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Can the Gig Economy help utilities with their mass retirement problem?

The word ‘gig’ often conjures the image of a favorite rock star or artist, but the term has become increasingly synonymous with what economists observe to be a changing dynamic in our workforce. The ‘gig economy’, defined by a notable increase in the number of skilled workers that prefer to engage with an organization or project for a specific time to deliver a specific skill or outcome – a ‘gig’,  was precipitated by the 2009 recession and its impact on how workers viewed their stability within an organization. It is also attracting younger talent, across multiple industries. These new workers place a higher value on flexibility, creativity, and freedom in their careers. Further, they are motivated to seek work that enables them to engage and leverage new technology.

For the utility industry, this shift has come at a fortuitous time. Utilities are facing both an aging workforce as well as significant pressure from regulators and consumers to transform their business. Harnessing the ‘gig economy’ will be essential to meeting these challenges, particularly for innovative utilities which desperately need highly-skilled technical resources to meet strategic initiatives. But how can utilities use this different approach to be successful for what has historically been viewed as staff augmentation or specialty consulting? To start, leveraging ‘gig’ resources must be part of a robust human capital plan that recognizes the potential impact on the utility culture and ensures that the knowledge and skills delivered by these resources are transferred to support a robust, longer-term workforce at the utility.

An Opening And Closing Act

Like many companies, utilities should view the opportunity to leverage the gig economy to attract younger workers who would otherwise be hesitant to join an industry commonly viewed as technology laggards. A fixed engagement, where a resource is hired for a set amount of time with defined deliverables, serves as a low-risk opportunity to both the utility and the resource.  The resource, with a focused outcome to deliver, can quickly expand their credentials, enabling them to meet their expectations for career growth. The utility organization benefits by quickly adding specialized skills absent from their teams that are needed to execute critical projects.  The utility organization may also gain from the cross-industry experience these resources can contribute to a project.

Utilities also have access to a different type of ‘gig’ resource than most other industries. Utility retirees are seeking “life after the utility” careers that allow them flexibility while still utilizing the deep industry knowledge they’ve amassed over a 30-plus year career. The experience these retirees offer can also expand the type of ‘gig’ or consultant role from what has been viewed as a task-orientated type of role to something that is more strategic in nature. For example, a former utility operations leader turned consultant has the breadth of experience needed to create an advanced grid management architecture that is aligned with a utility’s business transformation goals.

In what some would see as a strange twist, these former utility employees are also the potential solution to the very problem their departure created. Their experience and institutional knowledge positions them as highly-valued mentors to the next generation of utility workers and optimizes the knowledge transfer process. The benefit of adding resources like these stands in sharp contrast to the typical resources sourced by large consulting companies.

Avoid the Endless Encore

While it’s clear that there is much to be gained from tapping into these new resources, it is equally important to recognize that the ‘gig economy’ cannot alone solve the utility’s skills gap and staffing challenges.  Often project and resource planning at the utility are simply focused on people and not the required skill set to support their technology initiatives. The reality is that a marriage between new technology and the ability to operationalize it is critical to effective project delivery.  Utilities have had some success in engaging skilled, independent consultants however they have been devoid of the defined methodologies, processes or project accelerators that can be the foundation for developing that union. The right solution partner must address these needs as well.

As utilities increase use of these types of resources, it becomes more important to evolve how they are sourced and to make sure knowledge transfer is a defined outcome of every engagement. Without it, the expected gains in reducing employee overhead and lower training costs may not materialize as resources are extended or re-retained.

It will also be necessary to understand the associated limitations for this type of a role. Gig resources with their aptitude for technology and focus on delivering a specific outcome are ideal to take on the project management and implementation of new projects like ADMS or DERMS, however that may not be the best model to operate and support real-time systems or NERC CIP related applications.

Get Back Stage

Don’t let blockers, like procurement teams or large, in-flexible consulting firms, stand between you and the highly skilled gig resources you need.

Consider first the procurement team. Capitalizing on the ‘gig economy’ will require a nimble recruitment process that is often lacking at large IOUs.  There, they have developed complex procurement processes that are aligned with a more traditional approach to resource management and staff augmentation. However, that approach can also lead to concerns over co-employment laws. To succeed, today’s utility leaders must be given the ability to quickly shift, adding or changing resources as needed, addressing specifically defined tasks and outcomes, in response to the evolving tempo and required skills of a given project.

Like any good rock star, utilities need an agent - someone that can help navigate the gig market, assist with the new resource planning models and handle the complexities of identifying and staffing the right resources for the specific job. Finding the right agent is critical. In this new model, working with large consulting firms is more of a disadvantage since they can limit a utility’s access to these resources.  Larger consulting firms typically lack practitioners with deep industry experience and as a result, attempt to fill a request for a resource with an alternative approach like - forcing a square peg into a round hole - just to keep their bench utilized and billing. Skilled, in-demand resources have their choice of where to lend their talent and as a result tend to seek out smaller firms that know the industry better, understand their individual “talents” and can align these services with the cutting-edge projects the giggers seek.

 

 

Fred Alexander's picture

Thank Fred for the Post!

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Clark Harrison's picture
Clark Harrison on December 17, 2018

In addition to using the gig approach with individuals, utilities can outsource labor and equipment to perform tasks that were traditionally done inhouse.  For example, power plant owners can define "gigs" such as coal unloading and stockpiling, ash landfilling, gypsum processing, water treatment, and wastewater treatment and contract with a third party to provide equipment, O&M personnel, spare parts, repairs and replacements.  These "ancillary functions" can be cost effectively managed and staffed by specialty contractors using the Build, Own, Operate, Maintain (BOOM) model.

Mike Ahern's picture
Mike Ahern on December 18, 2018

Fred, this is an interesting post. 

I think utilities have successfully participated in a type of Gig Economy during mutual aid storm restorations.  Do you agree?

Best,

Mike

Karen Marcus's picture
Karen Marcus on January 15, 2019

Fred, I agree with Mike, this is an interesting post. I'm curious to know, from you or other members, of real-life situations in which gig workers - simply by adding needed labor, or by offering particular skills - helped solved specific problems within utilities.  

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