The combination of rising capital costs and attempts to keep rates low have robbed Colorado Springs Utilities of its competitive edge — as far as hiring and retaining employees is concerned.

The municipal utility is having trouble keeping employees in many technical areas — from linemen to engineers — because its salaries have dropped below the national average for utility companies.

“We try to stay higher than the 50 percentile,” said Karin Hollohan, human resources manager. “But we’re going on the second year in a row without a wage adjustment — and now dropped below that.”

The problem is serious, she said. Some engineering positions stay open for as long as a year.

“These are highly competitive jobs,” she said. “The utility industry is seeing unprecedented complexity — changes in mandated requirements, conservation, security, renewable energy.”

And to complicate matters further, the utility industry estimates that half of workers in these critical jobs skills will retire soon — leaving a gap in workers who are able to perform skilled jobs.

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“We have to work to attract and retain people — people to operate the electric plants, to work on the utility lines, water and power engineers,” she said. “Our goal is to do more with less, but it becomes a challenge both with the aging infrastructure and to keep out labor budget low. When we looked at where we stand, we’re less competitive with other utilities than we thought.”

Labor is about 16 percent of the utility company’s budget — below the 22 percent it spends for capital improvements and investments. After a series of job cuts, slightly more than 1,800 people work at CSU.

“There’s no doubt we’ve lost ground,” she said. “We fell behind, and you can see that in recruitment.”

Turnover at the utilities is about 10 percent, which is twice the rate of other similar municipal utility companies.

“That’s something we’ve had to look at, and we found that people leave here in the five to 10 year range and in the five to 15 year range,” she said. “Other utilities have the most people leaving after a single year.”

Those statistics lead Hollohan to believe CSU is a “training ground” for other utilities that offer better pay and benefits.

“So we changed our pay structure to offer broader pay ranges, to give us more flexibility,” she said. “We’re going to be offering raises to those in the highest performance, difficult to fill jobs. It will allow people to be more selective in targeting the bonuses.”

The problem isn’t unique to CSU. The American Public Power Association reports that skilled trade positions will be difficult to fill in the upcoming years for most municipal utilities — more than two-thirds of its members expect to have trouble filling those slots.

The most significant challenges, according to the report, will be the “loss of knowledge and finding adequate replacements.”

“In 2008, public power is employing a higher percentage of employees with fewer years of service with the utilities than reported in the 2005 survey,” the report said. “This is evidenced by the 12 percent of the respondents who reported that the average years of service was less than 10 years, compared with 2 percent of the respondents in 2005.”

APPA says a discouraging trend is the decline in the number of utilities that have a formal plan to identify and develop candidates for senior management positions. During 2008, only 14 percent of the respondents had a plan.

CSU is planning to address the recruitment and retention issue by working to change the way they give raises.

“We’ve targeted some jobs for raises, but these are by no means across the board increases,” she said. “We want to make sure we’re paying those people in key positions enough so they stay through retirement.”

The company is not facing shortage in administrative or customer service areas. Instead, the key shortages are in linemen and engineers — jobs that take a while to train replacements.

Some of the jobs are journeymen positions that require a period of apprenticeship before they can work alone. Each apprentice hired must have a full-time, journeyman working with them.

“We do have that program in place,” she said. “But we can’t hire all the apprentices that we could under the law because we don’t have enough full-time workers. It also takes a period of years before those people can work alone, so it can be difficult.”

But the utility company is working with other groups to increase its pool of technically skilled workers. It has a program with the engineering school at the University of Colorado at Colorado Springs, for example.

UCCS offers courses in power engineering as part of the Department of Electrical and Computer Engineering Department and is working closely with Colorado Springs Utilities to develop a program in that field, said the dean of engineering R. Dan Dandapani.

APPA recommends utilities conduct a work force analysis and develop a strategy to deal with the workforce shortages and gaps.

“Public power is faced with an aging work force and the potential retirements of a large percentage of its employee base,” the report said. “The electric utility industry has been undergoing, and will continue to undergo, dramatic changes. About 26 percent of utility companies believe the work force is a great challenge to their utilities ability to fulfill its mission.”

2 COMMENTS

  1. This is another whining attempt to justify whopper, runaway salaries at the Utilities Department.
    Fact “some employees” actually quit is a real whopper. I am not aware of any industry that has zero turnover rate in america. The fifty percentile statements don’t match the resignation rates. The fact that they have excellent retention rates for the first five years of employment is interesting. The newest employees are the lowest paid and they stay. Therefore: Money is not why the older employees are quitting.

    Fact: The falling employment numbers match similar trends across all industries in the U.S. We are becoming more productive as a nation. Automation is occurring in all industries. In farming, automation and efficiency has dropped employment to less than 3% of the public making their living as farmers. But they produce all the food we eat. Too bad the Utilities department has fallen so far behind farming in their efficiencies. We have the highest water rates in the western United States. That is not efficiency. It is a face plant failure by Utilities.

  2. I worked for the Water Department in the clean-drinking water laboratory for several years. During the last three years I was there, the powers that be put an ‘engineer’ in charge of our laboratory. This is difficult to understand since according to this article there seems to be a real shortage of engineers within the utility confines. During the next two years after he was placed in a managerial position over the lab, nineteen people quit their thirty dollar an hour jobs. Yet no one above him thought this was unusual. Many of these people had talent (or as I prefer to call it, knowledge of the infastructure) that was lost because of having to daily explain to a micro-manager (you have to be one of those if you have NO idea which end of a pipette to hold) why and how they were doing their jobs.
    There is one other possibility for why people leave these jobs though. Once while I was still employed by the utilities, we had a job satisfaction survey. Approximately half the respondees said they were underpaid. I believe that was because this is the only job they have ever held. Someones brothers, uncle got them their job straight out of high school when they were 18 years old. No one I ever know who had worked elsewhere ever complained about the amount of money they were paid within the utility department.

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