Are industry skills challenges insurmountable?
Energy networks are struggling to make an impact on their skills outlook despite strong investment in STEM engagement schemes. What needs to change to make a difference?
11th March 2016 by Networks
If there’s one topic that can unite a room full of engineers in the UK, across the energy sector and beyond, it’s skills pipelines and future talent. But despite this animation industry skills obstacles seem immovable. Figures about skills gaps, job vacancies and potential economic value – to be lost or gained – are endlessly trotted out to perpetuate a sense of urgency about the challenges industry faces.
They are used to stimulate investment of time, money and resources by industry, education and government to inspire a new generation of skilled and technical employees and to develop training and qualification frameworks suitable for them.
Energy networks are among the organisations most keenly aware that skills challenges could stymie business performance. They require many of the core engineering skills that are most in demand, and some of the most niche skills associated with new technologies and data analysis.
Given this, it is no surprise that energy networks have pioneered new engineering skills solutions in recent years. Individually and collectively, through bodies like the National Skills Academy for Power and the Energy and Efficiency Industrial Partnership (EEIP), energy networks have poured resources into raising awareness of careers in industry in schools highlighting their future skills needs to government and developing new apprenticeship frameworks.
Skills by numbers
According to Energy and Utility Skills Group:
200,000 – the number of new recruits needed to fill technical and engineering roles in UK utilities by 2025
50% – the proportion of the UK utilities workforce due to retire by 2025
25% – the proportion of skills related vacancies now in the UK utilities sector
15,000 – the number of new recruits needed by the UK’s electricity networks within the first RIIO price control. This equates to 74% of the current workforce
According to government’s National Infrastructure Plan for Skills
70,600 – the number of recruits needed between now and the peak workforce requirement of National Infrastructure Plan projects in 2019/2020 in order to achieve the plan’s ambitions
Indeed, of all the 11 industrial partnerships launched by government to consolidate employer engagement around sector specific skills challenges, the EEIP has been most successful, creating eight trailblazer apprenticeships and stimulating more apprenticeship starts than any of the others, including those in sectors such as aerospace and automotive. And yet the threat that skills and talent shortages pose to networks remain barely, if at all diminished (see Skills by numbers).
Speaking about the imperative of radically altering our thinking about energy systems, Philip New, chief executive of the Energy Systems Catapult, told Network he is “really worried” about building the skills and capabilities the energy system needs in order to achieve transformation. He is not alone.
So what more can be done to bring more strategic focus to the way energy networks and the UK as a whole treat skills challenges so we can begin to fill gaps? Nick Ellins, chief executive of the National Skills Academy for Power, has some clear ideas, many of them targeted at government, but some for industry leaders to take to heart.
Read on for Nick Ellins’ thoughts on workforce policy consistency, sector attractiveness and skill mobility…
To start with, Ellins sets out his belief that the debate about skills and skills gaps in recent years has in some ways distracted stakeholders from a more important overarching question about workforce planning and development. “It’s led to people getting bogged down in discussing whether a new qualification is going to be an NVQ or an A level – the point is about creating a competent workforce,” he says.
“There are many small changes to policy coming out – the levy, minimum wage, migration policy, pensions changing, the Enterprise Bill, the Finance Bill – but there is no link between all of these that might give someone sitting in an organisation any idea of the overall impact.”
Nick Ellins, chief executive, National Skills Academy for Power
This is a challenge that is complex and demands better alignment between different elements of policy – including economics, education and employment – as well as regulatory levers and objectives such as resilience says Ellins. What does it all mean for the workforce? And how can this meaning be expressed in a way that helps companies confidently plan their requirements – both immediate and longer term?
For government, achieving a joined up and strategic message about the human resource pressures companies should expect in the future has an obvious starting point. Ellins says it is the National Infrastructure Plan (NIP). This document sets out the infrastructure projects government wants to be completed in the next decade to support its economic ambitions. It includes projects that will demand huge investment in national transport and energy infrastructure – investment that pushes beyond what is set out in business plans submitted by the networks to Ofgem.
In a skills document that accompanies the NIP, government acknowledges that achieving its goals will demand quick thinking to make the most of the available skills resource. By 2019/20 progress on the infrastructure programmes listed in the NIP is expected to reach a zenith, creating a peak in skills demand across multiple sectors, many of them requiring similar capabilities such as pipe and cable jointing and overhead lines skills, not to mention data handling and analysis abilities.
Despite this, the NIP and its accompanying skills document have not yet been used to significantly influence the way in which skills policy is developing, says Ellins, pointing to the new National Apprenticeship Levy as an example. The levy, which will effectively be an apprenticeship tax, taken from all employers over a certain size to fund investment in apprenticeship training – is aligned only with the government’s target to spur three million apprenticeship starts in this parliament.
In other words, without adjustment, it is a mechanism that might well stimulate more apprenticeship training, but not necessarily in those skills areas or even sectors that are critical to delivering the government’s parallel economic ambitions. “If it doesn’t do this, there’s clearly a question about how fit for purpose the levy is in delivering what the nation needs,” says Ellins.
Policy mismatches such as this mean industry must waste valuable time and resources picking through red tape, says Ellins. “There are many, many small changes to policy coming out – the levy, minimum wage, migration policy, pensions changing, the Enterprise Bill, the Finance Bill – but there is no link between all of these that might give someone sitting in an organisation any idea of the overall impact,” he says.
Read on for insight into Nick Ellins’ vision for ‘skills passports’…
A joined-up impact assessment from government is necessary to take a high-level look across all policy initiatives and map the likely impacts for a range of different business types. Such an assessment would be valuable to businesses in their workforce and investment planning, says Ellins, it would also be in line with the government’s commitment to the principles of “better regulation”, which aims to clarify and reduce the cost of bureaucracy and red tape to British businesses. Ellins says civil servants are “working hard” on achieving some of this more joined-up thinking, adding that the current lack of alignment across policy areas “should be relatively easy to change”.
Sore points for skills:
According to EU skills, the following job titles are some of the hardest to fill in the utilities industry today:
>site managers >project managers >power systems engineers > commissioning engineers > overhead lines people >substation engineers > design engineers
To read a viewpoint from John Mathers, chief executive of the Design Council about the shortage of design engineers in the energy industry, click here.
There’s no doubt that the utilities sector as a whole struggles to project an alluring image to young people – or more experienced individuals looking for a career change when compared with faster moving sectors like automotive, aerospace and electronics that can offer higher wages and overseas travel. Ellins, though, is confident that with the right level and tone of consistent marketing, energy networks can sell an attractive story to potential recruits.
While we wait for the fruits of this labour, what steps should industry take to improve on the impact their past and existing skills initiatives are making? Ellins has two areas in his sights – sector attractiveness and skills mobility.
To do so, however, he warns against overworking the STEM skills narrative and also urges companies to build on collaborative initiatives so they are truly selling a sector story. Typically, Ellins says, companies have tended to talk too much and too quickly about “skills and the skills ‘cliff edge’” when appealing to new talent. “But if you go into live businesses the actual issues are around replacing retiring workforce and getting people to wake up in the morning and realise why they want to work in the energy and utilities sector.
“We don’t need to talk to all of those people about the importance of STEM education. For many of them the story will be about being able to support their local community and put something back into it. So much of the story is about workforce and employment and less about skills and education.”
Getting the more emotive and lifestyle-based story right should lead naturally to a pipeline of appropriately motivated talent that is likely to want to remain in the sector, even if it moves about within it – which brings Ellins to his second key focus point for industry: skills mobility.
It’s already been mentioned that many of the skills needed to fulfil the requirements of the NIP are common across all the sectors involved, and it is certainly true that the skills required in the energy industry to meet the challenges of a decarbonising and decentralising the energy system are largely common across energy networks. “That’s where the industry could really work together,” Ellins enthuses, “to give someone a skills passport so that they can work across these areas and not see the gap – apart from some of the finer points of training, which we can tweak when they get into our sector.”
Improve training for heat networks
Better skills mobility could also ease urgent skills challenges for the emerging heat market which is suffering from an acute bottleneck in the availability of appropriately skilled engineers.
To read a blog on htis topic from Ian Manders, an independent consutant and policy advisor, click here
Such frameworks should let networks – and the wider utilities industry – develop more flexible approaches to finding resources to meet their needs, and give individuals more freedom to follow opportunities in the sector. They would alleviate fears that companies will find it impossible to individually recruit the number of people they need to work on upcoming programmes and should result in common frameworks for the accreditation and assurance of individuals. This in turn would minimise the amount of training that companies have to invest in for new recruits and make the money made available by Ofgem in the last price review for investment in skills go further.
In short, Ellins insists that the vision of skills passports and sector-wide assurance frameworks makes economic, operational and career enhancing good sense. And although it may seem a far cry from traditional business approaches to human resources and recruitment, he says it is a vision that chief executives on the board of the recently reformed EEIP have bought into, as well as a priority work area for groups in the National Skills Academy. It’s also an ambition that is technically achievable by making the most of EU Skills’ Talent Resource Platform, which matches talent with vacancies.
Ellins is clearly committed and passionate about bringing greater consistency, efficiency and pragmatism to the future of workforce planning across the utilities sector. And though he knows that volatility in government policy has recently burned confidence in the stability and longevity of collaborative approaches, his message is clear: it is only through retaining and growing collaborative approaches to workforce strategies that industry will truly begin to change its skills outlook.
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