Powering Strong Communities

Succession Planning: How Utilities Build the Bench to Keep Team Rosters Full

Succession planning protects institutional knowledge and keeps an organization's players at the top of their games.

When Key Players Go

In its latest Gaps in the Energy Workforce report, the Center for Energy Workforce Development noted that retirement attrition in the industry in 2021 was at its lowest level since 2014. However, nearly 29% of the workforce are baby boomers, people born between 1945 and 1964. The youngest boomers are less than 10 years away from eligibility for full retirement. This may be even more acute within public power, as earlier versions of the CEWD report showed that the public power workforce was on average older than other parts of the energy sector.

For the Brownsville Public Utilities Board in Texas, four of seven directors (57%) are ready for retirement. Across all management levels, 18 of 39 employees (49% ) are eligible to retire.

Institutional knowledge is not the only thing that can walk out the door when a key employee or leader leaves. “Loss of leadership creates issues,” said Marisa Gaytan, manager of training and development for Brownsville. “Employees have a sense of security and stability when there is a person in the leadership role with experience and tenure. In times of new leadership, it is common for employees to experience insecurities and potential turf control battles,” she said.

The turmoil that may result when one established leader exits and another steps in often stems from fear of the unknown, Gaytan said. Newcomers often force teams to re-experience the stages of team development, which may include resistance, competition and conflict, before the team settles in and begins performing at peak levels. But change can also bring new ideas, innovation, and energy, she said.

Planning to Pass the Baton

In Kentucky, Paducah Power System has made succession planning one of its five strategic priorities. The utility asks all supervisors to identify all individuals who might retire or otherwise leave in the next few years. The utility instructs supervisors to specify how much training a new person would need while the existing employee is still on the job and to identify any issues that may need to be covered while the new employee gets up to speed, said Andrea Underwood, director of human resources and commu- nity relations for Paducah Power.

“Once you have all that laid out, it’s easier to see the big picture,” she said. This planning allowed the utility to see that all three foremen leading the utility’s three line crews might retire within the next five years. “We were able to hire apprentices and get them in the loop to become first-class linemen so that our people who are already first-class linemen will have a chance to move into leadership roles,” Underwood said.

This proactive approach to seeing who is likely headed out the door also let the utility know when the lead payroll clerk was going to retire. “A little over a year from her retirement, we went through the hiring process with in-house candidates,” she said. That allowed the utility to get a replacement lined up and provide ongoing training for an entire year. “The person moving into the role was able to see those big events that occur over the course of a calendar year, like open enrollment,” Underwood said.

Incentivizing Notice

Keys Energy Services in southern Florida rewards employees who give plenty of notice about their retirement plans.
“A few years ago, we were getting very short retirement notices from employees, some of whom had been here 20 or more years,” said Julio Torrado, director of human resources and communications for the utility. “It’s a big decision, and some people were keeping it close to the vest. We were having people give anywhere from 30 days notice to just two weeks.”

To address this, Keys Energy implemented an early notification pro- gram for employees who have 15 or more years of continuous service or who are at least age 60 and have 10 years of service. “If people are eligible for the program, they have to give a minimum of eight weeks of written notice of the intent to retire to be compensated for that advance notice,” Torrado explained.

The rewards grow if the employee gives 16 weeks notice, and can change depending on a number of factors. Some employees can choose to take a day off each week that does not accrue to paid leave and lets them transition into retirement via a reduced work schedule. Some who otherwise would not be compensated for accrued sick leave are permitted to take it on the way out as a cash bonus.

The utility piloted this program from October 2019 to December 2020. The nine employees who retired during that time provided an average of 120 days of notice. “In the three years preceding the pilot, the average notice was around 30 days. We definitely saw an increase in advanced notice as a result of this program,” Torrado said.

Growing Future Leaders

Along with actively addressing upcoming retirements and resignations, utilities also prepare existing employees to move up the organizational ladder.

“We are constantly trying to grow what I call ‘future leaders,’” said Torrado. Keys Energy Services offers annual seminars to help employees fine-tune skills that encompass “the nuts and bolts of being a supervisor,” he said. Prior to the start of the pandemic, employees who expressed interest in the program would attend multi-week training courses that Keys Energy put together with local vendors. Topics included things like how to write a disciplinary memo, how to handle a disgruntled employee, and effective communication skills. These programs are being reinstated as pandemic restrictions wind down.The most recent seminar offered was for all employees.

Paducah Power uses annual reviews to help employees see what, if any, skills would help them grow with the company and where they might want to wind up. “We make sure managers have good, thorough conversations to find out what roles employees see themselves taking on in the future and what we think they need to do to meet those goals. Then we follow up with appropriate training,” Underwood said.

The Paducah team also has people help train their successors with or without overlap in employment through guidance documents, referred to as “bibles,” prepared by the prospective retiree. “We had an administrative assistant who left and when her replacement came in, this “bible” covered everything the person in the role had to do. It was all documented and laid out in a way that the replacement could follow it through the calendar year,” Underwood said. The device was so helpful, the utility now encourages others to document their responsibilities and the “how-to” information that would let another person pick up the book and know what to do.

“Succession planning often becomes an afterthought for organizations because of the rapidly changing work environment,” said Trish Holliday, vice president of human resources and corporate services at Nashville Electric Service in Tennessee. Creating a talent pipeline is a strategic necessity for utility leaders, she said. “Studies indicate that top talent want good leadership, to be a part of the decision making at some level, and to be developed for future roles.”

“While every employee enters the workforce with a set of skills, it is important for an organization to proactively manage how they develop and grow those skills throughout their tenure,” said Halliday. “Investing time and resources in continuing education and employee development pays dividends. Not only does it ensure the workforce is constantly grow- ing and evolving, but research suggests it can also contribute to employee engagement and retention.”

Holliday noted that employees appreciate when employers support their professional development and foster an environment where employees have opportunities for growth and where career paths are multi-directional. This approach helps individuals to grow and creates a learning culture that drives innovation and promotes inclusion. Organizations can also attract and retain high performers and remain competitive in the race for top talent.

Brownsville does emerging-leader scouting and is now rolling out a Middle Management Leadership Academy for employees in middle management and those identified as having the potential to grow into a supervisory role. “We cover emotional intelligence, conflict management, coaching, mentoring, critical thinking, strategic thinking and decisiveness,” said Gaytan. The program is built around two-hour classes delivered twice per week for a total of 24 hours of training.

Along with formal training, Brownsville uses more casual approaches to finding individuals who show leadership potential. The utility has a lending library for leadership-focused business books and runs a Toastmasters club that’s open to 25 employees each year. At every meeting, 10 to 12 of those employees will need to step up and handle some role, such as leading the table topics, being the grammarian for the meeting, or serving as an evaluator. To keep the club running, a few employees must raise their hands to be a club board member.

“Those are great examples of employees showing leadership skill. They understand that for us to have a successful meeting, we need them to be active members of the club,” Gaytan said. “It also helps us identify what skills people have.”

What Is Needed for Tomorrow

Cultural and ethnic diversity is essential for future leadership teams. “It’s easy to build relationships with people who are like-minded, but it’s more challenging to do the same with people who think differently,” Gaytan said.

“More diverse and dynamic workforce ecosystems can be pivotal to an organization’s ability to thrive but likely require revising management and talent practices,” Holliday said. “Utility leaders should consider how best to represent the communities they serve within the workforce.”

Communication is the top skill worth developing. “Whether its interpersonal communications, written and verbal communications or just human interaction in general, the most common skill deficiency our organization sees comes down to soft skills,” Torrado said.

Underwood agreed: “At the end of the day, most business is done through interaction with others. If people are going to lead, they need to have a good understanding of how to work with and nurture other people,” she said.

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