Glendale Power and Water sets gold standard for AMI
By Heather Anusbigian, CMO, SmartGridCareers.com
Heather Anusbigian, CMO, SmartGridCareers.com
With nearly two-thirds of DOE AMI grant projects complete as of Dec 31, 2012, utilities who adopted a wait-and-see attitude are anxiously awaiting the business cases that will get them off the dime one way or another. While most are looking for the bottom-line ROI associated with smart grid investment (and rightly so, as any future technology expenditures will be closely monitored by governing bodies and consumers alike), few, if any, are anticipating the human capital needed to pull it off successfully.
I had the opportunity to talk at length with Glenn Steiger, former general manager of Glendale Power & Water, while at DistribuTECH in January regarding the human capital challenges involved with unleashing this technology within a utility. Glendale was the first to sign on the dotted line with the DOE, and is recognized as having set the gold standard for AMI deployment. While a human resources roadmap of sorts was part and parcel of the grant application process, Glendale had to predict the challenges that lay ahead, without the benefit of any previous experience of their own or being able to glean any insights from others in the industry. Having deployed 120,000 fully operational smart meters on time and within budget, Glendale is now able to share the following lessons learned.
Information Technology Skill Sets Are Critical
With an AMI deployment, the scope of IT functionality extends beyond the traditional data center and the operations that it manages out to the utility's service territory. The amount of data and the type of processing are radically different from what a utility has traditionally done. Building the technical architecture and systems to support advanced metering capabilities requires utilities to prepare for a dramatic increase in the volume of data brought into the organization and a shift in the way it is processed. Interoperability among the various technologies is also key, and let's not forget about data storage and its related compliance, archival and disaster recovery requirements. In addition to these, data analytics will become critical to future service and customer engagement strategy and policies.
Whichever human resources strategy a utility decides to adopt, its success will be determined by the stage at which the human capital factor is incorporated into the planning process.
Few, if any, utilities can successfully navigate these challenges without incremental technical resources. Additional application, software and firmware engineers will be needed before, during and after deployment. At first blush, the addition of a few new technology folks doesn't seem like a challenging task. However, the current engineering shortage is taking its toll on employers seeking to staff their US-based facilities. Just ask the predecessors to deployment, Smart Grid technology vendors. One of their continued pain points is the level of difficulty in identifying, recruiting and retaining the engineering talent needed to move their products forward. While somewhat bleak, a utility can dramatically improve their chances of success by making the following tweaks to their overall recruitment strategy:
Open the door to relocation: While larger utilities in tech-rich geographic areas will have less of a problem finding local talent, competition in areas like the Silicon Valley is fierce, and relocation may still be necessary to achieve optimal staffing levels. Smaller utilities in less populous areas will have to budget for relocation to attract the right talent. Glendale accommodated relocation for close to 60% of its new technical staff.
Ratchet technical compensation budgets 15 percent-30 percent: It's a real-world example of Economics 101 – demand exceeds supply, and as a result the price of labor is rising. While it may be more difficult for municipalities and co-ops to get budget increases approved, it is vital to finishing a deployment on time. Few utilities (or vendors for that matter) consider the opportunity cost of a position left vacant while searching for an employee who will accept less than the going rate. Not to mention the declining employee retention rates that result. Glendale experienced a 15 percent to 20 percent increase in technical labor cost.
Anticipate a two-three year technical employee shelf life: "Techies" are on the two to three year plan. Motivated by projects that will have a significant impact on a business, they will work night and day to complete a project, but when it's done, they are on to the next best thing – which in their minds is rarely with the same employer. Instead of avoiding employees with a "job hopper" resume, utilities need to embrace these candidates, as they are the worker bees who are committed and able to successfully complete a project on time. To compensate for this inherent attrition, employers should adjust their hiring strategy accordingly, consistently filling the pipeline with like candidates to take their places when the time comes.
Consider contracting arrangements to jump-start project success: Finding full-time employees with the right skill set is rarely expeditious. Techies naturally gravitate towards contract agencies as they offer opportunities that are in line with their two-three year plan. While more challenging in less populous areas, finding a reputable contract workforce agency can significantly speed up the process of finding qualified talent. Glendale relied on contracted human resources to ensure their deadlines were met. This non-traditional workforce also offered them a workaround to the challenges posed by the often lengthy and certainly less feasible salary increase approval process imposed by the municipality.
- Partner with specialized recruiters for long-term success: Niche recruiters in the smart grid sector can add significant value if they have done their homework. A specialization in this unique sector can abbreviate the hiring timeline as well as offer unique insights into compensation requirements, opportunistic hiring opportunities and human resources game plan development and maintenance.
Breaking Down Silos: Smart Grid Technologies Demand Cross-Functional Teams
Finding top-rated technical talent isn't the only challenge utilities will face. The deployment of AMI technologies requires multiple functional areas to work in tandem to ensure its successful implementation. Not unlike the vast majority of utilities, Glendale's human capital worked in silos, rarely interfacing or collaborating with each other. Prior to the introduction of smart grid technologies, this practice was rarely necessary for the utility to function. However, AMI deployment triggers a need for a more holistic approach to the utility's operations.
To facilitate (or "force") this interaction, Glendale created a smart grid operational command center -- housed in a completely different facility. Contract IT personnel, internal members of the IT team and operations team members sat side-by-side day in and day out. Their proximity alone facilitated communication, identified areas of shared impact, and created a sense of community and common purpose. Employees were rotated in and out of the command center to give everyone an equal chance to participate. It became an on-the-job training center that ultimately ensured Glendale's ability to deliver on time and within budget.
Retraining Displaced Employees Offers Economic Benefits
AMI renders some job functions obsolete, and creates additional requirements for others. Meter readers, for example, are no longer needed. Instead of a mass layoff, Glendale repurposed some of these employees in other areas of the utility. Representing some of the youngest members of the utility workforce, with an inherent interest and ability in the technological arena, some of these employees were able to fill some of the new "techie" roles that evolved as a result of incorporating AMI technology. Using existing employees, where merited, to fill new roles will not only enable a utility to avoid the drama (and water-cooler scuttlebutt that significantly reduces productivity) associated with mass layoffs, it can also reduce the length of time associated with getting an employee up and running. Already familiar with the utility's culture and operational procedures, a repurposed employee can make contributions far before a brand new hire.
Whichever human resources strategy a utility decides to adopt, its success will be determined by the stage at which the human capital factor is incorporated into the planning process. As business cases become more readily available, human resources should not be left out of the equation, as they carry both hard and soft costs that can undermine expected ROI when not considered.
About the Author
Heather Anusbigian directs the marketing strategy and product development for a recruiting model designed to meet the unique human capital needs of the smart grid and renewable energy sectors. She has played an instrumental role in leading an initiative to identify a national database of candidates with the emerging skill sets required by the integration of two-way communication technology into the grid.