AEP Sustainability - Human Capital Management

Human Capital Management

The pandemic necessitated putting additional safety measures and protocols in place to protect our workers who needed to continue working in their normal work environments.

Human capital management (HCM) is one of the most significant corporate governance issues. It sits at the crossroads between investors, the workforce and customers and is increasingly viewed as material to long-term performance and risk mitigation. Corporate practices and policies relating to issues such as safety and health, compensation, diversity, equity and inclusion, well-being and culture are considered key aspects of a company’s competitive strategy. It can also impact a company’s reputation and is essential to innovation and adaptation to new technologies.

In 2020, the pandemic and racial and social unrest underscored the strategic importance of HCM. At AEP, our people are mission critical to our success and we support them through a culture of engagement, mutual care and inclusiveness and a commitment to Zero Harm.

Protecting Our Employees During the COVID-19 Pandemic

Keeping our employees safe during the pandemic was a top priority for AEP. Providing them with the necessary protection and support became our main focus. In March 2020, we launched a companywide effort to shift more than 60% of our workforce to remote work. To facilitate this change, we provided technology, tools and solutions for our newly remote employees. In addition, the pandemic necessitated putting additional safety measures and protocols in place to protect our workers who needed to continue working in their normal work environments. We increased the frequency of communications and resources to keep all employees engaged, and we provided them with additional benefits and other forms of support to ensure their well-being and work/life balance. All of this was done without losing sight of our commitment to building a corporate culture of engagement, collaboration and empowerment. Learn more about how we protected our workforce during the COVID-19 pandemic.

Our workforce of the future will look very different than it does today. So, too, will the work that we do, as well as where and how we do it. We were already working to frame the future of work before the pandemic. Our efforts were accelerated as we made the shift to remote work environments and implemented new precautions for front-line workers. The shift has also created new opportunities for attracting talent, providing employee development and building culture, as well as highlighting the important role technology plays in keeping us all connected.

Our Future of Work (FoW) initiative includes an assessment of four work classifications, otherwise known as the distributed work model: remote (non-AEP location), hybrid (mixture of working at an AEP location and remote), onsite and field. Based on our learnings, the FoW team is enhancing tools, technology, training and policies to support the distributed work model. In addition, we are exploring opportunities to redesign workspaces to meet our future business needs.

The benefits for employees who work remotely or in the hybrid work model include:

  • Zero Harm Benefits: Reduced driving for thousands of employees (positives for employees and the environment).
  • Flexibility for Employees: Ability to flex around needs at home or with family, as well as ability to work from locations other than the office.
  • Retention and Recruitment: Decreased office attendance provides us with an opportunity to evaluate the potential for employees to expand living locations, as well as the potential for AEP to access broader employee markets.
  • Office Space Optimization: Allows for the adaptation of our office space, which yields cost savings and efficiencies.

The longer we are in this pandemic, the more we are learning – identifying risks and impacts to our employees and culture. We conducted pulse surveys to measure how the organization is responding to working remotely. The survey results indicated that by and large, employees adjusted well and are productive in the remote environment.

Technology investments proved critical to providing employees with the tools they needed to successfully work remotely. We provided our employees with secure digital tools and resources; completed a major upgrade to our internet connectivity, adding 10 times more network capacity; and supported our employees through training and tools to enable them to be successful. The FoW team will continue to analyze options for improved collaboration tools to enhance efficiency and effectiveness of our distributed work model.

We are identifying and anticipating changes within our business units that may be needed as we implement new work models. We are conducting extensive research and analysis to understand our current workflows and the way employees currently do their work. We are also asking ourselves whether it is more cost-effective and efficient to hire contractors, to engage third parties or to use process automation. This allows us to be more flexible as business needs and skillsets change as well as to become more efficient. It also enables us to focus finite resources on the work that is most critical to meeting customers’ needs.

Balancing culture, employee experience and flexibility with cost savings is imperative throughout this journey. The transition will challenge our culture, driving and challenging us to find new ways to stay connected with team members and foster a workplace of inclusiveness – regardless of where people are located.