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🚰 "Workforce Disruption: Who do Utilities Call for Help?"

The Future of Water

Photo by Robert Linder / Unsplash

Host: Reese Tisdale
Guests: Eric Bindler | Research Director, Digital Water | Bluefield Research &
Isabel Kezman | Analyst | Bluefield Research
Category: 🚰 Utilities

Podcast’s Essential Bites:

[4:25] EB: “The AWWA, American Water Works Association, […] [does] this big annual report. […] But also during COVID, they've been doing these more regular really quick surveys, pulse of the market, what's going on with utilities and dealing with COVID. At the beginning, it was about revenue disruption and absenteeism and stuff like that. The one that they just put out in October was more focused on […] the workforce impacts. And it's really interesting because I think for all of us that have just been kind of following the news reading about the state of the economy more broadly, there's a lot of talk about the great resignation, about the tightness in the labor market. But it's really interesting to actually have some stats for how that's playing out in the utility sector.”

[5:23] EB: “The biggest takeaway for me was that of the 400 something utilities that they surveyed, 40% said that they're currently facing difficulty hiring. And 26% are expecting those challenges to continue to 2022. And if you look at the breakdown of positions where utilities are struggling the most to bring people on staff or to keep people on staff, it's really these high skill, kind of mission critical positions, like treatment plant operators, service technicians, commercial drivers, mechanics, engineers. […] It's kind of eye opening to see the amount of trouble that utilities are having to keep these key positions on staff. The other big picture stat […] in terms of utility turnover: about 21% of utilities that they surveyed, are […] reporting higher turnover. Whereas it was only about 11% earlier in the year that we're seeing that.”

[7:29] EB: “One data point that jumps out is this Brookings Institution study from 2018, they mentioned that now about 10.5 percent of water sector workers would be either retiring, or at least transferring out of the industry between 2016 and 2026. […] According to the AWWA survey, only about 12% of the utilities surveyed, do have some kind of a vaccine mandate in place or are planning to start one. And about half of those with those mandates […] do expect that it's going to have an effect on workforce levels. […] It's probably not the main reason, but it is one potential driver for some of the higher levels of turnover and resignations that we're seeing.”

[13:44] IK: “Based on […] [the] utility labor challenges, […] utilities are going to be looking for solutions and weighing several different options. One of which could be to outsource the operation and maintenance, which we call O&M, of their water and wastewater systems to a third party service provider. […] Right now, we estimate around 38 million, or 12% of Americans, currently receiving water or wastewater services through systems that have an O&M contractor. […] We're expecting this market to expand. And this is not only because of workforce disruptions that we discussed earlier, but also there's just an overall greater need for more advanced treatment solutions, management solutions, especially as it relates to digitalization, emerging contaminants, like PFAS and aging wastewater and water assets.”

[21:42] EB: “I have a lot of respect for the AWWA and the surveys that they've done. […] But I do think it's maybe fair to say that they've got a little bit of a blind spot or less of a focus on kind of the digital side of things and the impact. […] But I do think that that's also a place where […] utilities [are] really struggling to attract and retain talent. […] And so there are a couple of reasons why I think, in particular, these types of skill sets are going to be tough for utilities in this environment. For one thing, the pay rate is drastically different. […] On average, a data scientist, for example, makes twice as much as a water or wastewater plant operator.”

[23:16] EB: “Another big part of it, especially for the tech sector or knowledge sector workers, is that flexibility that workers have had during the pandemic […] for either working from home on a permanent basis, or for being digital nomads. […] It's a really different work arrangement than the utility sector […] is used to, […] because [it] is such a local business. […] Nearly 70% of the utilities surveyed […] during COVID implemented some kind of remote work policy. But now only about 9% have actually made that permanent, or some sort of hybrid working arrangement at least. Another 21% are considering it. So a really big shift back towards getting everybody in the office. And I think that is, again, contributing to, along with the wage differences, […] that disadvantage that utilities have of attracting and retaining that top tier technology talent.”

Rating: 💧💧

🎙️ Full Episode: Apple | Spotify
🕰️ 33 min | 🗓️ 12/07/2021
✅ Time saved: 31 min

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