Comment: Talent exodus could be water industry’s biggest woe

It’s not been the best few years for the water industry, and many readers will have seen the headlines from rising bills and bonus payments, to sewage, pollution and hygiene problems. However, to those inside the sector, these aren’t the key problems. In fact, according to the engineers operating at the coal face and at ground level, the major overarching issue facing UK water is related to skills, and it’s only going to get worse unless action is taken.

This year’s Water Industry Labour Report revealed that a whopping 46 per cent of engineers felt skills and recruitment was the single largest issue facing the industry, representing year-on-year growth of 23 per cent. This lack of available skilled engineers is one of the contributing factors as to why the UK hasn’t built a reservoir since 1992. However, since then, the population has grown by approximately 13 million people, putting a real strain on ageing, often Victorian-era, infrastructure. To have a chance of modernising facilities, plants, pipelines and more, we need people, in volume. Without them, projects won’t be delivered and specialists have already outlined how shortages are biting.

Engineering exodus

However, the fact that ‘skills and recruitment’ was listed ahead of the other well-known issues was perhaps not the most striking statistic. That prize goes to the data highlighting that a startling 66 per cent of the existing water engineering workforce are considering taking on roles in other markets within the next year, which should send shockwaves to employers across the industry at such a critical time, with AMP8 now underway. The drivers behind this are multifaceted; the external scrutiny and pressure many engineers face certainly doesn’t help. Equally, nearly half say they lack access to the training and innovation opportunities required to progress their skills and keep them engaged. In other words, while pipes and pumps are rusting, so too are career pipelines for those who maintain them.

The data also revealed another worrying threat to productivity and delivery, namely the looming retirement cliff, with around a quarter (23 per cent) of engineers planning to retire within the next five years. Combined, these factors present a perfect storm that threatens to pour even greater pressure onto an already beleaguered industry.

This situation begs the question: with water recognised as one of a handful of truly critical industries, why is the engineer shortfall not making the headlines? In its place is the ongoing saga around Thames Water and potential nationalisation. While the public might prefer to see the industry’s largest employer fall into national ownership, with 82 per cent of people preferring this option, it could mean funds and attention are diverted away from potential investment in skills into simply keeping the taps running. Without falling into a political discussion, nationalisation wouldn’t benefit the industry or the country.

Reset not rethink

While the minutiae of the Thames ownership situation is being debated, it’s becoming increasingly clear that what the industry needs is a reset, rather than a rethink. The recently published report by Sir Jon Cunliffe’s Independent Water Commission only reinforced this, finding that the problems in England and Wales’s water industry are “deep-rooted, systemic” and span every level of the system. Crucially, the report concludes there is “no simple, single change, no matter how radical, that will deliver the fundamental reset that is needed for the water sector”.

However, that reset will take time, which the industry doesn’t have the luxury of. But what can be done before the engineering crisis has a particularly significant impact?

Firstly, employers must focus on leveraging the skills of experienced engineers more effectively, and extracting their full value before a generation of experts leaves the market entirely. Equally, they should look to leverage the contract and contingent market. Water is behind the curve here in reacting to changing employment preferences, and has traditionally fallen back on outdated permanent, in-house models, which do not meet the natural peaks and troughs brought on by major capital programmes like AMP8, which demand a more flexible and expedited approach.

A united front

If everyone adopted a more holistic and collective model to talent management, the skills shortages wouldn’t be as big a factor. Contingent hiring, delivered effectively, would enable the sector to bring in experienced talent for specific projects or surge periods, without overextending itself, and appeals to many engineers who we know prefer a more flexible approach. By reforming these outdated hiring practices, the industry can expand its talent pool and ensure it has the required resources.

In the longer term, a more radical approach is needed, and serious conversations must be had across the industry, and with the government and other stakeholder groups, to tackle engineering shortages. This isn’t a new issue, or one solely limited to water, but it’s perhaps being felt most acutely within this market, and due to the critical role played by the industry, could have the most profound and dramatic effects if not tackled soon. Regardless of the approach, whatever comes next must be nothing short of a fundamental reset of how the water sector is owned, financed, and regulated, and must incorporate strategies to rebuild and sustain workforce capability, before it’s too late.

Adam Cave is Managing Director and Founder at Murray McIntosh