3t Digital’s Managing Director, Grant Crow, discusses emerging industry solutions that help attract and retain talent and skills in safety critical industries.
This article discusses industry talent within safety critical industries and their ageing workforces – including but not limited to Rail, Construction, Mining and Utilities. While dynamics will differ based on geography and industry specific issues, there are broad trends and themes impacting most of these industries in similar ways.
Workforce Demographics and Background
Typically, these industries have always featured an older demographic due to their strong prospects, with many workers staying with the same company for life. While this has the benefits of a knowledgeable and confident workforce, it does present issues as this group reaches retirement age. With a drop in young talent, there is the potential for a lack of adequate skills and knowledge in these safety-critical roles.
In the rail, construction and utility industries, research shows that age, gender and diversity all play a part in an ageing workforce, with a lack of skilled workers under 30 able to replace the retiring workers.
The Rail Industry has an average age of 44.
The UK’s National Skills Academy for Rail (NSAR) recently reported that the average age in the industry was 44 and that it had been increasing steadily. Couple this with the fact that the proportion of employees aged 15 – 25 had halved since 2016 to only 5% of the total workforce means that there could be very real issues ahead for the rail industry unless action is taken now. Gender and diversity are important factors in talent attraction and industry reputation, but the female proportion of the workforce has dropped to 14.6%, and additionally workers that were classed as other than white totalled only 12.5%.
The Construction Industry has seen an increase in workers over 60.
In the construction industry, the UK’s Chartered Institute of Building’s research shows that the total of workers aged over 60 has increased more than any other age group, while the biggest reduction is in the total of workers under 30. This suggests imminent and significant loss of knowledge and vital skills as this group approaches retirement with fewer younger professionals in the pipeline to replace these.
The Utilities Industry has seen a 50% increase in workers over 45.
Looking now at the international utility market, Philip Gordon at Smart Energy International can see that the employment landscape is changing, driven by varying forces including the common problem of an ageing workforce reaching retirement. According to a January 2017 assessment by the US Department of Energy, 25% of US employees in electric and gas utilities who were born in the mid-1900s will retire within the next five years.
The US Department of Labour has also estimated that as much as 50% of the current energy utility workforce will retire within the next ten years, and the average age in the industry is 50. The problem is not just limited to the US, with more than half (52%) of the UK electricity sector’s workforce over the age of 45. Figures in the water utility industry are similar at 54%, and in UK gas utilities, 49% are over that age.
These statistics highlight an issue that affects a multitude of safety-critical industries. But not only do organisations lose skills when people retire, but the skill sets needed for each role also naturally evolve over time as needs and requirements change and technology advances.
Changing skill requirements
As safety-critical working environments evolve, large scale reskilling or upskilling is needed to keep existing and new talent at the top of their game.
LinkedIn recently published a global survey on the role of learning and development, highlighting that since 2015, skills sets for roles have on average changed by 25%, with this number expected to double by 2027. This suggests that large scale upskilling and reskilling is increasingly going to be required. The report cites concerns about the relative lack of initiatives to upskill and reskill workforces and then slow progress with these initiatives where they do exist. Large scale reskilling or upskilling requirements investment, but this is unlikely without a shared industry-wide sense of urgency and purpose. The current economic climate, with close to full employment in many western economies, exacerbates the talent challenge and ensures that these industries are fighting a battle for talent with other industries and geographies.
Actions to remedy this:
Initiatives already exist to try and address the talent challenges, all with varying degrees of success.
- Comprehensive apprenticeship programs. Programs offering a combination of formal education and hands-on training have been successful in attracting young talent who are keen to learn ‘on the job’. These programs often lead to recognized qualifications and the potential for long-term employment within the sector. Technology is increasingly used to deliver training content, assess progress and connect apprentices with employers. This use of technology also reduces travel demands and costs, making this method of learning highly appealing to a wider demographic. Learning this way, with technology playing a big part in the learning material has the potential to assess apprentices more objectively and to provide more granular and meaningful assessments
- Collaboration with Educational Institutions. Partnerships between industry bodies and educational institutions have helped raise career awareness among students. The majority of school, college and university leavers have very little detailed insight into what working life in a given role or industry is actually like. A realistic preview of what a “day in the life” looks like, including working conditions, will ensure that candidates will, to some extent, self-select leading to lower levels of initial attrition. The use of technology is important here. Think of a careers fair where an industry provides immersive virtual reality experiences to students vs another handing out brochures or merely talking about working in that industry. In a short space of time, an immersive VR experience provides a very clear sense of working life and activities in any given environment. Combining these innovations with the use of selected employees as industry advocates should be the norm for industries serious about tackling the talent challenge.
- Investment in training and development.The companies and industries that invest in developing their people are likely to be the winners in the talent war. The LinkedIn survey mentioned previously highlights that organisations providing learning opportunities is the best way to boost employee retention. Employees who are not learning at all, or learning too slowly, are much more likely to leave. Younger workers in particular have a strong desire and need for learning and career development. Career development does not necessarily imply promotion. It can also take the form of secondments, project work, broadening a role, and moves across functions. An additional finding among newer employees, was that those who had made an internal move within their first two years were far more likely to stay than those who had not had this opportunity. At the other end of the spectrum, some industries have experienced success with reskilling of older employees and in supporting employees who wish to extend their working life.
- Promoting technology and innovation.It can be suggested that while many safety-critical industries invest heavily in infrastructure and machinery, they are not always top of mind when considering innovation and broader use of technology. Technology appeals to a younger employee profile and coming across as clunky and not tech savvy can be a definite deterrent! Without wishing to alienate the unions, the introduction of new technologies including AI, virtual reality, automation and robotics is likely to fundamentally change the demand side for labour. Technology has the potential to mitigate parts of the skills shortage however the underlying competition for talent still remains. The extent to which this factor counteracts the demographic challenges identified remains to be seen.
- Industry branding.While the logic of this type of initiative is indisputable, there is a danger of company and industry messages being lost in the noise of competitor’s shouts for attention. Conducting brand research at industry level is likely to highlight commonly held perceptions and misperceptions around working in the industry. Josh Bersin, a leading HR strategy consultant, suggests the notion of an Employee Value Proposition. This is a clear and ideally compelling description of the unique benefits and rewards employees will receive in return for their skills, effort and commitment. For industries, why not develop the concept further with stakeholders to create an Industry Value Proposition. This would encapsulate the key reasons why workers, particularly younger workers, should seriously consider the industry as a career choice. Working at industry level will enable pooling of resources and provide greater clarity in messages to potential candidates. While many companies within industries are themselves competing with one another for talent, they also do collaborate when this is in their mutual interests.
- Diversity and inclusion initiatives.An inclusive environment is a requirement for many millennials. In fact, a working environment that is not diverse and inclusive is likely to feel alien. The numbers available suggest that safety critical industries need to do much more to improve in this area.
Many industries have implemented elements of the above actions and initiatives with varying success. Overall it would appear that more attention needs to be paid to industry branding and the development of industry value propositions to provide clarity and enthusiasm amongst potential employees. Additionally, technology needs to be leveraged more consistently and innovatively as part of industry branding and to enable more effective learning initiatives.
One such way of using technology to create consistency throughout safety-critical industries is the introduction of a Skills Passport for each individual. These digital passports provide an at-a-glance overview of skills, training and qualifications alongside clear mapping for future job progression.
Innovation though Skills Passports
A recent innovation arising from the North Sea Transition Deal (NSTD) in the UK Energy sector is the concept of a personal skills passport. Estimates are that roughly 50,000 jobs will be lost in traditional oil and gas in the next 10 – 15 years while a similar, and potentially greater number, will be created in renewables including carbon capture and hydrogen. This raises the question of how to facilitate movement between industry sub-sectors and on a large scale. This is an excellent example of large-scale industry transition.
One of the challenges faced by the industry is that there are a number of sector skills bodies setting standards for roles, associated training and certification in the industry. As yet, there is no common mapping of standards across these bodies, resulting in duplicate training, inefficiencies and unnecessary costs. The NSTD aims to harmonise standards across skills bodies to help individuals take ownership of their career and to be able to make career change and progression decisions within this framework. A skills passport gives workers full visibility on potential career pathways and the training requirements for roles across the industry.
The skills passport integrates with all of the sector skills bodies’ databases, consolidating an individual’s training and qualifications in one easy-to-access place.
Additionally, for those safety critical industries where worksite access needs to be controlled, the Skills Passport can also function as a Safety Passport. In many cases, access to site is managed with paper and/or legacy software that was built years ago.
How skills passports help with skills development and employee attraction
A skills passport is only likely to be successful if the key stakeholders, and in particular skills bodies, are aligned on the principles. Agreeing standards across skills bodies is likely to require compromise and the recognition of working jointly towards a greater good. As has been suggested earlier, industry responses such as developing an industry value proposition are required in order for any industry to develop and present effective skills related strategies.
Assuming this hurdle can be overcome, skills passports have significant potential to change the development experiences of current workers in a sector as well as educating potential entrants. The notion of having all of one’s qualifications securely held in one easily accessible app, together with the ability to plan career moves around skills and competencies is a powerful enabler and serves to communicate to workers that their needs are being placed front and centre.
For potential entrants, a skills passport can both educate on requirements as well as demonstrate that the sector has its act together in that it has a cohesive story to tell about careers and development. That this story is told through the innovative use of technology is a bonus.
The use of a skills passport will be key in not only attracting and retaining a younger workforce, but also showing a cohesive pathway for older workers whose roles may have changed. They may have found themselves transitioning to another role either through their own desire or because of an organisational need, and this passport can simplify the transition process.
By working together and harnessing digital innovation, safety critical industries can build on the legacy of those workers reaching retirement by equipping the workforces of the future with all of the necessary skills to help them build a long-lasting, enjoyable career.