Water Sector Risks AI Skills Gap, Recruiter Warns

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Ofwat’s new plan for adopting AI has been met with enthusiasm in the water sector, but there’s a looming risk of an “AI ambition gap” if the industry doesn’t tackle its growing skills crisis head-on, warns specialist recruiter Murray McIntosh.

The report from Ofwat lays out a clear path for the sector, placing artificial intelligence (AI) at the heart of efforts to enhance environmental outcomes, boost operational performance, and improve customer experiences, all while fostering long-term economic growth. It also highlights that AI is already woven into key industry functions, such as network management, customer engagement, and regulatory reporting.

However, Murray McIntosh cautions that workforce challenges pose a major hurdle to realizing this vision.

According to their Water Industry Labour Report, nearly half of engineers (49%) see a shortage of skilled workers as the top issue facing the sector. Additionally, 66% are contemplating leaving the industry, and 23% plan to retire within the next five years.

The recruitment expert points out that there’s already a gap between the sector’s AI aspirations and the readiness of its workforce. While 31% of engineers are actively working on developing AI and tech skills, these abilities aren’t currently among the most sought-after by employers. Instead, companies are still focusing on hands-on engineering experience, project delivery, and leadership skills.

Murray McIntosh believes this disconnect could hinder AI adoption and limit the technology’s potential benefits across the water sector.

Adam Cave, the Founder and Managing Director at Murray McIntosh, shared his thoughts:

“The direction that Ofwat has taken is spot on. AI is essential for the water sector as it faces some of its toughest challenges, from improving environmental performance to boosting operational efficiency. However, there’s a noticeable gap emerging. Engineers are already stepping up to the AI challenge and are investing in new skills, yet the industry continues to primarily seek out traditional delivery capabilities.

“At the same time, we’re dealing with a shrinking workforce, increasing attrition rates, and mounting delivery pressures as AMP8 gets underway. This creates a genuine risk that our ambitions for AI could outstrip the sector’s capacity to deliver on them. AI isn’t a replacement for skills; it’s a powerful enhancer. But without enough skilled professionals to implement, manage, and interpret these systems, we’ll be limiting its potential.

“In fact, in many instances, AI will actually heighten the demand for seasoned engineers rather than lessen it. The sector can’t simply automate its way out of a talent shortage. What we really need is a more cohesive approach to workforce and technology planning, ensuring there’s a clear connection between what employers need, skills development, and the long-term goals of the sector. This calls for better collaboration among water companies, regulators, and the supply chain, along with a stronger emphasis on attracting and keeping talent in the industry.

“Ofwat has laid a solid groundwork as the sector embarks on its most ambitious investment cycle yet, but if we don’t address the skills challenge at the same time, we risk uneven progress and missing out on valuable opportunities.”