Disconnect Between Workforce and Goals for Decarbonization and Digitalization

The executive branches of those in the power, and utility industries have largely embraced goals such as decarbonization and digitalization. However, a survey by EY (formerly Ernst & Young) reveals that their workforces are a million miles away from being able to facilitate those goals.

According to the EY Power & Utilities Digital Transformation and the Workforce Survey, nearly 90% of executives in those sectors report having too few workers with the right skills to adopt digital technology. That’s why 94% agree that they need far more investment in technology and the workforce, yet they lack a clear pathway on how to proceed.

"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."

The survey of 159 power and utility executives across the globe revealed that the digital technology landscape and the workforce skills required to support it are far beyond the core skills traditionally coveted by the sector. More than 9 of 10 executives said they will be changing their mix of energy sources (91%) and adapting to changing consumer expectations for a cleaner energy economy (93%) over the next few years. These changes will require new and enhanced capabilities for utilities. Furthermore, more than half (55%) ranked the adoption of new technologies as one of the three trends that will have the most positive impact on their organization.

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.

Closing the skill gaps

Even though failure to close the skills gap and effectively implement digital technologies poses a threat to their future, utility executives provide an uneven response to how they would overcome the challenge. For example, while 85% said reskilling is essential to their success in the next three years, only 57% said they have a robust plan to reskill over the same period, dropping to 48% among respondents in the Americas.

Further complicating the challenge is that executives don't necessarily know where skill gaps exist and are experiencing issues with workforce retention. One-third said they cannot measure the gap between the skills they have and what they need. Additionally, two-thirds report having difficulty retaining those with in-demand skills in their workforce.