The power generation and grid sector must endure and embrace forced change with challenges from both inside and outside the companies including cybersecurity threats, the race for new digital tools and an aging workforce.
In many ways, however, the industry is revealing itself as not totally prepared for that transformation.
A new survey report released by EY Power & Utilities indicates that nearly all utility executives see the need for investing in new technology and the evolving workforce. At the same time, though, they acknowledge that an unready workforce and other priorities are complicating their ability to adopt the new technologies.
The EY Power & Utilities Digital Transformation and the Workforce survey, querying nearly 200 utility and power executives at various levels, found that 94 percent agreed on the need for direct investment in technology and worker training. However, more than a third say they are focused primarily on decarbonization, while only 22 percent put digitization at the top of their company’s effective actions.
“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, Principal, Ernst & Young LLP and EY US-East Energy People Advisory Services Leader. “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.”
Right now, though, the industry is struggling to overcome the skills gap, according the report. Nine out of 10 executives who responded to the EY survey replied that too few workers with the needed skills are challenging their ability to adopt the latest digital technologies.
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The EY survey shows that 85% of executives said reskilling is essential to their success in the next three years, but only 57% said they have a robust plan to reskill over the same period, dropping to 48% among respondents in the Americas.
“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 Cyntressa Dickey, EY Global and Americas People Advisory Services – Energy & Resources Leader. “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. Digital adoption and investment without an accompanying skilled workforce will not result in the desired benefits or returns.”
Utility executives in the survey estimate that nearly 60% of the workforce requires reskilling or upskilling. Yet according to current plans, only 41% will be reskilled or upskilled, with an average education time of 7.5 months and $4,650 in training costs per reskilled employee. Despite the growing need, respondents report that 36% of the workforce will not be reskilled or upskilled, for a variety of reasons, including competing priorities, internal challenges and market pressures.