How does the US nuclear power industry utilize outsourcing?
There are drastically different approaches to outsourcing in the US nuclear power industry. Some owners completely outsource key functions that other owners would never dream of outsourcing. Some sites outsource less than 5% of their total steady state workforce. Others outsource as much as 40%. On average, the US nuclear power industry outsources about 10% of their steady state workforce.
How should you think about outsourcing?
This can be a “hot button” topic and there are compelling arguments for and against outsourcing different functions. Many of these arguments depend on the operating and regulatory environment of the organization in question. We have developed four “rules of thumb” to use when thinking about outsourcing a given function. When these rules of thumb are combined, they provide a useful starting point for making decisions related to outsourcing:
Proximity to the reactor
Generally, the further your job is from the reactor, the easier that job will be to outsource.
Total headcount within the functionAssuming outsourcing can achieve cost savings (also a debatable topic), then you would want to look for functions that have sufficient headcount to achieve economies of scale.
Industry approaches to outsourcing the functionHow much is the industry utilizing outsourcing within this function?
Frequency of the work requiredHow often must the same or similar work be performed (daily, weekly, monthly, seasonally, or sporadically?
With these “rules of thumb” in mind, any thoughts of outsourcing Operations (NRC regulations notwithstanding) quickly disappear since Operations is a function that is close to the reactor with effectively zero outsourcing across the industry. On the opposite side, Facilities surfaces as a potential outsourcing candidate because it is far from the reactor, and the industry heavily utilizes outsourcing in this function. In fact, Facilities is the most heavily-outsourced function in the entire US Nuclear Power industry. Nearly 50% of all Facilities staff are outsourced. Another driver in outsourcing Facilities is the irregularity of their workload. These factors paired with the fact that Facilities is, on average, a reasonably large function in terms of total headcount, make it a strong outsourcing candidate.
What’s right for your organization?
Models and rules of thumb can help drive more introspective thought. However, they are not a substitute for sound judgement. Every site is unique and therefore no single approach is correct for everyone. Outsourcing is a tool. When used properly it can enhance the efficiency and productivity of your organization. When used improperly it can do the opposite while damaging the morale of your employees.