4 Steps to Creating a Utility Succession Plan

Within the next two decades, over 70 million baby boomers, who make up the majority of the utility workforce, will reach retirement age. It is estimated that some organizations will lose 50% of their current employees to retirement alone, which could leave public utilities in crisis. The effect of this retirement wave is already being felt nationwide as a loss of critical skills and vacant leadership positions begin to compromise reliable service and growth. A utility succession plan, a program that ensures continuity in leadership by building internal personnel talent, is crucial to ensuring an organization’s stability.

There are several indicators utility managers can use to determine if the stability of their current operations is at risk. Your organization could be affected by this retirement wave if:

  • the average age of your employees is higher than 45
  • you are frequently losing staff members to other fields
  • your organization lacks a formal mentoring program
  • you don’t have a replacement plan for upcoming retirements

A comprehensive succession plan addresses these instabilities and ensures your organization is able to sustain a qualified workforce during this demographic shift. A succession plan can be created in four steps—identification, assessment, development, and communication.

It’s crucial to identify the organization’s key positions, its long-term and immediate needs, and any gaps that will be created by retiring employees. Leveraging technology will simplify this step; create a list of employees planning to retire in the next two, five, seven, and 10 years in order to determine easily which areas will need more resources in the coming years.

With the possibility of a drop in manpower on the horizon, assessing existing employees’ talent and potential will ensure your team is playing to its strengths. Determine what the career objectives and goals are for each individual and evaluate the organization’s abilities to help them attain those goals. Consider creating recognition programs to acknowledge employees’ accomplishments; letting employees know they are valued is important for retaining talent.

Once strategies for helping employees grow professionally have been identified, it’s time to put them into action. This step can include creating formal leadership development programs tailored to different leadership or management levels, reimbursing employees for licensing and recertification fees, paying for memberships to professional organizations, and putting policies in place that offer incentives to certified employees or those pursuing training opportunities. Implementing these plans reflects an organization’s commitment to employee growth and also ensures a qualified workforce at all levels.

Offering opportunities for training and growth won’t be effective unless employees know they exist. Promote new programs and policies as they are developed and remind staff about them periodically. It is also critical to maintain an open line of communication with employees so that plans can be adapted to respond to the changing needs of the organization.

Having a succession plan is only one piece of the larger succession strategy utilities need to have in place. Other efforts should be focused on recruiting new employees to replace those moving up into leadership roles or retiring and capturing the vast amount of retiring staff’s general and technical knowledge. The changing landscape will create new challenges for utilities, but succession planning can help them stay ready for whatever comes their way.


Jay Sheehan Business Development Leader Operations & Management

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