Preserving knowledge legacies: workforce aging, turnover and human resource issues in the US electric power industry

Abstract

The aging of the workforce is believed to be a potential threat to productivity of companies both in the US and worldwide. High levels of turnover that may result from workforce aging could cause short-term as well as permanent loss of knowledge critical to firm operations and customer service. While there is a wealth of research regarding the causes of turnover, there is comparatively little research on the actual effects of turnover, particularly involuntary forms of turnover such as retirement. Focusing on the US electric power industry, whose employees have average ages and company tenures among the highest in the world, this paper explores the aging workforce issue both qualitatively and quantitatively. Results from an executive survey encompassing companies representing over 75 per cent of the industry's workers affirm that workforce aging is the electricity industry's dominant human resource (HR) concern but that it is interrelated with many other top HR issues, including skill shortages, leadership, and transition from an ‘entitlement-based’ to a ‘performance-based’ culture. Implications of prior literature on organizational learning, turnover and socio-technical systems theories are discussed, and propositions are offered as a framework for further research on the general effects of potential knowledge loss due to aging-related turnover.

Keywords:

• Aging workforce
• turnover
• electric power industry
• organizational learning
• knowledge transfer

Acknowledgements

The author gratefully acknowledges the financial support for this research provided by the Alfred P. Sloan Foundation and Carnegie Mellon University's Electricity Industry Center. Gratitude is also extended to Gail Pesyna, Stephanie Boraas, Lester Lave and anonymous IJHRM reviewers for productive and insightful comments.

Notes

 1 Following Price (1977: 4), turnover is defined as ‘the degree of individual movement across the membership boundary of a social system’.

 2 Only employees of electric divisions of combination utilities and holding companies are counted. Power marketers and traders with no generation, transmission or distribution assets are excluded. Electric-only employees obtained from company websites, SEC reports, or public regulatory filings.

 3 To ensure the confidentiality promised to all participants, no additional data concerning the respondents can be made available (including descriptive statistics for each coding category described in Appendix 2).

 4 The IBEW represents 85 per cent of unionized workers in the US electric power industry (IBEW, 2003).

 5 The situation is not improved substantially by removing mid-tier issues from the MCA.

 6 While the position of IPPs on the MCA map appears to have face validity, the low number of IPPs relative to other types of respondents infers less predictive power associated with IPPs.

 7 Although the IPP category is also found in this quadrant, the number of IPPs who responded to the survey is significantly lower than other categories.

 8 Source: Author conversation with IBEW executive responsible for the electric power industry.

 9 Only three respondents listed more than five HR issues.

10 Also, results of a bivariate correspondence analysis did not reveal any significant relationship between respondent roles and other response variables.