Bill Kerr: The utility industry in the United States has been staring change in the face for some time as its workforce ages and the pool of viable replacements looks alarmingly shallow. Faced with what they called “a silver tsunami” of retiring workers on one side and a lack of interest from young people with the right skills on the other, utilities across the country came together to solve the problem. Their solution was to create the Center for Energy Workforce Development, or CEWD, a non-profit consortium that works with partners in education, government, and organized labor. Its mission is to recruit and train a diverse new generation of workers capable of maintaining the existing infrastructure and carrying out the transition to new technologies and systems.

Welcome to the Managing the Future of Work podcast from Harvard Business School. I’m your host, Bill Kerr. Today I’m talking with Beth Reese, Executive Vice President of Shared Services at Southern Company and Chair of the CEWD consortium. Beth brings a dual perspective as company executive and industry group leader to the task of replenishing the talent pipeline, in large part by selling young people on work that is essential but maybe a bit unglamorous. In many respects, the utilities are the proverbial canary in the coal mine, as US organizations across the board struggle with skills gaps and demographic shifts in their workforce. Welcome to the podcast, Beth.

Beth Reese: Thank you.

Kerr: Beth, can you maybe start with a bit of background about Southern Company Gas and the work that you do.

Reese: Southern Company is a premier energy provider, mostly in southeastern United States. We serve four and a half million gas customers and four and a half million electric customers. We’re located in Georgia, Alabama, little bit of Mississippi, and Illinois. We’re really focused on the future of energy and what that looks like. Southern Company Gas was acquired by Southern Company in July of 2016, and it was really an opportunity for Southern to be in “all of the above” in energy sources. We look at natural gas as a bridge fuel to the future, and it was really important for natural gas expertise to be part of Southern Company’s portfolio.

Kerr: Cool. Growing up in Alabama, my family was a customer of Southern Company for many years. This is a fun podcast that way. You’ve characterized the skills gap as a cliff that we’re approaching. Can you elaborate a little bit on that?

Reese: Well, I think in about 2006, we were really looking at the retirement-eligible employees. We saw that we had a large number of them getting ready to retire, and we were very concerned. As bad as the recession was for us, though, that actually helped us, because people were looking at their retirement accounts and other things that the economy impacted, and that sort of extended that out. At the same time, however, we’re still looking at—we continue to look at—how do we make sure that we transfer those skills as our workforce gets retirement-eligible?

Kerr: This retirement in the demographic shift is one big driver that we talk about in this podcast. Another is technology. Can you just give a little bit of background on how technology and automation are affecting the job mix and skills at Southern Company?

Reese: How we do our work has really transitioned and transformed over the past 15 or 20 years. At one time, when I first joined the company, we actually had employees who were illiterate, and they could still work for us because they were really just digging ditches to put a gas pipeline in. Digging ditches still stays the same—we haven’t figured out a way to transport natural gas any other way other than through pipes—but now we have a requirement that everybody has to use technology in order to track the work that they do. We’ve also had new regulations that require us to track our infrastructure a lot better. That’s a good thing, but it does require a higher skill set for our employees. As technology comes in—and especially on the electric side—it changes how we deliver electricity, either by enabling distributed generation, how we manage our generating plants themselves, how we manage the wires. All of that requires a different skill set. Then there’s another layer about cyber. Our CEO, Tom Fanning, is very engaged in cybersecurity. That’s a whole other level of technology and thought that you have to put in to the workforce.

Kerr: So, as you think about the groups of occupations that you’re trying to fill, what are the hardest to find the talent for?

Reese: Well, I think it’s on two ends of the spectrum. One is, the skill sets that we’re competing with everybody to get, which is things like cyber or how to bring in thoughts about new technology and how that drives how we think. So we’re competing with the Apples and the Googles and the banks and other infrastructure companies that aren’t just electric or gas infrastructure. So that talent is very hard to get. And we don’t need a lot of it, but we need the right mix. And then, the other side is the people who really do the work on the wires and the pipes or in the generating plants. All the utilities have been putting more and more infrastructure on the ground and trying to compete for the same talent. So that’s been a problem, too.

Kerr: Tell us about how you’ve sort of changed the sales pitch for the utility industry.

Reese: I talked about that recession in 2006, 2007, 2008. I think a lot of people came to appreciate the utilities at that time, because we were steady jobs, we paid really well. But the whole push for a four-year education has really worked against us. So we have come together as an industry through the Center for Energy Workforce Development to try to tell our story. We’re taking advantage of a push for hiring military, we’ve taken advantage of the push for STEM or STEAM [science, technology, engineering, arts, or mathematics]. So we’re trying to tell our story everywhere we can. And that’s really our biggest opportunity.

Kerr: We’ve approached this at times on this podcast as talking about the middle-skills gap. Is your experience with this middle-skills challenge reflective of data that you see out there? Is it one that keeps your CEO and the operating officers and so forth up at night as to how we fill this group of workers?

Reese: It absolutely is, and I’ll give a very tangible example of that. We’re building the only new nuclear plant in the country—Plant Vogel out in Georgia, towards Augusta. We have gone through a lot of effort to get the right people on that site to keep us on track with what we’re trying to deliver there. And that has been a real challenge. We thought about even going up to Canada to bring skill sets down, because there’s a real need for people who weld things. And you don’t hear that as one of the sexy jobs out there, but it certainly is, and it pays quite well, and there’s a lot of competition for it.

Kerr: What have been some of the techniques or tools you’ve used to try to burnish up that pipeline, build it up a little bit more?

Reese: One of the things is really partnering with the right groups. So partnering with labor has been really important for us, and the IBEW has been a great—that’s the International Brotherhood of Electrical Workers—they’ve been a really great partner for us helping to go attract talent. That’s what they’re there to do, partly. And for us to make sure that we look at them as a partner—we don’t look at them as something to be afraid of. We look at something to bring to the mix.

Kerr: Beth, you’ve mentioned the importance of organized labor for the work that you’re doing. Can you tell us a bit more about how you interact with unions, and what makes it productive?

Reese: Their role, really, is to help attract workforce as well, similar to what we’re trying to do. They want to keep their people employed, and they want to be able to tell the story, too, so we partner with them.

Kerr: Can you tell us a bit about how apprenticeships interact with this work that you do with unions?

Reese: It depends on what union you’re looking at and what role they’re playing. In Illinois, when I was up there, we worked with our contractors to work with the local labor unions who had put the apprenticeships in and who had the labor halls that were bringing in people. We worked with them to ensure they were employing that type of labor. At Southern Company, we think about the IBEW as a partner with our workforce that we are paying who happen to be union members.

Kerr: So there’s this cross-collaboration between organized labor groups, companies, and non-profits in this space.

Reese: That’s right.

Kerr: You thought about these middle-skills jobs. How much do you expect people to have the skills when they show up at the door, or your screening on that to recruit them in, vs. Southern Company will take the talent and add in the extra ingredients that it needs?

Reese: So there’s some basic skills that are required to enter into the workforce. One is literacy. But there’s actually a fundamental math test that has to be passed. So we do expect that skill, although even that we’re finding to be a barrier for our diversity and inclusion initiative. So really even challenging ourselves on how to think about that, because we really will train most of the skill sets we need to be able to work on in the plants, or on the pipes, or on the wires. So we want people to have sort of a basic understanding. The most important skill that I see is mechanical aptitude. And that’s something that I think we’re moving away from, because we have video games and other things, but we don’t have cars that people tinker with anymore; they all have computers.

Kerr: Mechanical aptitude, again, maybe help our listeners and even a podcast host. You got a wrench, you’re able to do stuff with it?

Reese: You got a wrench. You know what a wrench is. You know what a screwdriver is. And you’re able to work it, and you’re able to go up to a meter and put a wrench on a nut or bolt and unscrew it, and you have that natural ability. Not all of us have that. But that’s a really important skill, because our people are doing those things. They are in people’s homes, lighting furnaces, crawling on the floor. They’re in ditches, and they’re working with their hands. They’re willing to be outside when it’s 100 degrees or when it’s minus 20 with the wind chill in Illinois.

Kerr: Up here it gets even a little bit less than that. Can you also sort of say a little bit about how attractive these jobs are? Because they’re not low-paying jobs.

Reese: No, you can be making six figures pretty quickly in these jobs. The thing we haven’t done a great job of is reminding people of that. These are very good companies. They’re solid—all of our companies are about 100-plus years old. They’re all very stable companies.

Kerr: Tell us a little bit about the diversity side. What dimensions are you working to expand on? What are some of the tools or approaches to field more women candidates, more minorities?

Reese: We’re focused on making sure that our workforce reflects the communities we serve. So that’s everything from making sure that we’re thoughtful and intentional about attracting diverse candidates, if you would, into the companies, but also allowing them to be successful once they’re in. It’s women, it’s military. We’ve had a huge focus on military candidates, because a lot of folks in the military have that mechanical aptitude—and they’ve actually demonstrated it, learned it—they have tons of good skill sets. Mechanical aptitude and leadership. These are great skill sets for us. Obviously, African Americans and all sorts of every other diversity. Southern Company several years ago really looked at how to think about diversity and recruiting Hispanics and put forth a very intentional effort to recruit engineering students from Puerto Rico.

Kerr: If I imagine your multistate region, they’ll be some locations where it’s predominately about reaching out to the African American community, other locations where there’s maybe a military base nearby, so its people who have retired. How different is it across the geographies in terms of the playbook that you need to run?

Reese: You know, it is a little bit different intention in different areas, and it’s probably not as broad as just Georgia and Alabama. It’s very localized as to how we think about that.

Kerr: Okay, you thought about this big-talent pipeline that you’re creating at the Southern Company. What are some of the big questions that you are grappling with right now? What’s the thing that you sort of put on the agenda? “For 2025, we want to be able to do this”?

Reese: Our CEO shared at a recent executive meeting that he really thinks the next 10 years are the industrial revolution for the energy business. And I think that’s right.

Kerr: Before we go any further, that seems like a pretty big statement, so let’s unpack it a little bit.

Reese: I don’t know that we’ll revolutionize how we deliver natural gas or how we deliver electricity via pipes or wires. I think that the access to distributed generation—so what that means is somebody generating electricity closer to their work—they’re usually commercial, industrial businesses, so they’re businesses—what that means, us being able to take that back onto the electric grid. Rooftop solar will become more and more accessible, people being able to drive electric cars and being able to charge them overnight. We’re putting extra electricity back onto the grid. How we deliver that energy and how it’s generated, what that mix looks like, really, I think, over this next decade, will be tremendously different.

Kerr: Okay, now let’s go back to that workforce thing. So you’re saying the industrial revolution for utilities is on the horizon.

Reese: Yeah.

Kerr: What do you need to do to get ready?

Reese: We still need people who have mechanical aptitude, are willing to work outside, who are smart. Leadership is a big thing. What I always look for is how does somebody lead, whether your title has a leadership title in it or not. A lot of our workers out there are really independent contractors in their own trucks with small crews, so they have to be able to make good decisions. They’re dealing with safety all the time, so they have to be able to work in a safe environment, create a safe environment. So, you know, will it change a lot? Maybe not. But I do think we have to bring in innovation, which is something we’re not as good about.

Kerr: You just mentioned the contractors that Southern Company uses, in an era where people are talking about the gig economy and kind of blended workforces, you’re already there. You have both full-time employees and also contractors. How has that shifted your workforce-development strategy? How does it play in your thinking about the types of workers you employ?

Reese: Well, I think it has required us to really think about our contractors as workers. First, you look at contractors as just a way to supplement your workforce that’s a little bit, perhaps, less expensive, because you don’t have to pay them for vacation; you pay them when you need them. As the war for talent, really, in this area has continued, we’ve been very focused on, well, what makes sense for our contractors to do? And how do we make sure that we’re helping them attract talent? Then you look at how are we helping them partner with the organized labor? Then, ultimately, we finally, at Center for Energy Workforce Development, decided that we should have them with us as partners, and we should really look at them as partners in this whole workforce development. It took us a while to get there. We started in 2006, and brought them on in 2017. They’re an active voice and really important. They provide us, sometimes, a pipeline for talent, too.

Kerr: Going now to CEWD, you have two different roles: You’re the Chair of CEWD, but you’re also, of course, a customer through Southern Company. As a utility, what attracts you about CEWD? What makes you become a partner in that? How do you use the resources? Talk to us a little bit about the company perspective.

Reese: The company perspective of CWED is that they’re helping to bring together a utility perspective. They’re really thinking about, not just a company, but how we think about it as an industry. CEWD leadership has done a very nice job of partnering in some areas that the utility companies wouldn’t naturally go to, like school boards. Some of the stuff we were able to do up in Washington, we would have to do that a little bit differently. And then one of the things that we’ve done nicely at CEWD is put together a state consortium, where the state—all the utilities within that state—come together to take down kind of a national strategy down into a state perspective. From a company, it gives us an opportunity to work with some peers that we may not naturally work with. It also allows us to think bigger than we would if we were on our own.

Kerr: Okay, so it shares information across the nationwide industry, and then you have to figure out how to apply it locally.

Reese: That’s right.

Kerr: Are there limits that you see as to what CEWD can or should be doing in the space of skills development?

Reese: Well, I would say at CEWD we’ve tried to take a pretty broad swath at a lot of things. We have some tools out there that allow people—individuals—to get certified. So I don’t know if there are places that we shouldn’t be doing, but we should be doing a better job of making sure that all of our companies understand what we’re doing, making sure that everybody who’s a member understands what the tools are, and are we really leveraging them to be able to achieve the mission we’re all trying to accomplish.

Kerr: We have a previous podcast with Ann Randazzo, the Executive Director of CEWD, that talks a lot about the great work that you’re doing there. Do you think that the program needs to become a little bit more mandatory—a little bit more requirements that are being put into it—or keep it more as like a resource for companies to take what they pick out of that?

Reese: Well, that’s a very interesting question that we haven’t really challenged ourselves with. But, given the fact that, while we are very collaborative in the workforce development space—but at the end of the day, we’re also competitors, especially in the public markets—a requirement would be a really hard thing to do with CEWD. I think what we’ve got to continue to do, as a board, is making sure that CEWD is delivering what it needs for the companies to be able to leverage it. The question comes on whether it should be required would indicate to me that we’re doing stuff that our companies don’t want us to do. If we’re doing everything at CEWD that our company members want us to do, it shouldn’t be required.

Kerr: They should be opting in just on their own volition there.

Reese: That’s right.

Kerr: CEWD originally got created about 10, 12 years ago for what was the silver tsunami at that time, and then you shifted more into technology development. As you think about this industrial revolution that is coming to the utility space, how do you think CEWD is going to evolve or need to jump over the next 10 years to get in front of that?

Reese: About 2016 or so, we took a chance, which was about the 10-year anniversary of CEWD, we took a chance to really challenge ourselves to say, “Is CEWD still relevant?” We had our first in-person board meeting that we brought everybody together and really went through more-strategic planning. We validated that we are, indeed, still relevant. I think that one of the opportunities that we have is to continue to say, “Relevant how?” So as we think about that industrial revolution, and we think about distributed generation, and we think about some of the other things—disruptors—that are coming into our industry, including other players who are not utilities, how do we think about that? I don’t think we’ve quite gotten to that question yet. There’s a real fear in the utility industry that Amazon and Google are going to take over the world, including ours.

Kerr: It’s not just in the utility industry.

Reese: We haven’t yet addressed that with CEWD, but I think that’s part of the next phase of what we do.

Kerr: And, maybe, even you want to invite them in.

Reese: Well, there’s a little bit of that, yes.

Kerr: Across your time as Chair of CEWD, what’s been the most surprising thing that you’ve experienced?

Reese: One, we have a lot more tools than I probably even knew that we did. We don’t tell that story very well. While we’re put together to tell a story about the industry, we don’t tell our own story very well. Two, I think that we have validated our relevance, and that, as much as we were trying to solve a problem in 2006, that problem still exists. The third thing is, we’re not as good at succession planning there. We’re not good at succession planning internally at CEWD, either.

Kerr: Okay. One of the things that I’m sure you get asked a lot is application of CEWD to another industry space, because there are a lot of other industries that are grappling with a shortage of workers for middle skills.

Reese: And I would say: Look at dirty jobs. What that focus has been—has been—on these jobs that are more like ours. So that has brought a focus on these industries that pay really well and may be a little dangerous, a little different. But that’s very powerful, too. Is there a way that people can collaborate where they’re still competitors? I think we, as a utility industry, should collaborate with other industries, as well about how to tell the story about our jobs. I look at the other industries as our customers, because they are. We want them to be healthy. It’s really important for us, from an economic-development perspective, to make sure that the states that we serve also have really good workforces and are developing those workforces.

Kerr: As you think about both your work at Southern Company and also CEWD, any parting advice you would give to business leaders about talent-pipeline management and making sure that they’ve got a good skills base for the future?

Reese: I think it is important to be focused on all the time. It’s important to let the people in your community know what you’re focused on. A previous job I had, I had the opportunity to be the president of Nicor Gas, which is very focused in Illinois. One of the things that I did was really partner with the community colleges to tell our story. Whether or not it made a difference in our workforce, I don’t know, but it was really important for the people who are touching the students in our local areas to know what jobs we have. I’m not sure that all of our customers, who are employers, do a good job of that, either. We don’t do a great job. I think that’s an opportunity for all employers to really tell their story, because all of us employ not just the people making the product and ensuring that it gets delivered, but we also have a lot of back-office work. We hire everybody, from accountants to engineers—we hire a lot of those—to lawyers, HR people. While middle skills is a very important part of our workforce—and is the predominant part of our workforce—we hire a lot of other people, too. I think that’s the advice I’d give to all of us: that we need to be thoughtful about how do we engage where we are living to make sure people know we have great jobs.

Kerr: It’s been our pleasure to have Beth Reese, Executive Vice President of Shared Services at Southern Company and also the Chair of the Center for Energy Workforce Development. Thanks, Beth.

Reese: Thank you.

Kerr: And thanks to all of you for listening in.