The quantitative and qualitative impact of gas and electricity sector market opening on employment

1
The quantitative and qualitative impact of gas
and electricity sector market opening on
employment

• February 12th 2007
• Professor Peter Lloyd and Anne-Mari Nevala

2
This presentation

• Changes and suggestions
• Key findings
• Key recommendations

3
Changes

• Update, clear up, more uniform country and case
  study reports
• Review of main conclusions, recommendations and
  restructuring chapter
• Content of the summary report for discussion

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Electricity sector employment 1995-2004
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Gas sector employment

• Decline between 2001 2004 in 20 study countries
  
• 12-13
• From 174,000 to 151,000 employees

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Effects of liberalisation on the quantity of
employment

• Direct effect on the number of jobs
• Increasing the pace of change in the sector
• One of the key factors to the decline BUT still
  only one factor among many

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Other factors

• Outsourcing
• 8-35 of the decline
• Technological developments
• Electricity sector in particular through CCGT
  stations
• Meter reading (decline up to five-fold)
• Commercialisation
• Privatisation
• Regime change

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Other factors

• Energy demand, economic growth
• Economic, labour and environmental policies
• Other energy directives
• Renewables

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Liberalised electricity markets, 95-04
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Non-liberalised electricity markets
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Gas sector employment

• UK as the only mature competitive market seen
  the greatest losses
• Current level of employment only 20 of
  pre-liberalisation level of 1986.
• Decline from the past decade in the region of
  40-50
• Liberalisation one of the key factors for the
  decline
• Other factors outsourcing, offshoring,
  introduction of dual energy providers

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Gas sector employment

• Liberalised markets
• Moderate decline in DE and AT
• In Italy the effect has been more dramatic
• No significant quantitive effect on employment
  SP, DK
• Non-liberalised markets
• No data or gas supply 6 MS
• The effect of privatisation
• Growth in employment

13
Employment losses

• Area of activity
• Distribution and production vs TSOs
• Trading
• Incumbents seen greatest losses
• Occupational groups
• Low skilled
• Maintenance personnel
• Lower skilled technicians and elementary
  functions
• Outsourced non-core functions (back-office,
  cleaning, construction, security)
• Customer service and administration

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Employment losses

• Male vs female staff
• Age groups affected by liberalisation
• Older workers
• Graduates (economics vs technical)

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New demand for employment

• Brokerage and trading
• Business development and marketing
• Project management
• Product development
• Legal personnel
• Consultancy
• Renewables

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Qualitative effects

• Effects on individuals who have lost their job
• Effects on remaining workers
• Effects on workers affected by outsourcing

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Impact on the quality of working life

• Increase in workload
• Flexibility vs security of employment
• Effect on job tenure
• Mixed views on the implications for
• HS
• Funding for training

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On the positive note

• New opportunities for personal development
• Performance of the workforce
• A more mixed and diverse workforce

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Key findings in relation to restructuring

• The use of early retirement
• Widespread outsourcing
• Promotion of internal mobility very difficult
  importance of incentives and re-training

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Key findings in relation to restructuring

• Social responsibility of companies in the face of
  restructuring
• Macro-economic situation of the country
  (tight/slack labour market)
• Profile and size of the company
• Characteristics and role of the gas and
  electricity industry in the region/country.
• Role and power of social partners, social
  dialogue

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Key findings in relation to restructuring

• Thorough consideration of alternatives to job
  losses
• Early retirement, recruitment freeze
• Involving SPs and employees on alternatives to
  improve productivity
• Atypical forms of employment
• Job sharing
• Flexible policies on sabbaticals, training breaks

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Key lessons for managing restructuring

• Planning early
• Benefits of looking after the welfare of workers
• Success of intermediate support structures
• Involvement of management and employees
• Importance of monitoring change