At Wells Rural Electric Cooperative, nearly the entire senior leadership team is eligible to retire within the next five years. For CEO Thad Ballard, that looming reality is 40 years in the making.

Ballard joined the Wells, Nevada-based co-op in 1985 while he was still in high school, tasked with updating distribution system maps. He later moved through roles in engineering, purchasing, member services, government affairs and power supply before becoming CEO in 2024.

Wells isn't alone. Across the country, co-ops are confronting an uptick in retirements at a time when the industry is becoming more complex. According to 2025 NRECA data, 6.5% of co-op employees are eligible to retire now, down slightly from 6.9% in 2020. But that rate will climb to 16.6%—or one in six employees—over the next five years.

For decades, co-ops built succession pipelines around tenure and technical expertise. But today's changing industry—marked by rapid technological advances, increasing power supply demands and expanding member expectations—requires a broader skill set. Leaders must work across disciplines, adapt quickly and communicate effectively in increasingly complex situations.

“You need to always be looking three to five years into the future," says Delaine Orendorff, director, human capital planning and compensation, NRECA Consulting Services. “The skills that you have now might not be the ones you need in the future."

'We really had to dig in'

While Wells, which has 45 full-time employees, is focused on growing its own leaders internally, larger co-ops face a different challenge: scale.

Even with a growing recognition of its importance, succession planning remains a challenge for many co-ops. Training for future positions takes a lot of time, a big ask at co-ops with small staffs. And long tenures, while a good thing, can reduce the sense of urgency to train for roles at co-ops that might not open for years.

“It doesn't provide much incentive to train for a position held by an incumbent who doesn't appear to be moving anytime soon," Ballard says.

Another challenge is managing employee expectations. In the human resources community, Millen says, it's common to equate succession planning with “slotting," identifying specific workers to fill openings based on hierarchy. But that can create unintended tension.

To avoid the perception of creating an heir apparent, Chugach takes what Millen calls a “holistic approach" to building leaders in general versus mapping out specific areas for progression.

“We wanted to prepare people for lots of opportunities within the organization and not just slot them for something specific," she says.

Clear communication is key, Orendorff adds. Co-ops can head off these sensitive situations with constant communication about expectations.

“Emphasize that succession plans are living frameworks, subject to change due to company direction, performance or external factors," she says.

Readiness starts with a plan

NRECA workforce experts emphasize that building a leadership pipeline should begin with strategy, not vacancies. Many co-ops start with a strategic plan to identify—and develop—the skills and competencies they will need for the future.

“Electric co-ops need to do more than simply fill open positions—they need a thoughtful, long-term workforce strategy," says Leigh Taylor, a senior principal in NRECA Consulting Services. “A proactive approach to recruiting, leadership development and succession planning helps attract and retain strong talent, reduce risk and ensure stable operations well into the future."

A strategic workforce development plan can help co-ops identify future leadership needs before positions open, helping them avoid reactive decisions. At People's Energy Cooperative in Oronoco, Minnesota, Gwen Stevens hadn't considered becoming CEO until a senior colleague raised the idea.

“What we're seeing now is that if you are working with your people, coaching and mentoring them, then everything will fall in place," Orendorff says. “It starts with hiring the right people and thinking strategically."

At larger co-ops like Chugach, that strategy is taking shape through more structured leadership development. The G&T's leadership development program has evolved with its organizational changes, including the acquisition of Municipal Light & Power that doubled its size.

“Employees are taking on technology faster than they ever have in the past," says Stevie Frakes, manager, organizational development, who designs and teaches the G&T's programs. “Our managers have to manage that complexity as well as the human dynamic side. We look at both of those components—not just one or the other."

Chugach's manager development program initially focused on helping employees meet qualifications for advancement. But it now includes a leadership development component to help build well-rounded manager capabilities.

A challenge that Frakes is navigating is balancing the wide range of tenure and experiences among the G&T's 450 employees.

“We're fortunate enough to keep employees 20 or 30 years," Frakes says. “But succession planning is also about passing all that information along to the next generation. There's a component of respecting and honoring them as people transition to another role."

At smaller co-ops like Wells, succession planning is less about scale and more about making every opportunity count.

In addition to hiring interns to introduce them to co-op careers, Wells offers six-month “test drives" of senior roles for internal candidates when retirements are expected.

Ballard's predecessor, Clay Fitch, created a temporary chief operating officer position, giving Ballard and other applicants hands-on experience while still providing guidance.

“It wasn't totally turning the operation over to us because there was plenty of oversight, but it really gave us a chance to see what it would be like to run the company," Ballard says. “And the rest of the senior management team got to see how we perform."

And when the CEO hiring process began in earnest, directors invited anyone in the co-op to apply, another move Ballard calls forward-thinking.

“We had quite a few mid-level candidates who were probably thinking they wouldn't get it this time around but there'll be another opportunity down the road," he says. “And what better way to prepare for that opportunity going forward than the interview?"

Succession Planning Resources for Employees and Directors

NRECA has several resources to help co-ops plan for future workforce and director needs.

NRECA Consulting Services helps co-ops plan for future workforce needs and provides guidance to navigate the complexities of human capital management. Services include CEO succession planning, organizational succession planning, workforce and talent strategies, executive search and governance, and leadership strategies.

NRECA takes a proactive approach to succession planning by assessing leadership transitional risk, critical job roles and talent capabilities. The team meets with co-ops to help them align future workforce needs with the organization's strategic direction.

“We focus on the importance of strategic, organization-wide succession planning to safeguard critical knowledge, preserve specialized skills, identify development opportunities and sustain key leadership expertise—so your organization stays resilient and competitive in a rapidly evolving industry," Orendorff says.

For co-op directors, NRECA's Director Recruiting Toolkit helps with board succession planning, particularly screening potential candidates. Its five sections include checklists and guides for directors and resources for potential candidates.

NRECA Consulting Services also facilitates board succession planning discussions.

“Having a thoughtful process in place may make it easier to recruit the best of the best," Pat Mangan, who recently retired after nearly 30 years as a co-op governance expert at NRECA, says. “Prospective candidates need not commit initially to running and serving. Instead, the process invites them to explore the idea first."

When a Co-op Director Is 'Prepared to Lose'

The succession planning challenge extends beyond employees to co-op boards, where recruiting candidates can also be a challenge.

“It can be hard to get people to run," says Pat Mangan, who recently retired after nearly 30 years as a co-op governance expert at NRECA. “And to find people who are interested in spending the time and getting engaged in the electric cooperative program."

The candidate, Matt Kitzmann, 47, lost by 400 votes but gained name recognition and visibility. He's a colleague of Orth's from the Rochester Township Board, where both are supervisors, with “stellar credentials," the incumbent says.

Until the next election, Kitzmann plans to shadow Orth. Recently, he traveled with the board to tour the Midcontinent Independent System Operator facility in Eagan, Minnesota.

“I'm flattered they asked me to attend this tour. It's good to try to train up that next generation and pass the torch," Kitzmann says.

Orth put his seat on the chopping block because “it's the director's responsibility to do some research and try to find qualified people to replace them. I'll be 77 in three years [the time of the next election]. I think that's enough."

Mangan has heard of many approaches to cultivating potential candidates, but that one was unique.