With retirement of baby boomers on the horizon, public utilities inevitably face the loss of experience and knowledge compiled by key staff members that have worked there for decades. The ensuing exodus of knowledge creates a gap in operational continuity, which can ultimately hamper the ability of a public utility to carry on its mission effectively and can increase opportunities for operational mistakes.
Utilities must come up with creative approaches for replacement of baby boomer staff, given a limited workforce pool that will be aggressively pursued by the public and private sectors alike. Knowledge management systems are one method of providing a platform for the retention and sharing of the explicit knowledge residing within an organization.
There are several future trends that undoubtedly will have an adverse effect on the organizational structure of public utilities. These trends are mostly associated with the availability of manpower required to manage the day-to-day activities of public utilities. The tight U.S. labor market and dramatic shifts in the business environment and corporate staffing patterns have much to do with the problems that public utilities will inevitably face. Among the trends that will influence the industry are:
1—Diminishing workforce: One of the problems that public utilities face is the timely replacement of management staff belonging to the baby boomer generation. Baby boomers currently are approaching retirement age. However, the population gap between the baby boomers and Generation X places a great deficit in the number of personnel available to fill management vacancies.
2—Growing private competition within the public sector: In recent years, the water and wastewater industry has experienced a large number of corporate transactions that include the sale of key equipment vendors, engineering consulting firms, analytical laboratories, and facility operation and maintenance companies. These transactions were an effort to create large companies capable of providing one-stop shopping to cities requiring utility services. With a growing market for design-build and design-build-operate, these companies are well-positioned to compete with the public sector in recruitment of knowledgeable personnel.
As more of these joint ventures are formed, the private sector also competes for management positions requiring utility experience. Having a higher degree of financial flexibility, the private sector may at times successfully recruit key personnel from the public sector who possess experience and expertise in the area of water and wastewater utility operations. Therefore, as the private market grows, it will become more difficult for the public-sector utilities to retain key management and operations personnel.
3—Deterioration of employee loyalty: In the past, employers were accustomed to a workforce that was loyal and committed to years of employment with the same company. With changing dynamics in the workforce and higher demands imposed by employees, people are less loyal to their employers and thus more willing to change jobs more frequently. Employee retention has become a challenging task for many organizations. However, this problem may not be as pronounced within the government sector—particularly in organizations that offer attractive retirement pension plans.
4—Increasing public involvement in government: With many new regulations geared to educating the public about government operations, we will see a higher degree of involvement by the public in fiscal and operational activities. Such involvement may result in higher accountability of resources by public utilities. Consequently, public utilities may face a need to streamline operations and do more with fewer personnel.
These trends have the potential to severely impact future workforce availability given the large number of vacancies that will be left by the baby boomer generation. And we also face the challenge of retaining and sharing that generation's institutional knowledge. Unfortunately, the resulting exodus of knowledge can transform an organization that was once efficient to one that “fails to know what it already knows.” Not only can this be devastating from an operational standpoint, but there is the possibility of a loss of confidence for the staff that remains behind.