Using interim managers, utilities should be able to cope with the double whammy of skills shortages and an ageing workforce, says John Wilson.

While other sectors are making job cuts, utilities in the UK still face a major skills crisis. In January 2009, research from sector skills council Energy & Utility Skills reported that there was a shortage of skills across the industry. The situation is most pronounced in the electricity sector, where 9,000 extra skilled workers are needed in the UK by 2015.

Another challenge facing utilities is that many older, experienced workers are nearing retirement age. Some reports estimate that during the next five to ten years, many utilities will lose 50 per cent of their current workforce to retirement. Soon there will be large gaps at senior levels within companies and they stand to lose vast amounts of critical knowledge if it is not successfully passed on to the next generation of workers.

The situation is likely to get worse. There are several fast-emerging areas of growth, including nuclear power and renewable energy. With most skilled engineers currently in their 50s and a shortage of engineering graduates, the lack of talented engineers is going to be a major challenge for many companies in the next few years. So what can utilities do to avoid a skills crisis when key workers retire and how can they ensure the successful transference of knowledge?

The government and several industry bodies have taken action to solve the impending crisis. In February this year, the prime minister, Gordon Brown, announced the government's commitment to invest £1 billion in apprenticeships this year and next, to ensure the UK has access to enough skilled workers to remain competitive in the future. It has also committed to investing more than £11 billion a year in education, employment and training and is encouraging employers to offer apprenticeships in a bid to increase the number of places on offer to 90,000 by 2013.

Skills crisis

The problem is also being addressed by the industry, with many companies joining forces to address the skills crisis. The National Skills Academy, which comprises 24 different energy companies, is united in a common goal of recruiting talent into the power industry. The group is lobbying government and promoting the power sector to school leavers and university students to attract them to what is a growing industry.
However, such strategies will not avoid the immediate shortage of senior resources in the sector and, with many workers approaching retirement in the next few years, action needs to be taken now.

One way that companies can address the skills shortage is through the use of interim managers - seasoned executives who can be brought in to fill gaps left by people who retire or leave their company. Interims are experienced professionals who have "been there, and done that before". They are generally overqualified for the jobs they take, so tend to reassure business managers and give them the confidence that they can deliver results from day one. There is no protracted settling in period for interims, they simply get on with the job in hand.

Interim managers are specialist operators who bring specific experience and a proven reputation for getting results. They can be placed for a defined period of time, so are an ideal solution for an organisation that cannot find a suitable replacement when someone senior retires or leaves the company.

The case for employing the services of these managers is strong. Interims are self-motivated and experienced individuals. They work to clear objectives, which they look to achieve within a set timescale, and are expert at joining a team or department and hitting the ground running. They bring a fresh perspective to a business, which often means they end up finding new and better ways of working and can deliver efficiencies across a business while energising and motivating staff.

Gap filler

However, it would be a mistake for utilities to only consider these managers as a gap filling solution. While the sector is not in recession, it is still under pressure to deliver better services in an often highly competitive market. Interims can be brought in to run business transformation projects, develop new business or handle change management roles that can give a company a competitive advantage.

Another benefit of interims is that they focus on creating lasting value by introducing new business models and processes that can then be used by internal staff. They also look to pass on critical knowledge to team members. A good interim manager will always transfer their skills before leaving, even if it makes them redundant in the process.

Financially, the argument is sound. Interims are paid to an agreed day rate, without the typical overheads associated with recruiting a permanent person. There is no pension to be paid, or holiday or sickness benefit payments requirement.

Interims are a more cost-effective option than management consultants, costing around one-third of the price, and are also more hands-on. They create strategic plans and, like consultants, their role is to implement them. They can be a highly flexible resource for utilities that do not have the budget or need to hire someone full time or permanently.

John Wilson is director of operations for Russam GMS. See: www.russam-gms.co.uk. Email: john.wilson@russam-gms.co.uk

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