The Next Generation: Succession Planning and Talent Management in a Changing World

1. The Next Generation: Succession Planning and Talent Management in a Changing World Presented by Geoff Isbell, Chief Operating Officer

2. Passing the Torch - Olympic Tradition

3. Passing the Torch… • The greatest resource we have • is the wealth of knowledge • and experience that we can • pass to the next generation… • We need to pass the torch, • now more than ever… • It should be considered an honor to carry the flame for Natural Gas!

4. NextGen Overview • Take Away: • Something to think about… • Challenges we face • Actions we must take • Principles we must embrace • How will you pass the torch?

5. ENERGY worldnet’s Involvement Recruitment, Talent Management and Succession Planning: Three Necessary Steps Awareness Assessment Action * The Sloan Center on Aging & Work

6. The Challenges We Face Primary Challenges Aging Infrastructure Aging Workforce Limited talent/resources Increased Regulation

7. Aging Infrastructure = More Work • 60% of utility assets are near the end of their useful service life* • 20 -25% of utility assets are past their intended service life* • * CRA International report dated February 2009 • Chart from DOT/PHMSA Report on Pipeline Safety

8. Aging Infrastructure = More Work • CERA estimates that the electric power industry alone will invest approximately $900 Billion for infrastructure projects over the next 15 years.* (Natural Gas will need more pipelines and facilities to meet the demand for electrical power generation) • Outlays of $10 to $20 billion per year could be required over the next 20 years to build new systems and facilities and modify existing ones to bring U.S. oil and natural gas resources to market.** • *CERA – Cambridge Energy Research Associates • **Curt Launer, Managing Director of Natural Resources/Deutsche Bank

9. Aging Workforce = Fewer Workers Center for Energy Workforce Development (CEWD), 2011 Survey

10. Aging Workforce = Fewer Workers • Average age of utility workers is currently 46.1 years old (1) • 40 percent of the workforce will most likely be retiring in the next 5 years (2) • Worker shortages predicted to occur sooner in energy/utility sector than other industry sectors (3) • (1) Center for Energy Workforce Development • (2) Chavez, The Case for Succession Planning, 2011 • (3) U.S. Department of Labor comparison

11. Aging Workforce = Fewer Workers • As 75 million baby boomers approach retirement age, a significant portion of the existing workforce will be leaving. • Beginning in 2005, around 8,000 baby boomers per day are turning 60. Since 2010, half the U.S. population is now over 50 years old. • National Center for Construction Education and Research

12. Aging Workforce = Fewer Workers Talent Management Study • 40% of employers surveyed anticipate the aging of the workforce will have a negative or very negative impact on their business over the next 3 years. • ** The Sloan Center on Aging & Work

13. Aging Workforce = More Training Talent Management Study • 77% of employers stated that they have not analyzed the projected retirement rates of their employees, either “not at all” or “to a limited extent”. • * The Sloan Center on Aging & Work

14. Aging Workforce = More Training Talent Management Study • Two-Thirds (68%) of employers surveyed reported not having analyzed the demographics of their workforce, either “not at all” or only “to a limited extent”. • * The Sloan Center on Aging & Working

15. Limited Skilled Talent/Resources Talent Management Study • Approximately one-third of employers surveyed reported NOT having enough programs for the recruitment (30%) and training (35%) of workers. • * The Sloan Center on Aging & Work

16. Limited Skilled Talent/Resources Taking Action Records from the Dept. of Labor’s Bureau of Labor Statistics (BLS) show that less than 10% of the 7 million workers in our industry participate in a formal internship program. * U.S. Department of Labor, BLS

17. Limited Skilled Talent/Resources Taking Action • The battle to attract our future workforce is with other industries that are all competing to attract the same pool of talent. • 50% - attend college • 25% - earn degree • 75% - looking for employment that doesn’t require a degree. • * National Center for Construction Education and Research

18. Limited Skilled Talent/Resources Taking Action • We are not attracting enough of the right workers to our industry. • It’s essential to our future that we reach out to our young people and expand career-training opportunities to them. • Career and technical education students can benefit greatly from the opportunities our industry has to offer. • * National Center for Construction Education and Research

19. Actions We Must Take

20. Actions: Best Practices • Creating a Business Case • Assess current environment • Use Succession Planning Templates • Developing a Comprehensive Plan • Assessment Centers • Talent Pools • Matching Talent with Roles • Knowledge Capture & Transfer • Policy and Procedures • Training/Apprentice Programs • Mentoring

21. Actions/Examples: Protocols

22. Actions We Must Take • Proactive Examples • High School Recruitment & Apprenticeships • College Recruitment & Internship Programs • Gas Operations Schools and Assessment Centers • Partnerships with Technical and Community Colleges • Rehiring Retired Employees as Trainers & Evaluators

23. Assessment Center: A Case Study • An argument for recruitment and screening: • Puget Sound Energy (PSE) • (from article in Western Energy Magazine –Spring 2012) • From 2008 to 2011, PSE recruited for five apprenticeship programs that focused on critical skills and functions at PSE • PSE received 3,674 applications • 1,241 met basic qualification requirements (33% of applicants) • Only 500 passed required apprentice aptitude tests (<14% of applicants)

24. Apprenticeship: A Case Study • ALAGASCO – Alabama Gas Corp. Birmingham, AL • Phase I • 6 month Construction Crewman program • Pre-employment Test (Hogan Personality-Auburn Univ.) • Trades Experience & Mechanical Aptitude • Structured Interview Process/Panel • Skill Assessments every 30 days • Phase II • 24 month formal Apprentice Program (Journeyman/Master) • Pre-Meter Construction & Service/Post-Meter • Trades Experience & Mechanical Aptitude • Structured Interview Process/Panel • Skill Assessments every 30 days/90 days

25. Gas/Tech Schools: A Case Study Missouri Gas Energy (MGE) partners with Metropolitan Community College: Gas Utility Technician • Provided all necessary training • Short program: Only 4 weeks • Reasonable Cost • Job placement opportunities • Good pay opportunities • NOT ENOUGH PARTICIPANTS!

26. Partnerships: A Case Study Pacific Gas & Electric (PG&E): PowerPathway™ • Recognized by… • National Commission on Energy Policy as a best practice program • Clean Edge Clean Tech Job Trends as an organization to watch • White House/Skills for America’s Future initiative: PG&E's PowerPathway™ program is a distinguished leader in workforce development. Public Reference: www.pge.com/about/careers/powerpathway/about/

27. Mentoring: A Case Study

28. Passing the Baton… The success or failure of the team is entirely dependent on the exchange Mentoring – Learn the job of the man ahead of you and teach your job to the man behind you. Military – The one who gives the order leads the charge!

29. Principles we must Embrace Learning Organization Systems Thinking Personal Mastery Mental Models Building Shared Vision Team Learning * Peter Senge, The Fifth Discipline (1990)

30. Four Barriers to Change Compelling case for change Time to change Help during the change process Removing new/unknown barriers * Peter Senge, The Fifth Discipline (1990)

31. Legacy of Leadership A word of encouragement… “I was doing my job,” Mitchell said. “But probably at 201 meters, I heard it and I felt it.” “Faith, focus, finish. Faith, focus, finish.” “That’s the only thing I could say to myself.”

32. Thank You. • Questions & Comments • Contact Info: • Geoff Isbell • Chief Operating Officer • ENERGY worldnet, Inc. • Email: geoff.isbell@energyworldnet.com • Cell/Text: 940-399-9653 • Office: 940-626-1941 • www.energyworldnet.com