National Grid

National Grid is responsible for the transmission and distribution of electricity and gas across
the UK, and also has holdings in the US. The company has significant need for qualified
engineers, but the sector is experiencing acute skills shortages, with one quarter of vacancies in
energy and utilities companies remaining unfilled during 2013, and engineering companies
facing an annual shortfall of 55,000 skilled workers. The bulk of the workforce at National Grid is
aged between 4055, so fostering a talent pipeline is critical.

To address this, the company runs several programmes, including work experience, open
houses, and free learning resources for teachers to encourage school children into the field. An
additional initiative is the Careers Lab, a scheme being rolled out across 600 schools in the UK
with four lesson plans delivered by employees and teachers for students aged between 11-16.

In 2007 when Mike Westcott, the current HR Director, was recruited, the company did not have
strong people management foundations; for example, there was no way of defining potential or
what leadership qualities were. The company has therefore invested heavily in using data for
workforce planning. This has helped it to understand what the future demand for talent looks
like, for example, by looking at talent supply and attrition and retirement rates across skill
groups to identify gaps. This then influences their recruitment, training, and development
programmes.=

Diversity is another area where the company has invested significant resources, along with the
employee value proposition (EVP). National Grid holds regular employee focus groups to
understand the EVP and what attracts and retains staff. The engineers love working on big
exciting projects and also place an emphasis on the company’s role in the community. To this
end, the company is heavily involved in community projects such as young offender
programmes and employee volunteering, and environmental issues such as reducing carbon
emissions. Another major current focus is on rolling out a performance excellence programme
to drive up performance. With the regulator Ofcom focusing not just on reliability and customer
service but also innovation, the company also has to consider how to incentivize new ideas.

Questions:

1. From a resource-based perspective, explain why National Grid’s engineers constitute a

‘resource’.
2. What is currently wrong with National Grid’s HR strategy (the way the firm is doing in
terms of HRM)? What should be done differently in terms of HR strategy (in areas such
as staffing, training, performance management, compensation policy)?
3. In terms of three types of rent described by Chadwick and Dabu (2009), what are the
rents that National Grid can obtain from its human resources?

Source:

Warren, C. (2015) ‘We Know What the Future Looks Like’, Work, Issue 4, pp. 32-5.