The Utility Retirement Wave Is Here. Is Your Workforce Ready?

Key Takeaway

Nearly 1 in 6 cooperative employees will be eligible for retirement within the next five years, creating significant workforce challenges for utilities. However, the biggest risk goes beyond filling open positions. As experienced employees leave, utilities may lose valuable institutional knowledge, operational expertise, and leadership experience that’s been developed over decades. Organizations taking a proactive approach to workforce development will be better positioned to maintain safe, reliable operations and ensure a smooth transition to the next generation of workers. Effective succession planning starts long before a retirement notice is submitted, giving utilities time to prepare employees for critical roles before vacancies occur.

The retirement wave is coming

The utility industry is facing a workforce transition unlike anything it has experienced in decades.

According to NRECA, 16.6% of cooperative employees, nearly one in six workers, will be eligible for retirement within the next five years. At the same time, utilities are managing growing operational complexity, grid modernization initiatives, distributed energy resources, regulatory pressures, and increasing customer expectations.

For many organizations, the challenge isn't simply replacing employees. It's ensuring the knowledge and experience accumulated over decades doesn't walk out the door with them.

The utilities that will be most successful over the next decade aren't waiting for retirements to happen. They're building workforce readiness strategies today.

The real risk isn't headcount. It's knowledge loss.

When experienced employees retire, they take more than a position with them.

“Retiring employees are taking years of operational insight, historical context, and lessons learned that often aren't documented anywhere,” said Linda Perez, Senior Advisory Services Manager at HSI. “Organizations need a deliberate strategy to capture and transfer that knowledge before it's gone."

This knowledge can include:

• Operational best practices
• Historical lessons learned
• Informal work processes
• Relationships with stakeholders and vendors
• Leadership and decision-making experience

Replacing people is difficult.

Replacing decades of experience is even harder.

As utilities continue to face labor shortages, workforce turnover, and increasing competition for skilled talent, preserving institutional knowledge has become a business-critical priority.

Why utilities need to act now

The most prepared utilities are treating workforce transitions as a business continuity issue, not simply an HR initiative.

A proactive workforce strategy includes:

Workforce assessments

Understanding which critical positions are most vulnerable to retirement allows organizations to prioritize development efforts and prepare future successors before vacancies occur.

Skills gap analysis

The skills required in today's utility environment continue to evolve. Organizations must identify current and future competency gaps to ensure employees are prepared for emerging technologies, operational demands, and leadership responsibilities.

Knowledge transfer programs

Formal knowledge transfer programs help preserve expertise before employees leave. Leading utilities document procedures, build knowledge repositories, establish mentoring programs, and create structured onboarding paths.

Leadership development

Many organizations are discovering they aren't developing future leaders quickly enough to replace retiring supervisors, managers, and executives. Structured leadership development programs can help prepare the next generation of leaders before they're needed.

Succession planning

Succession planning is more than just identifying a replacement for key positions. It is a strategic approach to developing employees for future roles and building a pipeline of capable talent ready to step into critical positions when needed.

Five Questions Utility Leaders Should Ask

As retirement eligibility accelerates, utility leaders need to evaluate whether their organization is truly prepared for workforce transition.

1. Do we know which critical roles are most at risk?

Identify positions where retirement, turnover, or skill shortages could significantly impact operations. Understanding workforce risk is the first step toward building an effective succession strategy.

2. Have we identified future skills gaps?

Utilities face growing demand for technical, digital, operational, and leadership skills. Future workforce planning requires a clear understanding of which competencies will be needed in the years ahead.

3. How are we capturing institutional knowledge?

If critical knowledge exists only within experienced employees, the organization is vulnerable. Knowledge capture should include documented procedures, mentoring programs, job task analyses, and structured transfer processes.

4. Who is being prepared for future leadership roles?

Future leadership pipelines don't happen by accident. Organizations should identify high-potential employees early and provide development opportunities that prepare them for increasing levels of responsibility.

5. Are employees following structured development paths?

Employees are more likely to stay engaged and prepared for advancement when they can see a clear path for growth. Structured learning paths, mentorship opportunities, cross-functional exposure, and ongoing assessments help employees build the skills needed for future roles.

Building a workforce ready for the future

Leading utilities recognize that succession planning begins long before employees move into leadership positions.

Workforce readiness starts with developing employees at every stage of their careers:

• Entry-level employees need strong foundations in communication, problem-solving, and technical skills
• Middle managers need development in decision-making, strategic thinking, and people leadership
• Executives need the ability to set a clear vision, build strong relationships, and lead their organizations through change.
• Organizations that take a structured approach to employee development are better prepared to maintain continuity, reduce risk, and strengthen organizational resilience.

The retirement wave has already started

"The retirement wave isn't a future event anymore. It's already happening,” Perez said. “Organizations that invest now in workforce development, succession planning, and knowledge transfer will be in a much stronger position than those waiting until critical positions become vacant."

Organizations that wait for retirement notices to arrive may find themselves scrambling to replace critical expertise after it's already gone. Those who act today by investing in knowledge transfer, workforce development, leadership readiness, and succession planning will be better positioned to maintain reliability, strengthen operational performance, and prepare the next generation of utility professionals.

The question isn't whether retirements are coming. The question is whether your workforce is ready for what comes next.

How HSI helps utilities prepare

HSI helps utilities proactively prepare for workforce transitions through solutions designed to strengthen workforce readiness and preserve critical expertise. Check out these resources to learn more:

Knowledge Transfer White Paper
Learn strategies for preserving critical expertise before it leaves your organization.

Labor Shortages and Skills Gaps White Paper
Explore practical approaches for addressing workforce shortages, developing talent, and closing critical skills gaps.