basis. Members possess skills to install, maintain, modify or repair mechanical equipment such as bulk conveyors, ball mills, pumps, compressors and rotating equipment including turbines and generators, regardless of fuel.

“Our union is a recognized leader in the green energy industry with respect to training, installation and maintenance of solar, wind, hydroelectric and geothermal units,” said William G. Luddy, director, special projects.

Technical direction, project managers, field superintendents, foremen, experienced turbine millwrights, millwright machinists and apprentices are in high demand. “We believe that our superintendant and foreman training helps our signatory contractors manage projects more efficiently, saving the end user time and money and increasing demand for their skills,” said Luddy.

The Carpenters Union is interested in recruiting good men and woman. Its “Helmets to Hardhats” program offers veterans returning from duty union membership and training to help them transition into the civilian workplace.

“We visit vocational schools and high schools to explain what career opportunities are available with our union,” said Luddy. “We also help maintenance workers displaced by plant closures put their skills to productive use.”

Luddy said there has been an increase in the number of utilities deferring scheduled outages and offering retirement incentives to older workers, which causes a shortage of skilled in-house mechanics.

“Our signatory contractors are called in more frequently to supplement the in-house workforce with our skilled, motivated workforce,” said Luddy. When the job is completed the contract personnel leave and the utilities save money by not having additional staff on the payroll.

When Day & Zimmerman NPS was awarded a 5-year maintenance contract recently for the Dominion nuclear power plant in Waterford, Conn., the company called the Northeast Regional Council of Millwrights and requested millwrights to work directly for plant supervisors and personnel to help complete assigned tasks. When the project was completed, the UBC millwrights left the plant for assignment with another contractor.


The Benefit of Flexibility


The outsourcing option gives utilities flexibility when it comes to hiring power plant personnel—and helps them avoid having to let people go after a short time, said PIC’s Fergus. “That’s not the utility model: they hire people to work with them for 30 years.”

Flexibility is a benefit for the workers, too. They get to choose where and when they work—and then take a vacation.

As the economy improves, demand for skilled workers will ramp-up and the industry should be prepared, said Areva’s Mignogna.

“We have to have a workforce cultivated so that we can build for both new construction and the existing plants.”


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