AMP8 and the people problem in the water industry
In April 2025, the water industry will see a significant challenge with the commencement of Asset Management Period 8 (AMP8), the next 5-year regulatory cycle dictating the investment and targets for water companies in England and Wales.
Delivering against this is going to be crucial for water companies across the nation. One of the key challenges this will be ensuring the right skills and workforce capabilities to meet the ambitious targets set by Ofwat and the broader environmental and regulatory demands. The period emphasises sustainability, innovation, and resilience, requiring a workforce with diverse and evolving skill sets. Bridging skills gaps is essential to achieving these goals, but it presents significant hurdles, not least because a significant portion of the water industry workforce is nearing retirement age. This creates a dual challenge: replacing experienced workers and transferring institutional knowledge to younger generations. Succession planning and mentorship programs are critical but require significant time and investment.
Moreover, attracting and retaining younger talent remains a challenge due to perceptions of the industry as traditional or less innovative. Competing with sectors like technology or renewable energy for top-tier talent intensifies this issue, and this is something that the water sector has struggled with over the past few years.
AMP8 in summary
Following on from AMP7, which saw £55 billion in investment with the goals of reducing pollution, leakage and internal sewer flooding incidents along with major infrastructure upgrades, AMP8 will see an additional £88 billion in funding to be split among the major water companies. With this money, the businesses are required to be stringent with their budgets and is funded through shareholders or borrowing.
AMP8 represents a pivotal phase for the water industry as it addresses growing environmental, societal, and infrastructure challenges. This period will shape how water companies manage their operations, investing in aging infrastructure, and meet regulatory and public expectations. It is set to include targets based around sustainability, efficiency, climate change mitigation and customer affordability.
AMP8 will also see a big push towards net zero, as it marks the final regulatory cycle before 2030, the UK’s net zero target year.
As early as October 2023, water companies submitted plans to the governing body, Ofwat, with the final scrutinisation being completed in December 2024. With the cycle commencing on 1st April, there will be interim performance reviews in mid-2027, with the final assessments and reporting coming in 2030.
Delivering against targets: the people problem
One of the key factors in the successful delivery of AMP8 will be recruiting for the right skills and ensuring that workforces have solid talent pipelines, and this has presented one of the early issues. Several major water companies believe there is going to be an issue sourcing engineers throughout the cycle and believe this will be the biggest challenge they will face. Couple this shortage with an aging workforce, of which a fifth is set to retire within the next decade, and it’s clear that recruitment will be key to the success of AMP8.
According to Water Magazine, the cost of sourcing contingent workers could be an issue too:
“… sourcing talent in this way provides more flexibility as volumes can be tuned up or down depending on demand [but…] one organisation […] found that its average length of tenure was longer for contingent workers than its supposedly permanent engineering workforce, highlighting how much the working world has changed in recent years.”
Sam Mabbott, Associate Director for Energy & Process at Morson, commented:
“2025 promises to be a challenging year for the Water Sector as the new AMP Cycle puts pressure on the recruitment market and the demand for the best talent. We are already seeing several organisations reviewing their talent attraction strategy with this in mind. The volume of engineering personnel that will be needed during this cycle will see cross-sector skills being critically important in satisfying the demands of the supply chain.”
It’s clear that a strategic focus can help water industry companies meet these challenges, with an additional focus on working hard to make the water industry a more attractive place to work, especially with competition from other industries that can often be perceived as more progressive.
But there is another talent pool that shouldn’t be forgotten when sourcing skilled engineers.
The talent pool that could be key
Every year, between 12 – 16,000 full-time personnel leave the armed forces. The circumstances of their departures can vary, but many of these will be heading into a civilian career and come with a wealth of experience and untapped skill potential. Many of these veterans will have spent their entire careers to that point in the armed forces. This means the biggest challenge they can face is translating their skills and experience into the civilian world, but with the right sort of help and guidance these skills can be unlocked and unleashed across a wide variety of sectors and industries.
This means a broad talent pool of multi-disciplined engineers, with sought-after soft skills developed in the military, are becoming available every year, something that could be vital for the water industry’s challenges. The talent pool will replenish every year,
For example, many veterans will learn engineering skills as part of their deployments, and even though they may not be directly related to the water industry, the skills are transferable, especially with some retraining.
How Morson’s ex-forces recruitment has helped our clients
Morson has an extensive track record of recruiting and placing ex-forces talent across multiple sectors, candidates we’ve attracted through attendance at events and running our own dedicated events.
Through our ex-forces recruitment programme, we’ve made a commitment to ensuring that once a service leaver begins a new role – either as a Morson employee, permanent staff or contractor with one of our clients – they have access to the support they require through our expert HR and care support teams. The size and scope of our business makes us uniquely placed to welcome ex-military people into our Group, but ensures we are able to gain all the necessary knowledge and insight required to give these individuals the best chance at starting the next chapter of their lives.
Morson also holds the Employer Recognition Scheme (ERS) Gold Award, the Ministry of Defence’s highest badge of honour for organisations which have signed the Armed Forces Covenant and demonstrated outstanding support for those who serve and have served, their spouses and partners.
Our water industry client Severn Trent, who has recently attained the same Gold status, is already some way on their journey and has been supported by Morson in several ways. By leveraging our capability, Severn Trent is able to elevate opportunities for ex-services personnel, showing their alignment with the Armed Forces Covenant. Our Morson Digital Studio has created marketing collateral for three careers events/open days, as well as role attraction campaigns, dual branding and video/podcast interviews. They have also created a dedicated forces careers page and produced interviews with ex-forces personnel, along with several videos, to further emphasise Severn Trent’s commitment to veterans, with the team being one of the key client exhibitors at our Salford-based dedicated ex-forces recruitment event.
The key differentiator when hiring ex-forces talent is ensuring that the organisation is ‘forces friendly’. This includes values alignment and building an ex-forces community of likeminded individuals who feel part of the wider culture. It also includes flexibility, such as offering additional paid leave for army reservists and the opportunity to retrain.
With such a large pool of candidates leaving the armed forces every year, this could be a potential solution to an existing skills crisis in the industry. Organisations who are supportive of ex-forces talent will have an edge on competitors throughout the AMP8 cycle.
Get in touch with our ex-forces recruitment team to find out how we can support your talent acquisition goals here
