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The Topic: Workforce Planning WORKFORCE PLANNING THE TOPIC 14 | 4TH - 10TH AUGUST 2017 | UTILITY WEEK O ur recently published Partnership Workforce Renewal and Skills Strategy highlighted the chal- lenge that exists over the next decade for our sec- tor: protecting the quantity, quality and responsiveness to change of the sector's most critical resilience resource – its people. The Skills Strategy sets out how the sector's leaders will act together to ensure sustainability and where policymakers and regulators need to play their part in ensuring resilience and a sector-wide approach. Recent data published by Office for National Sta- tistics amplifies that need and indicates that the UK's labour market is arguably tighter than at any point since records began. The employment rate, or propor- tion of people aged 16 to 64 who were in work, reached the highest level in March 2017, at 74.8 per cent, since comparable records began in 1971. At the same time, the unemployment rate has fallen to its lowest level since July 1975, 4.6 per cent. The lack of labour availability is also reflected in job growth across the economy. In the 12 months to December 2016, the number of jobs in the UK economy has grown by just 1.6 per cent. During the same period however, the number of jobs in the water supply, sewer- age and waste management sector has grown by 8.3 per cent and the power and gas sector grew by 7.9 per cent. With the exception of jobs growth within what is termed "private households", our sector's growth rates are cur- rently the highest of any sector of the UK economy. The Workforce Renewal & Skills Strategy predicts a gap of 221,000 workers by 2027. The lack of suitably skilled labour is reflected in the prevalence of vacan- cies that are proving hard to fill by employers. While companies oen get many hundreds of responses to job adverts, and may think the market will provide, the lack of applicants with the required skills, qualifications or experience (known as "skills shortage vacancies") is significant. In the last UK Employer Skills Survey (2015), there were an estimated 210,000 skills shortage vacan- cies reported by UK employers; a significant increase from the 150,000 reported in 2013. Six per cent of all employers reported having at least one skills shortage vacancy, up from 4 per cent in 2013. Within the energy and utilities sector, 36 per cent of all vacancies were skills shortage vacancies – the highest proportion of any sector; compared to a national average of 23 per cent. In 2012, Energy & Utility Skills provided evidence of skills shortages affecting 13 occupations within the electricity transmission and distribution sector. Many employers reported no unemployment among the appro- priately skilled workers, and that while applicants for key roles came in bulk, there was a dearth of those with the required mix of skills, qualifications and experience. Consequently, our sector faces its existing work- Comment: Nick Ellins, chief executive, Energy & Utility Skills Protecting workforce resilience in the energy and utilities sector force challenges plus new political uncertainty and the approaching Brexit adaption. Resilience of the workforce will require a concerted team effort from policymakers, regulators, regulated business, delivery partners and the whole supply chain. If we thought we could just leave it to the market, we will see our costs rise and efficiency fall. If we thought we could draw in the unemployed, less than one per cent (3,000) of the 514,000 Jobseekers' Allowance claimants in April 2017 are seeking employ- ment in the broad occupations which include the 13 job titles on the UK's Shortage Occupation List. It is time to act to ensure resilience. The utilities sector can expect to face a talent acquisition challenge for some time to come. As the Skills Strategy sets out the approach, the sector needs some early focus from its new government: • Explicit recognition of the importance of strategic workforce renewal within the future visions, strate- gies and policies of all the key sponsoring govern- ment departments and regulators. • Consistent application of skills policy across the four nations to avoid employers having to incur increased costs and red tape through multiple rules and regimes. Utilities businesses and their delivery partners increasingly operate for domestic and retail customers across the UK. • Resilience duties to include ensuring a sustainable and competent sector-wide workforce, including rec- ognising the workforce needs within the vital policy making and regulatory bodies. • Better co-ordination between policymakers – across the four nations – to ensure that all employment and skills policy has strategic co-ordination, complement- ing employer needs, and supporting an energy & utilities sector that underpins the whole UK economy and serves 65 million of its citizens every single day. Industry New jobs Replacement Net demand requirement Gas transmission and distribution* Remain stable 22,000 22,000 Power 10,000 53,000 63,000 Waste management 9,000 53,000 62,000 Water 2,000 61,000 63,000 Smart meters 10,000 1,000 11,000 Total 31,000 190,000 221,000 Source: Energy & Utility Skills workforce planning data NUMBER OF PEOPLE ENERGY AND UTILITIES COMPANIES WILL NEED TO FILL FORECAST VACANCIES BY 2025 20% the proportion of workers in engineering, craft and technical roles aged over 55 in utility asset owners POWER WATER GAS 24% 18% 20% Source: Energy & Utility Skills