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Sector Information

This section presents labour market information on the energy and utilities sector as defined by Energy & Utility Skills, Sector Skills Council, which includes:

  • Power
  • Gas (upstream and downstream)
  • Waste management
  • Water

In addition, there is:


Employment in the energy and utilities sector

There are an estimated 530,700 employees in the energy and utilities workforce.

The size of the workforce has decreased by around one-quarter over the last 20 years, mainly due to downsizing following the privatisation and deregulation of many aspects of the power, gas and water industries. The majority of job losses have been in secretarial, skilled technical and the low-skilled occupations. However, within the water industry there have also been reductions in the number of science professionals and associate professionals.

These statistics relate to the core companies in the sector, part of these reductions relate to activities being out-sourced to third-party contractors.

Waste management has seen significant increases in employment, albeit from a relatively low base. For example, employment in recycling activities increased three-fold over the last decade. This was mainly due to the increased political and environmental pressures being exerted on the industry in terms of diverting waste away from landfill and towards a more sustainable manner of waste treatment.

Source: Energy & Utility Skills Sector Skills Agreement 2006 and Energy & Utility Skills LMI report March 2010

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Energy and utilities organisations

83% of the sector’s organisations are located in England, 9% in Scotland, 5% in Wales and 3% in Northern Ireland.

Across the power, gas (upstream), waste management and water industries there are around 10,000 VAT-registered businesses, the majority of which are small and medium-sized organisations. In the gas (downstream) industry, there are approximately 50,000 CORGI-registered businesses, the vast majority of which are sole traders and very small businesses.

85% of energy and utilities business units across the UK employ less than 10 people, while less than 0.5% of organisations employ 250 or more people. Across the power, gas (upstream), waste management and water industries, micro-sized businesses dominate in terms of the business stock, but employ relatively few people. The vast majority of the workforce is employed in the small number of large businesses.

Source: Energy & Utility Skills Sector Skills Agreement 2006

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Economic profile

In terms of output per employee, the power, gas and water industries are five times more productive than the UK economic average. This is in part the result of these industries being very capital intensive and employing relatively few employees.

The productivity of the waste management sector is more difficult to define but appears to be about equal to that of the UK as a whole. The dispersed nature of waste management operations (collecting, transporting and processing waste) means that is unlikely that it will ever approach the productivity levels of the power, gas and water industries.

Source: Energy & Utility Skills Sector Skills Agreement 2006

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Recruitment

23.8% of energy and utilities organisations had recruited under 25 year olds direct from school, college or university in 2005, which is the same proportion as the average across all sectors.

Power employers are most likely to have recruited those aged under 25 (42%), compared to only 11% in the gas industry.

Skills gaps amongst young recruits include:

  • Poor attitude (52.8%)
  • A lack of life experience (27%).
  • Inadequate social/people skills (26.1%)

For university leavers, skills gaps identified, include: written communication skills (53.7%) and common sense (20.4%).

Employers also commented on the lack of commercial awareness amongst graduates entering employment. It was felt that many university leavers have an inaccurate picture of the industry and are likely to have completed qualifications that are not relevant to their required activities in the workplace.

Source: Energy & Utility Skills Sector Skills Agreement 2006

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Occupational hard-to-fill vacancies

  • 15% of employers in the sector report vacancies, compared to 18% in all sectors
  • 3% report hard-to-fill vacancies, compared to 7% in all sectors
  • 3% report skill shortage vacancies, compared to 5% in all sectors

In 2004 and 2005 the waste management industry had the lowest proportion of organisations reporting a vacancy. The power industry was the only industry to show an increase in the proportion of organisations reporting a vacancy between the two years.

The four main causes of recruitment difficulties were identified as:

  • Shortages of appropriately skilled/ qualified people in the marketplace (89% of employers indicated this)
  • Competition for skills from other employers (78%)
  • The poor image of engineering industries (78%)
  • Low number of applicants (67%)

Other reasons included:

  • Encouragement given to young people to stay on in education rather than opting for vocational, work-based training (33%)
  • Inadequate careers advice (33%)
  • Inadequate terms and conditions of employment (e.g. low pay, unsociable hours, unattractive location) (22%)

Source: Energy & Utility Skills Sector Skills Agreement 2006 and National Employer Skills Survey 2008

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Skills shortages and gaps

  • 16% of establishments report skills gaps, compared to 15% in all sectors
  • the proportion of staff described as lacking proficiency is 5%

Skills gaps are highest for operatives, administrative, skilled trades and managers. Gaps are reported to be for technical and practical skills, team working, customer-handling and problem-solving.

Source: National Employer Skills Survey 2008

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Future skills demands

In the gas industry job specific skills are forecast to become the most important in the future followed by flexibility, problem solving and showing initiative. Customer care skills are also forecast to increase in importance in the future.

In the power industry there is an increasing need for employees to be multi-skilled as companies strive to make cost savings and develop greater flexibility in the service they offer. The demand for leadership, team working, interpersonal and IT skills are all forecast to continue to increase.

Future skills demand in the water industry will particularly be around employees who can offer skills in the areas of: design engineering; contracting; customer relations; IT; and software systems management.

The waste industry identifies its future skills priorities as: improved leadership and management skills, including at supervisory level; technical skills in areas such as waste handling and processing and energy saving techniques; communication skills; and improved IT skills, particularly at operator level.

Source: Energy & Utility Skills Skills Intelligence for Waste 2006, Energy & Utility Skills Skills Intelligence for Water 2004, Energy & Utility Skills Skills Intelligence for Power 2004 and Energy & Utility Skills Labour Market Investigation of the Gas Industry 2000

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Future employment in the sector

Whilst employment for the UK as a whole is projected to grow by some 3.5% between 2004-2014, employment in the energy and utilities sector is forecast to fall by 5% over the same period. Both male and especially female employment prospects are expected to decline in the energy and utilities sector.

This rate of decline is most pronounced in the short-term until 2010; thereafter the rate of decline slows. Significant job losses in the energy and utilities female workforce seems to already have occurred in the period 2002-2006 and this downward trend is set to continue. It is believed the decline is due to improvements in business processes which have resulted in a decline of stereotypical females roles such as administration and secretarial.

Despite the overall reduction of 5% in employment between 2004-2014 in the energy and utilities sector, the need to replace existing workers who either retire or leave the sector means there will be a need for 150,000 new recruits over the period. Replacement demand will be greatest for skilled trades occupations, where there is a forecast need of 45,000 workers, followed by managers where 20,000 new recruits will be needed.

Power

Around 2,000 new workers per year will be required by the power industry between 2008 and 2017 and 34% of these will be graduates. The occupations where demand for new recruits will be largest include:

  • Unit Operator/Controller
  • Cable Jointers
  • Electrical Fitters
  • Overhead Linesperson
  • Resource Team Leaders
  • Project Manager/Engineer
  • Meter Fixers

Gas (downstream)

Around 600 new workers per year will be required by the gas (downstream) industry between 2008 and 2017 and 18% of these will be graduates. The occupations where demand for new recruits will be largest include:

  • Emergency – First Call Operatives
  • Repair Team Leaders
  • Operations First Line Managers
  • Maintenance Craftpersons

Waste management

Around 9,000 new workers per year will be required by the waste management industry between 2008 and 2017 and 16% of these will be graduates.

The main source of this demand for new workers is the recycling industry. With landfill coming to an end, and significant advances being made in alternative waste disposal methods (e.g. recycling, incineration, energy from waste, etc.), new workers will be needed to design, operate and maintain these facilities. Although many of the new jobs will not require graduate-level skills, there will be strong demand for people with science and environmental skills and knowledge. The occupations where demand for new recruits will be largest include:

  • Kerb-side Collector
  • Sorter, Picker, Refurbisher
  • Refuse/ Recycling Collection Drivers
  • Environmental Technicians
  • Mechanical/ Instrumentation/ Electrical Engineers

Water

Around 3,000 new workers per year will be required by the water industry between 2008 and 2017 and 31% of these will be graduates. The occupations where demand for new recruits will be largest include:

  • Network Construction Operatives
  • Network/ Process Technician
  • Mechanical/ Electrical Technicians
  • Leakage Technician
  • Incorporated and Chartered Engineers

Source: Energy & Utility Skills Sector Skills Agreement 2006 and Energy & Utility Skills LMI report March 2010

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Future drivers and changes in the sector

The energy and utilities sector is going through a period of increased investment to replace ageing assets and increase the security of the supply systems.

The key drivers of business change within the power industry can be summarised as: regulation; restructuring (including multi-utilities); intensified competition; increased customer service; technological developments; and reliability and security of supply.

Within the gas (upstream) sub-sector, the key drivers are: regulation; restructuring; security of supply; technological developments; and infrastructure renewal.

The gas (downstream) sub-sector operates within the context of continued CORGI/ACS accreditation, technological developments and fuel efficiency.

The key drivers of change within the waste management industry are: government policies and targets; national and regional responsibilities; health, safety and welfare practices; and new working practices through the introduction of new technologies.

While the key drivers of change within the water industry are: regulation; legal instruments; fragmentation of the supply chain; capital investment and technology; river management; flood and coastal defence; and reliability of supply.

Source: Energy & Utility Skills Sector Skills Agreement 2006

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