Who will keep the lights on?

When I tell people electricity is a family business, I mean it. My grandpa spent 30+ years climbing poles in rural Texas, and he hired my dad who is still in the business after 40 years – first as a lineman and now as a COO. My first high school job was sweeping the warehouse and tackling odd jobs in the summer heat – almost two decades later I’m still working in the industry I love.

Being the son and a grandson of linemen, I know the physical toll that it takes. I’ve seen the hip replacements, the bad backs, and the sleepless nights that come from working in the aftermath of a thunderstorm.

If you take these two anecdotes together, you can see the impending blue-collar labor shortage looming in the energy sector. Years of experience are about to walk out the door, and the next generation has little desire to enter through it.

Utilities, like oil and gas, face the pending retirement of 1/3 of the workforce by 2025. Some believe the real number could be as high as 60% by 2030.

At the same time, the demands of the field are evolving. By 2030, the smart-grid will create 125K jobs – up from 20K in 2020. These jobs may be different, BUT they rely on institutional knowledge from workers who have spent their entire life in the industry to get up-to-speed.

Unlike the modern software businesses of today, utilities and energy companies didn’t keep “wikis” in Jira or a company intranet. Like oil and gas, utilities face the real possibility of paying retirees to return as contractors – likely at higher rates.

Additionally, there’s no guarantee the pipeline of potential employees comes to fruition.

Utilities have a branding problem with the generations who will potentially fill these jobs. According to a recent PWC report, they are viewed as stale, dirty, and low-paying.

Of course, these are problems that can be solved. The solar and wind industries are two of the fastest-growing in the US – both are cutting-edge and contribute to the global good.

The benefits of a career in the power sector don’t align with the wants of millennials and Gen-Z. This group places a higher priority on work-life balance, is driven by positive impact, and expects to have multiple jobs during their career.

The generation of my grandpa and dad went into the sector because it was stable and offered great long-term benefits like pension plans – both of which matter less to younger generations.

This evolution of workforce demographics will place stress on the utility sector, and “when big markets change, technology firms can rewrite existing economic pathways“.

The first, and most obvious, opportunity will be for software focused on connecting the workforce and enabling knowledge management. There is no dominant platform in the way that Slack, Zoom, Atlassian, etc… dominate the tech sector.

But, the bigger opportunity lies with startups as a whole. While knowledge workers may not view utilities as aligned with their beliefs, they do see these qualities in mission-driven startups.

These startups have a unique opportunity to create massive wealth while creating outsized positive impact – a combination that is already beginning to attract top-tier talent.

The evidence is clear, utilities will need an influx of talent at all levels or must do more with less. Regardless of which path they take, startups in the sector have an opportunity to play an outsized role in helping them through “the great crew change”.

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Kevin Stevens is a Partner at Intelis Capital.