Municipal utilities and the shortage of skilled workers: About a decade of apparent standstill

In 2013, the German BBH Group, a consulting firm for municipal and medium-sized companies, identified the shortage of skilled workers as one of the biggest challenges facing municipal utilities. At the time, BBH reported that one-third of municipal utility employees would retire by 2023, while young professionals would be drawn to the private sector, and public companies would thus lose them.

Nine years later, in 2022, Rödl & Partner (a consulting firm) described the same problems as if nothing had changed since 2013. 46% of municipal utilities suffer from a shortage of skilled workers.

Considering that this problem was already known a decade ago and is even more pressing after nearly a decade, it seems time to raise stakeholder awareness by further discussing the issue. This article informs municipal utilities about the findings of the German municipal utility networks and possible steps to escape this impasse.

Why public utilities are essential players in the energy transition
In Germany, energy is distributed via the networks of municipal utilities. While smaller municipal utilities buy the legally defined energy mix mainly from producers via the European Energy Exchange in Leipzig (DE), the municipal utilities of larger cities only make the grid available for energy that comes directly from various producers.

Read next: How municipal utilities can drive the energy transition and what prevents them from realizing their full potential.

Why do German municipal utilities suffer from a shortage of (skilled) workers?

As mentioned earlier, many German municipal utilities do not have the knowledge or capacity to deal effectively with new sustainability requirements, possibly due to a lack of qualified employees. A variety of factors lead to these problems. Among them are:

- The aging workforce.

- The unattractiveness of the public sector compared to the private sector for entry-level workers.

- Diversified responsibilities due to the energy transition.


A survey by Rödl & Partner (2019) revealed that 83% of municipal utilities expect 10-25% of their employees to retire in the next 10 years. In some cases, they even expect 25-50% of their employees to leave. According to the magazine Energate, this is partly the result of increased competitive pressure due to increasing market liberalization: dwindling positions are not being filled with young professionals in order to reduce costs. Accordingly, the average age of the workforces in many German municipal utilities is steadily rising.

Public versus private companies. 

For many people entering the workforce, the public sector simply does not offer competitive career prospects. In addition to the limited prospects for their own professional development, the significantly better salary in the private sector is attractive to many. Professionals can expect a salary 5-15% higher in the private energy sector than in the public utility sector, and the difference becomes even more dramatic in higher positions.

Diversified responsibilities due to the energy transition. 

In addition, the energy transition toward more sustainable, green energy and heating solutions place new demands on knowledge and skills. Problematically, the issue has been ignored for too long by many municipal utilities and the political structures that could have responded to these trends. According to the Fraunhofer Institute, German municipal utilities often lack the dynamic skills needed to find solutions. Employees who can respond effectively to these new challenges are in short supply.

Change in responsibilities. 

Many energy efficiency improvements require digitization of the sector. The general trend toward smart cities that connect and supply citizens requires technicians and IT specialists to be up to date. These developments have diversified the tasks of municipal utilities in recent years, from maintaining a reliable energy network to providing sustainable, reliable, and demand-driven networks. These needs include the widespread desire for affordable green energy and the need for information on private photovoltaic investments, alternative heating solutions, and more. These needed solutions require other capabilities that have long been peripheral to municipal utilities and are currently underrepresented.

What can municipal utilities do to escape this impasse?

Change in employment structure. 

While more qualified employees will be needed in the future, many office jobs will become redundant due to advancing digitization and automation. Municipal utilities should adjust their employment structure accordingly. Therefore, HR managers need to recognize that managing their workforce is no longer enough; actively managing and adapting employment structures is crucial.

Increasing the internal attractiveness for trained young professionals. 

By offering flexible employment opportunities and hours, more competitive salaries, focusing on the health of their employees, and promoting desirable corporate values and environments, municipal utilities can make staying in the public sector more attractive to young professionals, says Rödl & Partner. By being close to their customers and able to manage the local energy transition, municipal utilities could adopt a sustainability-focused image that is desirable among professionals.

Improve public relations. 

In addition, Rödl & Partner emphasize the importance of strong external relationships through collaborations with partner universities, social media marketing to reach younger audiences, and improving public relations with other stakeholders and customers. Public utilities should offer internal study and qualification programs to give professionals the opportunity to develop their skills.

Take-Away and Outlook

With the energy transition, European municipal utilities are facing significant new challenges. However, knowledge networks are emerging to provide guidance and help municipal utilities identify them and find practical solutions.

QLab is one of these experts. Recently, we completed a consulting project with a German municipal utility: We will soon publish the results on the QLab website and LinkedIn. Follow us to see them first!

In the following articles, we go deeper into questions around the potential of municipal utilities. Share this article and subscribe to our publication to never miss the latest QLab Insights!

Finn Faust, Webdesign & Research at QLab Think Tank GmbH

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