Study yDemographic change, age

t d t imanagement and competencies in the Gas Sector in Europein the Gas Sector in Europe

Presentation by David Tarren4 November 2009

Why examine demographic change and competencies ?

What will the sector look like in the future ?• What will the sector look like in the future ?– What will the age profile look like ?– What skills will we need ?– What skills will exist within the European labour market ?

• Young people entering the labour marketYoung people entering the labour market

• Succession planning

• Knowledge transfer between generations

• Sector will be better placed to deal with change

What is the problem ?What is the problem ? • Lower fertility rates and mortality rates plus better• Lower fertility rates and mortality rates, plus better

healthcare mean that the average age of European citizens is increasingcitizens is increasing

the problem..... the problem......• In next 40 years the average age of European

citizens will rise by 10 years – to 48

• Proportion of people living to over 60 in Europe grows by 2 million a year (for next 25 years)

• Population of EU27 to remain stable, although population of NMS will decrease by 7.5 million

the problem..... the problem .....

2009 35 people aged 65+ per 100 economically active2009 35 people aged 65+ per 100 economically active

2050 75 people aged 65+ per 100 economically active

Reasons for social partners to tackle the problem

• Important to ensure:– Need adequate supply of workers !– Need adequate supply of workers !– Continual movement between young people and the

transfer of knowledge at the other endg– Ensures constant flow of adequately trained workers – Continual development improves adaptability– Lack of succession planning costs money– High retention rates save money

ContextContext• European Commission

– “The demographic future of Europe”, Green Paper “Confronting demographic change”; “Demographics - Facts and Figures”

– Promoting demographic renewal in EuropeP ti b tt j b d l li f b tt lit– Promoting better jobs and longer lives of better quality

– Lisbon Agenda– European Employment Strategy

Age discrimination measures– Age discrimination measures

• Promoting competency development – New Skills New Jobs initiative– New Skills, New Jobs initiative – Moves towards jobs requiring higher skills (knowledge economies)– Occupational shifts within sectors – more managers and skilled jobs– Concept of lifelong learningConcept of lifelong learning

3 key stages of demographic change – E.C

Stage 1 Things continue as they are

Stage 2 Increasing participation = labour shortages

Stage 3 Number of adults within labour market contracts

Skills and competencies across European Union

• Shift across all sectors towards jobs which will require higher skillsrequire higher skills

• Decline in demand for workers with low skillsO ti l hift ithi t i i• Occupational shifts within sectors – requiring more managers, and relatively higher educated workersG l i i th d ti l l l f th• General increase in the educational levels of those performing particular jobs – towards individuals with tertiary qualificationstertiary qualifications

The European Gas SectorThe European Gas Sector• Employs almost 250,000 people

– From 100 employees in Ireland and over 50,000 in UK• Servicing over 111 million customers

Bi 5 G UK R i P l d It l (81%)• Big 5 - Germany , UK, Romania, Poland, Italy (81%)• Gas is 2nd largest source of EU27 energy after oil• Usage ranges from 10% in Finland to 43% in Netherlands• Usage ranges from 10% in Finland to 43% in Netherlands• Productivity 2 ½ times EU average• Liberalisation – not uniformbe a sa o o u o• 86% of gas used by customers free to choose supplier• EU accounts for 19% global gas consumption• Increase in energy consumption by 2030 met by

renewables and gas

Gas Sector WorkforceGeneral

Ecotec st d• Ecotec study

– Ageing workforceAgeing workforce– Women under represented (<20%)– Semi skilled, technical and middle management– Expectations of a ‘job for life’

• States experiencing liberalisation witnessed mostStates experiencing liberalisation witnessed most job losses

Gas Sector WorkforceOccupations

Gas Sector Workforce Age groups and occupations

Education and TrainingEducation and Training

• Engagement in CVT higher than average– 57% in EGW compared with 33% across EU27– BUT older workers less likely to receive training than

younger

• Costs of training higher than average = 2 ½ more

• Training not distributed across occupational tspectrum

Gas Sector WorkforceSkill levels

Job ForecastingJob Forecasting• Before 2015 Net gain of between 13 and 19 million

jobsjobs• Loss of 2 million jobs within Primary sector• Long term growth in demand for higher skillsLong term growth in demand for higher skills• Skills gaps and shortages already exist – market

cannot deliver• However 2009 to 2015 growth in high level AND

elementary• Of 9 main occupational categories demand for 5• Of 9 main occupational categories, demand for 5

will increase, while 4 decline• Continuation of current shift from blue collar toContinuation of current shift from blue collar to

white collar• Competition from other utility sectors + nuclear

Job ForecastingDemand

The Role of the Social PartnersThe Role of the Social Partners

• Employers and employees need to rethink traditional approach pp

• Redesign careers (leaving school to retirement)retirement)

• Little evidence of CB over this issue• E.C Report (page 25 of Study)

EU Gas Sector of the Future (1)EU Gas Sector of the Future (1)Gro th in po er generation to 2030• Growth in power generation to 2030

• At expense of residential and commercial• Liberalisation tends to impact on older low skilled• Liberalisation tends to impact on older, low skilled

males working in distribution sector

EU Gas Sector of the Future (2)EU Gas Sector of the Future (2)

EU Gas Sector of the Future (3)EU Gas Sector of the Future (3)

Conclusions (1)Conclusions (1)• European labour market will contract after 2020• European labour market will contract after 2020• Employers will compete for workers

Migration ill not sol e the problem• Migration will not solve the problem• Employers need a range of solutions• Need to improve recruitment ‘offer’ & appeal to

younger workers as a ‘career of choice’• Developing existing low skilled important• Personal development and lifelong learning crucial

as movement to higher skills for existing workforce

Conclusions (2)Conclusions (2)• Older workers receive less training than younger

workers• Liberalisation affects low skilled males in distribution• Power generation large area of growth • Movement within occupations essential• Social dialogue crucial to bring employees on boardg g p y

Good NewsGood News

EPSU, EMCEF and Eurogas have identified this as a major problem and are j p

committed to solve it jointly !

QUESTIONS ?