Expanded
Summary
The Human Capital Resource Challenge: Recognizing
and Overcoming Small Utility Workforce Obstacles
DAVID SW ITZER, M A NU E L P. TE O DO RO , A ND S T U ART K AR AS I K
http://dx.doi.org/10.5942/jawwa.2016.108.0093
A utility’s performance depends on the availability of
adequate financial and natural resources. It also is possible that access to human capital resources within a labor
pool may similarly affect a utility’s ability to carry out its
mission successfully. Research in economics has long
pointed to an educated labor force as a positive factor in
firm production, and access to educated workforces may
similarly impact water utility performance. This study
investigated how a lack of human capital in the labor
market may present a challenge to utilities. The study
begins with a statistical analysis of US Safe Drinking
Water Act (SDWA) compliance as a measure of performance demonstrating that access to an educated labor
market can affect compliance. However, the impact of
human capital resources on compliance also depends on
the size of the utility and the type of regulatory requirement. The second part of this analysis uses a case study
examining two small utilities to identify one way that
small utilities may overcome human capital limitations.
The SDWA analysis looks at the health and management compliance records of all municipal utilities from
2010 to 2013 (Figure 1). Health compliance relates to a
utility’s ability to control the levels of contaminants in
its water supply and includes maximum contaminant
limit and treatment technique violations. Management
compliance relates to the ability of a utility to follow
SDWA protocols for testing water, filing reports, and
communicating with the public. Figure 1 shows a graphical presentation of the results. While compliance with
0.9
0.8
400
0.7
55
0.6
7
0.5
1
0.4
5 10 15 20 25 30 35 40 45 50 55 60
Labor Market With Bachelor’s Degree—%
3,000
B
1.0
0.9
400
0.8
55
0.7
7
0.6
Predicted
Probability of
Compliance
A
Water and Sewer
FTE Employeesa
3,000
Corresponding author: David Switzer is a PhD
candidate in the department of political science at
Texas A&M University, 2010 Allen Building, 4348
TAMU, College Station, TX 77840 USA;
[email protected].
Predicted management compliance (A) and predicted health compliance (B)
Predicted
Probability of
Compliance
Water and Sewer
FTE Employeesa
FIGURE 1
management regulations depends mostly on the size of
the utility, health compliance depends on both scale and
access to human capital. Large utilities were found to use
educated labor markets in a way that small utilities do
not. Small utilities serving areas with low human capital
struggle most to comply with SDWA health regulations.
Still, some small utilities in low-education areas manage
to perform at high levels. A comparative case study analysis was used to isolate management strategies that may
help overcome human capital limitations. The study
examined two small utilities with similar characteristics
except for an important difference—one utility demonstrated an excellent compliance record, while the other
utility had a poor compliance record. Cross-training was
identified as one workforce strategy that may have
allowed the better-performing utility to maximize its
human resource capabilities. Employees at all levels of
the organization received training in all phases of water
and wastewater treatment. Essentially, by training
employees to be competent in multiple utility operations,
the utility deployed a more flexible workforce. While this
case study is preliminary, the findings suggest that crosstraining may be a workforce strategy worth exploring.
0.5
1
5 10 15 20 25 30 35 40 45 50 55 60
Labor Market With Bachelor’s Degree—%
Source of labor market data: US Census Bureau (2013)
FTE—full-time equivalent
aMeasured
on a natural logarithmic scale
Red shading represents a relatively low predicted probability of compliance, while blue shading represents a high probability of compliance.
S WITZER ET A L. | 108: 8 • JO U R NA L AWWA | A U G U S T 2016
2016 © American Water Works Association
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