By
Earl Shockley
By Earl Shockley, President and CEO, INPOWERD LLC
Trust • Accountability • Service
Technical Context
Aging workforce and operational knowledge loss is an increasingly material reliability risk for registered entities. Unlike emerging technology risks or new NERC Reliability Standards, this exposure develops gradually and often without immediate operational or compliance indicators. I recently had a college professor tell me; “for every five-boomer age electrical engineers who retire, there are only two to three in the pipeline”. This statement made me analyze my experience as a former regulator and current CEO who coaches executives in the energy sector.
In my four plus decades in this industry, it is clear to me that we must consider other engineering disciplines (e.g., mechanical, chemical) when filling operational roles, but this risk does not originate from retirement alone. It arises when the loss of experience is not systematically offset through intentional knowledge transfer, decision making development, and internal capability planning and preservation. When unmanaged, this condition degrades operational resilience and increases the likelihood that abnormal conditions escalate into high severity events.
Leadership Implication: From a technical and regulatory standpoint, succession management is not a workforce planning issue. It is an operational risk management issue with direct implications for compliance and operational defensibility.
Industry Trends Driving Increased Exposure
Several converging trends are increasing operational and regulatory risk.
First, the retirement of highly experienced operators, planners, protection engineers, cybersecurity professionals, and compliance supervisors is accelerating. These individuals hold system-specific knowledge accumulated over decades. That knowledge includes historical system behavior, event driven pattern recognition, and contextual understanding of why operating guides, protection schemes, and workarounds exist.
Second, many organizations are accelerating onboarding and qualification, placing less experienced personnel into critical roles faster than ever before. Often roles are filled with individuals with no prior experience. Classroom instruction, simulations (when available), and procedural training are being relied upon to replace exposure to real world abnormal conditions. While necessary, these methods do not replicate the situational judgment developed through years of operational decision making under stress.
Third, many entities are becoming structurally dependent on contractors and consultants to offset internal capability gaps, to the point they have no one qualified to oversee the work being done by the third-party. When critical operational knowledge only resides externally, internal ownership, continuity, and accountability weaken even though regulatory responsibility remains with the registered entity.
Risk implication: Individually, these trends may appear manageable. Collectively, they create compounding risks.
Operational Risk Implications
The loss of experience and institutional knowledge affects multiple aspects of operational performance. Single points of failure can quickly throw us into crisis management.
Institutional knowledge loss reintroduces previously understood and managed risks. Historical lessons fade. The rationale behind protection settings is forgotten. Operating guidance loses meaning because the underlying context is no longer widely understood. Compliance documentation may remain intact while operational robustness erodes.
Human performance errors increase as cognitive load rises, and situational familiarity decreases. Less experienced personnel may rely heavily on procedures during conditions that require judgment, prioritization, and adaptation. Most significant events are not caused by a single error. They result from a series of small decisions made under time pressure and uncertainty.
Event severity increases even when event frequency does not. Diagnosis takes longer. Escalation is delayed. Corrective actions may be less precise. These factors increase system impact, stakeholder scrutiny, and regulatory exposure.
What Regulators Observe in Practice
From an enforcement and oversight perspective, aging workforce and knowledge loss rarely appear as cited violations. Instead, they surface as recognizable patterns across audits, investigations, and self-reports. They are also considered during the enforcement phase of non-compliance; mitigation plans frequently emphasize additional training while failing to rebuild operational capability or institutional memory. As these trends become more transparent with ERO enforcement “cause codes” now present in the ERO Enterprise Align tool, mitigation may require a healthy investment in talent and capability.
Regulators consistently observe repeated human performance issues across shifts or regions that indicate systemic knowledge degradation rather than isolated mistakes. They often see heavy reliance on detailed procedures to compensate for reduced experience. This creates brittle response when conditions deviate from scripted scenarios.
During major system events, regulators see slow diagnosis, uncertainty regarding system behavior, and escalation delays driven by lack of confidence or judgment. Critical decisions may depend on a small number of remaining experts or external resources.
During audits, organizations can prepare. During events, capability is revealed.
Implication for Registered Entities: From a regulatory standpoint, the core question is not whether a procedure existed or was followed. It is whether the organization demonstrated the capability to operate and respond reliably under the conditions that occurred.
Compliance and Governance Considerations
These conditions increasingly signal weaknesses in internal controls over operational risk. They elevate the likelihood of high severity events and reduce regulatory defensibility following incidents. This exposure should not be viewed as an HR issue or a training issue. It is an enterprise risk and governance issue that warrants board and executive oversight.
Leaders should be asking where critical operational knowledge resides, how exposed the organization is to retirements or single point experts, whether decision making capability is being developed or merely task execution certified, and how resilient event response is without external dependency.
Technical Practices That Reduce Risk
Organizations that manage this risk effectively treat operational knowledge as a critical technical asset and secession planning as a means to achieve resilience.
Effective practices include structured capture of tacit knowledge prior to retirements, mentorship programs focused on decision making rather than task repetition, integration of human performance principles into operations and engineering, and deliberate stress testing of judgment during abnormal and degraded conditions.
Strong organizations retain internal ownership of core operational and engineering knowledge even when contractors are used. Documentation supports experience but does not attempt to replace it.
The INPOWERD Perspective: Takeaway
The grid does not fail because people retire. It fails when organizations fail to intentionally preserve, transfer, and develop operational judgment.
Aging workforce and operational knowledge loss represents a growing reliability and compliance exposure that is predictable, cumulative, and manageable only through deliberate technical and leadership action.
Organizations that recognize and address this risk early reduce event severity, regulatory outcomes, and operational fragility. Those that choose not to elevate it as a critical focus will encounter its risk under the most unforgiving conditions.
How INPOWERD Helps Leadership Address This Risk
INPOWERD works with executive teams and boards to address aging workforce and operational knowledge loss as a reliability, compliance, and governance risk, not simply a staffing challenge.
Our approach is grounded in real enforcement experience and operational reality.
INPOWERD helps leadership by:
Do you have questions regarding your organization, compliance, risk, strategy or operations? Get your questions answered.
Schedule a call
