Here’s a statement that won’t surprise you: The renewable energy sector is experiencing unprecedented growth. What may surprise you, is the incredible exponential trajectory of this growth. So, here’s some context around causation:
- There’s a global energy crisis which has sparked an unparalleled surge in renewables, as the world is on track to incorporate as much renewable power in the next five years as it has in the previous two decades.
- The invasion of Ukraine by Russia has raised concerns about energy security. In response, countries are turning to renewable energy sources like solar and wind to lessen their reliance on imported fossil fuels, whose prices have soared.
- The cost of renewable energy is dropping. The cost of solar photovoltaic electricity has dropped by 85% since 2010, while the cost of both onshore and offshore wind electricity has decreased by roughly 50%. As a result, both sources are now in line with the cost of fossil fuel electricity.
And for a comprehensive picture, here’s a timeline of the key milestones in the growth of solar and wind energy:
One final point on the sector’s makeup: the International Energy Agency (IEA) in June this year, reported that global additions of renewable power capacity, will jump by a third by December, across the various renewable technologies. This gives you an idea of the where the demand will be for talent, by technology. See below.
So… as you can imagine, with this all this growth comes inevitable workforce complexities, as well as recruitment and retention and challenges.
These challenges can range from finding talent with the right specialised industry skills to building workforce capacity for new renewable projects. Many of the industry’s recruitment and retention challenges are related to contingent workers, relocating talent, and abiding by the compliance legislations of multiple jurisdictions. It’s a complex HR landscape.
Today, we’re exploring the unique challenges of HR business leaders like you, in the renewable energy sector. We offer insights and solutions to the major challenges of the sector today, with the aim of helping you to streamline your workforce management for a more productive, less disruptive, future.
According to the IEA, in 2019 the entire energy sector employed over 65 million people, or roughly 2% of the global workforce: 50% of these workers, are in renewables. The problems that exist today, including food shortages, fluctuating energy prices and persistent inflation rises, are attributed to COVID and the ongoing conflict in the Ukraine. Yet despite these challenges, the demand for skilled workers in the energy sector continues to increase rapidly.
Last year, the IEA published the World Energy Employment Report. From this report, we can glean insights into the landscape for hiring renewable energy talent. These include:
- Energy employment exceeds pre-pandemic levels today thanks to resilient growth in clean energy.
- Supply chain disruptions and project delays in the energy sector, particularly offshore wind, oil and gas, and energy efficiency retrofits, have been caused by hiring gaps and tight labour markets.
- Over half of all energy employment is in the Asia Pacific region.
- The sector calls for higher skilled workers, than other sectors.
- Workers in coal and other fossil fuels have many of the skills required to fill talent gaps in the clean energy sector.
- It’s new project construction, including component manufacture, that is the largest driver of energy employment across the supply chain.
Below, from the IRENA, shows the key factors influencing renewable energy employment.
The energy job market is expected to undergo significant changes as countries and corporations hasten their decarbonisation efforts to meet net-zero emissions targets. But as there is currently no worldwide standard dataset for employment in the energy sector, hence we’re bringing the intel together from all credible, global sources.
The Rise of Specialised Skill Requirements
The demand for highly specialised, skilled talent in niche job categories is a current hallmark of the renewables job sector. This is a particularly fraught recruitment and retention challenge of the industry.
Compared to the average across all other sectors, the energy sector demands more skilled workers: there’s more medium and high-skilled workers and fewer low-skilled workers. For example, engineers are highly skilled and account for approximately 45% of the energy workforce.
This 2022 data from the IEA shows the global comparison of skills required by the energy sector, versus all other sectors:
More specifically, the skills needed to drive the transition to clean energy include:
- Engineering and design. The scarcity of renewable energy engineers, particularly in areas such as photovoltaics, wind energy, and grid integration, creates significant obstacles for project development and optimisation.
- Skilled technicians, electricians, and installers are necessary for renewable energy systems, but a shortage in these trades limits growth potential.
- Project management and development: managers with expertise in renewable energy projects are in critically short supply. These professionals play an essential role in identifying greenfield project opportunities, driving project operations and success, stakeholder management, and delivering a timely and cost-effective project.
The challenge presented to the renewable energy sector for finding qualified candidates is multi-layered. The lack of volume in the market is one thing – that is, the literal number of workers with the right skills, don’t currently exist. As well, transitioning talent from fossil fuel to clean energy roles requires reskilling and upskilling. And this takes time.
There is a positive here though. According to the Clean Energy Council of Australia, although the highly skilled roles require specific training – like power systems engineers – there are also many roles that require lower-level skills. These include electricians, general technicians, and a host of tradespeople including in mechanical and electrical trades, all of which can be sourced from other industries.
Rapid Technological Advancements
The current technologies emerging in the renewable energy sector include advancements in solar power, wind turbine innovations, breakthroughs in energy storage, hydropower, biofuels, and smart grid integrations. These rapid technological advancements are transforming the renewable landscape, helping the shift to sustainable energy sources more achievable and more cost-effective.
Each of these areas calls for a distinct set of skills and expertise. For example, solar energy projects require professionals with an understanding of photovoltaic systems, while wind energy projects require expertise in turbine technology and maintenance. The field is continually evolving with new technological advancements, making it difficult to accurately identify future skills requirements.
To bridge the skills gaps, employers can work with educational institutions and training centres to develop specialised programs that equip individuals with the necessary skills. This could include offering internships, apprenticeships, and scholarships to attract and nurture talent in the renewable energy sector. By investing in the development of future professionals, employers can ensure a sustainable workforce for their projects. And overcome chronic recruitment and retention challenges.
Crucially when it comes to technology, staying up to date with the latest and emerging developments is critical for successful workforce planning.
Geographic Constraints in Renewable Projects
Renewable energy projects are often located offshore from a company’s country of origin, or in remote locations. This can pose challenges for recruiting and retaining highly skilled workers.
Remote areas often lack the necessary infrastructure, such as housing and transportation facilities, which can discourage potential candidates from considering job opportunities in these locations. However, there are ways to overcome this limitation. One approach is for employers to offer attractive compensation packages that include benefits such as housing and transportation allowances, as well as relocation assistance. Another option is to provide adequate housing and transportation facilities near project sites, which can incentivise professionals to work in remote areas.
Also, employers can leverage technology to overcome geographical barriers. Remote monitoring and control systems enable real-time management and maintenance of renewable energy projects, reducing the need for on-site workers. This creates opportunities for remote or rotational work, minimising the impact of geographical constraints on professionals.
Another great solution is to engage contingent workers. Tenure limited workers in offshore or remote locations is not only cost-effective for your business, but it also allows you to select from a growing cohort of candidates who are highly skilled and can be sourced from any global location. Therefore, the candidate pool is vast. Their expectation of short-term work, coupled with a willingness to take on well-paid work irrespective of location, is a commercially and strategically sound solution to the industry’s recruitment and retention challenges.
Navigating the Complexities of the Renewable Energy Sector
The complexities of the renewable energy sector are multi-layered and go beyond recruitment and retention challenges. In this section, we’ll look at the main complexities of the sector including regulatory compliance in renewables, talent competition, and the need for a diversity of expertise.
Regulatory Compliance in Renewables
Engaging workers in different jurisdictions presents recruitment and retention challenges related to the different rules of the different countries. And this applies to both contingent workers and employees. Tax considerations by country are varied and changing.
The simplest way to navigate these challenges is to engage an expert in the field of talent sourcing, management, and compliance (like CXC). Coupled with international legal and tax advisors, you will be able to compliantly run global projects without breaching local tax and workforce rules.
The other consideration is this: while government support is crucial across all the relevant jurisdictions of the renewables sector, there is also a need for policy reforms that address the specific challenges faced by renewable energy employers. This would be greatly helped by creating standardised certifications and training programs, establishing clear guidelines for project approval, and promoting collaboration between industry stakeholders, government and educational institutions.
Competitive Talent Market in Renewables Sector
The fierce competition for top talent in the renewable energy industry stands as one of the biggest challenges to the globe’s shift to net zero (NZE). As mentioned earlier, upskilling and reskilling workers from fossil fuel industries is one medium-to-long term solution to talent shortages. But a more strategic talent plan is needed by organisations in renewables, as well as those in adjacent industries. Here are some solutions for your organisation to consider:
Global talent sourcing: broaden your search beyond your country of origin. Renewables is a truly global marketplace, and organisations are going to great lengths to secure talent, no matter where they’re located. Limiting your search for talent to your own country will severely limit your potential talent pool, and your ability to execute projects. And as we mentioned earlier, contingent talent is a huge boon for the renewables industry. Highly skilled, short-term contractors from any global location are perfect source of workers for your upcoming projects (contact CXC if you’d like to learn more).
Understand your talent competitors: this means not only knowing your direct industry rivals with whom you will compete for talent but being across all facets of the renewables landscape. From renewable energy developers to equipment and component manufacturers, from project owners to installers and technology providers, your responsibility to be aware of all stakeholders to the industry will allow you to make shrewd hiring decisions.
Understanding the breakdown of jobs in the industry is an important source of industry intel. See below from IRENA.
Segment your worker profiles: across both contingent and permanent talent, you’ll need to develop a strategy for two major categories of workers: those in the field, and those in the office. Thinking about utility work; it’s definitely not for everyone. A worker accustomed to meetings and spending their day in the office, are unlikely to thrive in the field working on power lines or in substations. Your field engineers will require a different hiring strategy to your finance or marketing talent. So, developing a fit-for-purpose recruitment strategy according to the nature of the work is crucial to building a sustainable and purposeful talent pool.
The importance of your employer brand: providing prospective talent with clear and meaningful insights about being part of a critical industry that impacts everyone, is a powerful talent magnet, especially for grassroots talent. This messaging to the new generation of workers may require a strategic shift. But keep in mind, these messages are not incongruous with where the industry, and your company, are headed. Energy companies, renewable companies and all parallel subsectors are focused on sustainability and decarbonisation. And these facts resonate deeply with young talent.
Foster industry partnerships: consider getting involved in industry partnerships. This is a powerful way for your organisation to create long-term talent pipelines, become a known industry identity and a sought-after employer. Partnerships between regulatory bodies, technology providers, engineering firms, consulting firms, utilities companies, trade schools, higher education institutions and even high schools, will create a significant impact on the incoming talent to the sector.
Diverse Experiences: A Renewable Workforce Essential
Given the breadth of technologies, sources and outputs of the renewables sector, a diverse array of skills, knowledge, training and expertise is required to keep the sector growing.
Looking at the data below from IRENA, we can see the number of jobs per renewable technology (2022). This shows that the expertise in the market is both broad and diverse. It also shows the need for companies to potentially shift their talent profile, to ensure the right knowledge and expertise is available to meet their skills needs.
Outside of the technical skills called for in the renewables industry, other – highly transferable – skills are also needed, if the industry’s recruitment and retention challenges are to be met. These include:
- Analytical thinking: To combat the effects of climate change, renewable energy must grow quickly, accompanied by updates to the power grid. Companies addressing this issue need employees skilled in data-driven modelling and risk analysis to make these systems more resilient and sustainable.
- A sustainability mindset: Clean energy professionals strive to promote sustainability by prioritising economic viability, environmental protection, and social equity in their work. The industry, and individuals working in it, maintain efforts to create job opportunities and contribute to developing robust local economies and energy systems, all while supporting present-day needs without jeopardising the needs of future generations. Workers who have a clear grasp of the importance of sustainability, will be keenly sought-after.
- Problem solving: Governments and renewables organisations are counting on problem solvers to help with an array of industry requirements. From construction to supply chain management, project management, financial analysis and modelling, workers from heavy industry like transportation, construction and manufacturing will make valuable talent contributions to the renewables sector.
Cultural and Ethical Considerations in Hiring
The world is currently in the midst of a massive shift in energy production and consumption. As we move towards renewable energy sources and away from fossil fuels, we are not only reorganising our energy infrastructure but also redistributing power, wealth, risk, vulnerability, and resilience. This transition raises numerous ethical concerns that must be addressed if we are to create a sustainable future for ourselves and generations to come.
Cultural Shifts in Transition to Renewables
The shift to renewables will require organisations to undertake an operational approach that is both ethical and responsible. Companies directly in the sector, and even those adjacent to it, need to be completely transparent about their environmental impact, their investment strategies, and their support of the local economies in which they operate.
This ever-changing landscape is complex. And a significant organisational shift may be required to your company culture. Considerations for your culture to be aligned to a high standard of ethics in the shift to renewables, include:
- Hiring processes: ensuring role specifications include sustainability practices and knowledge, offer flexible or hybrid working practices to limit impact of vehicle emissions, and use green credentials and environmentally friendly recruitment methods.
- Performance management: assessing workers (including contingent workers) against sustainability objectives and targets in performance reviews. Linking sustainability values to worker’s remuneration and benefits.
- Learning and development: providing training to all workers on environmental issues relevant to their roles. Integrating sustainability content into learning programs. Ensuring your onboarding procedures include information about sustainability performance and the related requirements of employees.
- Leadership: ethical leadership includes introducing sustainability role models at a senior level. This involves establishing a sustainability and environmentally aware accountability culture at all levels of the organisation. It also includes adding environmental factors to your organisational values and operating by those values.
Currently, 48% of workers believe it is extremely important for businesses to prioritize sustainability practices and values in today’s society.Source: HCA Magazine USA
Sustainability and Ethical Expectations
Shifting your internal culture to one that is more ethical isn’t enough. You need to walk the talk.
In your company’s approach to hiring and workforce management, evidence of your green credentials is paramount, without ‘greenwashing’. This includes prioritising a shift towards sustainability which involves, amongst other things:
- Practicing energy efficiency.
- The reuse and recycling of materials.
- Measuring and minimising the company’s carbon footprint.
- Education and training for employees on sustainability practices.
- Working exclusively with suppliers, partners and vendors that practice sustainability.
- Reducing paper use.
Prospective hires are assessing your organisation for your sustainability credentials, as much as you’re assessing them for suitability to your business.
Other initiatives HR leaders can consider for inclusion of sustainability in hiring and retention of talent include:
- Publicise the green initiatives in place in your organisation. Ensure these initiatives are endorsed and promoted at a senior level, so broad scale awareness occurs.
- Public companies in the US are being asked by the SEC to share their climate risk and greenhouse gas emissions profile. If your company isn’t public, it’s still a great move to demonstrate your green credentials to prospective hires.
- Publish blog posts, undertake speaking engagements at industry events and attain media coverage through a targeted publicity campaign, to showcase your company’s work to minimise their environmental impact.
The renewable energy sector is undoubtedly an exciting and growing field: one that is crucial to the very existence and habitability of the planet. But navigating the recruitment and retention challenges in this sector calls for a considered approach by organisations both in the sector, and those parallel to it. Organisations need to focus on identifying talent gaps, understanding the sector’s makeup and talent components to best navigate it, and be strategic in identifying ways for building talent pipelines.
By working collaboratively with industry partners, the education sector, government and policymakers, employers have the opportunity to successfully navigate the recruitment and retention challenges in the renewable energy sector to ensure a skilled workforce for the future.
Up next in this series, we’ll take a deep dive into the practicalities of facing hiring challenges in the sector. We’ll look at the sector-specific strategies for finding the right expertise for your business, and we’ll cover the importance of communications and compliance in energy sector hiring. Don’t miss it.