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Kevin GaitskellGeneral Manager ESP
The Perfect Storm
Focus
• Who are we?• In what context do we operate?• What challenges do we face?• What is our response?
…..and therefore why are we in a perfect storm?
Who are we?
• One of the worlds largest isolated power systems
• Australia’s largest combined Transmission and Distribution business
• Government Trading Enterprise (GTE)
• Operating in an immature regulated environment (2006)
…. operating from the worlds most isolated capital city
Who are we?
• Network• South West Interconnected System (SWIS)• 95,000km power lines• 787,000 power poles and towers• 224,000 street lights• 13,500 substations• 22,000 new connections
• People• 3000 employees• 500 embedded contractors• 1000+ Fee for Service contractors
With challenges associated to an aging infrastructure.
In what context do we operate?
-6
-4
-2
0
2
4
6
2007 2008 2009 2010 2011 2012 2013
Western Australia
Australia
United Kingdon0
GD
P %
Ch
ang
e (y
oy)
In what context do we operate?
forecast
AA1 AA2 AA3
Total Expenditure
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Aus
$ m
illio
ns (
real
201
1/2
012
)
actuals Trendforecast
What challenges do we face?
• Labour market
• Organisation
• Shareholder value
Labour market #1
Real skills crisis is still to comeEmployers warn
that Australia is
in the grip of
skills crisis
We are running
out of skilled
workersWA Businesses
hit hard by
skills
shortage
Chronic skills shortage hits workforce
Labour market #2
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
2012 2014 2017 2020
Labour gap
Labour stock
20,0
00
80,0
00 150,
000 21
0,00
0
Organisation #1
• An aging workforce:
• 10% of line workers expected to retire in 2011/12
• Current turn over 9.5%
• 14.5% leave within 2yrs
…why are they leaving?
0%
2%
4%
6%
8%
10%
12%
14%
16%
Apr-09
May
-09
Jun-0
9
Jul-0
9
Aug-09
Sep-0
9
Oct-0
9
Nov-09
Dec-0
9
Jan-1
0
Feb-1
0
Mar
-10
Apr-10
May
-10
Jun-1
0
Jul-1
0
Aug-10
Sep-1
0
Oct-1
0
Nov-10
Dec-1
0
Jan-1
1
Feb-1
1
Mar
-11
An
nu
ali
sed
Per
ce
nta
ge
of
Tu
rno
ver
Annual Turnover Annual Turnover Within 2Yr Tenure
Organisation #2
• Career development opportunities
• Remuneration
• Dissatisfaction with roles
• Organisational culture
Shareholder
Why is this the “Perfect Storm”
What is our response?
Culture
Capability
Capacity
ChangeProgram
What is our response?
WP Current Operating Culture
2009
WP Target OCI 2013
Industry (Gas/Electric) OCI Actual
2010
What is our response?
• Our value proposition
• Retention
• Recruitment
Come to WA
A final word
Questions