Human Capital Management

Culture serves as the foundation for success at AEP. An engaged, collaborative and appreciated workforce is an empowered workforce. One that is more likely to embrace change, drive continuous improvement, take ownership, and value personal and professional growth. We are committed to cultivating a culture of empowerment at AEP. We recognize this doesn’t happen overnight and that culture is a journey that requires constant focus and effort. If we don’t continuously nurture culture, we risk losing the strong foundation we have worked so hard to build.

We continue to measure our culture journey and progress through our annual employee culture survey. 2021 marks our eighth consecutive year of formally surveying employees about their experiences with culture at AEP, including the opportunity to provide feedback on their perceptions of and fulfillment they receive from their jobs. The culture survey provides a process for leaders to share results with their teams, facilitate discussions for how to improve employee engagement, and take actions toward that improvement throughout the year. In addition, AEP’s Human Resources Committee of the Board reviews the culture and employee engagement results annually, providing additional oversight.

The past two years have tested us in a variety of ways, as the majority of our workforce shifted to a remote work environment during the pandemic. Our workforce will continue working in a distributed environment (remote, hybrid, or onsite and field), requiring us to listen, adapt and learn to ensure employees remain engaged and have opportunities to learn and grow. Part of our culture commitment is that every employee, regardless of where or how they work, has a positive experience at AEP. Our 2021 employee culture survey was conducted with this in mind, giving us the ability to analyze the results by work designation. This allows us to be more mindful of our efforts as we continue to drive one culture at AEP.

Our 2021 culture scores improved across the organization, showing that we continue to make in-roads, even during difficult circumstances. We experienced a slight drop in employee participation compared with previous years. However, we are still pleased that 89% of our workforce was engaged in the process. We strive to make progress year over year, knowing there is room to grow and improve. This survey serves as a foundation for insights on where we should focus our efforts.

For the third consecutive year, AEP has earned the 2022 Gallup Exceptional Workplace Award, which recognizes organizations that incorporate employee engagement into core business values. AEP is one of 41 companies recognized – meeting Gallup’s rigorous standards of excellence.

According to the U.S. Bureau of Labor Statistics, over 47 million American’s voluntarily left their jobs in 2021. This unprecedented mass exit, otherwise referred to as the Great Resignation, was accelerated by COVID-19 but is part of a continued trend of today’s labor market. AEP has been able to mitigate the impact, experiencing an overall turnover rate below 10%, with voluntary turnover and retirement turnover both under 3.5%. We are not completely immune though. We are also impacted by shifting factors that include generational shifts, employee retirement, job movement and relocation. We track and forecast the number of employees who plan to leave over the next several years, and we recognize that turnover presents the challenge of replacing legacy knowledge. It also creates opportunities to identify our future talent needs and diversify our workforce.

The battle for talent in today’s tight labor market is fierce because we are competing with other industries trying to tap into the same talent pool. The highly competitive nature of today’s job market requires us to identify more impactful ways to reach prospective employees. This includes moving from a more traditional talent acquisition approach to a programmatic, purposeful and digital recruiting strategy allowing us to reach broader and diverse networks. This is especially important as our company transitions toward a clean energy future – one that will require new and innovative skillsets.

The global pandemic also created new ways of looking at how and where we perform our work. Remote and hybrid work provides many benefits for our employees and company, including cost savings and flexibility. It increases our access and ability to hire diverse candidates with unique experiences, beliefs, ideas and backgrounds outside of our traditional footprint. We are identifying and anticipating changes within our business that may be needed as we implement new work models. We are working to better understand the types of jobs and talent needed, in along with where the work can be conducted. Leaders are also required to take implicit bias training to reduce the risk of their own biases preventing them from selecting the best candidates to interview or hire.

Technology and innovation are deeply rooted into the fabric of our culture at AEP. For more than 116 years, our employees have leveraged their experience and innovation to transform AEP into a clean, reliable and affordable energy company with a highly engaged workforce.

We view technology as an enabler to drive positive change for our employees, customers and communities. Leveraging technology and analytics enables our employees to identify cost-effective and efficient solutions to better inform business decisions. This requires a cohesive business model built on a foundation of strong partnerships, bringing the power of many together. These partnerships allow us to identify potential risks or disruptions and inform our efforts to build modern and transformative products, services and solutions.

Keeping our employees connected is vital to creating a healthy, productive and engaged work environment, especially as the majority of our workforce now operates in a distributed work model that includes remote, hybrid, on site or in the field. We are in the process of expanding our software solutions and technology toolset and allow more efficient collaboration across our geographically dispersed workforce.

As we continue to advance our future work model, developments in technology provide an opportunity to shift more manual, resource-intensive and sometimes dangerous work, to more automated processes. It also allows us to leverage synchronous communication through various channels. We are revamping legacy systems to be more nimble, giving us access to real-time data and the ability to collaborate more effectively. In addition to driving efficiency, this technology frees up resources, creates a culture of engagement, and provides a safer environment for our employees and customers.

Historically, we have looked at making improvements based on the specific work we ourselves or our organization can control. We are now looking to improve our work as it flows from start to finish. That means we are optimizing the end-to-end workflow, which typically crosses multiple organizations, and driving efficiencies across the entire process and not just within a function. This is leading to stronger outcomes in work quality, efficiency and cost optimization. Additionally, as we optimize the workflow, we are doing so with our strategy and future in mind. Many areas of our industry are in the midst of transformation — from traditional fossil fuels to renewables or from manual work to leveraging technology. The newly redesigned workflow takes into account current and future changes in our strategy.

At AEP, we provide development opportunities for employees at every level, whether through informal professional development or formal development programs. In addition, several of our Employee Resource Groups and utility professional groups, such as Women’s International Network of Utility Professionals (WiNUP), sponsor programs and events that focus on employee education, career advancement and personal and professional development.

AEP’s Targeted Development Programs are one way we are building a guided learning path to support career advancement for our employees. The corporate Targeted Development Program is a one-year program focused on providing accelerated development opportunities for potential future leaders company-wide. In addition to increasing leader capability and readiness, this program is focused on growing a diverse talent pool within the organization. This is especially important as we move to a more digital and distributed work environment that requires a flexible, innovative and diverse workforce. Through development planning, mentorship and coaching, relationship building and hands-on project experience, each participant is broadening their knowledge and understanding of AEP and improving their leadership skills. This provides a deeper, stronger and more diverse talent bench to support our future needs.

Transmission & Distribution University (TDU) is another development program focused on enhancing learning, performance and retention. This program focuses on equipping employees with tools and resources needed to optimize learning and ensuring all employees are trained, qualified and competent for work while giving them more control of their learning path and development. Members of the TDU Team are trained and certified through The Ohio State University’s Developing a Curriculum (DACUM) and Systematic Curriculum & Instructional Design (SCID) processes.

We also provide a broad range of training and assistance that supports lifelong learning and transition development. This includes performance coaching; operational skills training; resources to support our commitment to environment, safety and health; job progression training; tuition assistance; and other forms of training that help employees improve their skills and become better leaders. In 2021, our employees completed more than 719,000 hours of training in programs for which we track participation. We invested more than $2 million in employee education, supporting 575 employees through our tuition reimbursement program. In addition, AEP’s educational assistance program partners with a third-party administrator that provides employees with access to discounts at numerous colleges and universities across the United States.