The energy sector is experiencing a talent crisis. Despite concerns about Trump’s move to cut Inflation Reduction Act funding for renewables, experts anticipate that long-term energy sector trends will remain steady, given private companies’ investments, global momentum in renewables and oil and gas companies’ innovation efforts to reduce their environmental impact.
As industries compete for skilled talent, workforce shortages are becoming a broader economic challenge—whether in energy, AI or IT. Among energy sector employers, 71% struggle to find the skilled talent they need, according to Manpower. The shortage of skilled workers is fueled by a sharp rise in energy demand, which is expected to double by 2025, based on a McKinsey report. Both fossil fuels and renewables are affected, albeit for different reasons.
Renewables are poised to be a key driver of growth in energy jobs. The two fastest growing occupations are in renewable energy: wind turbine service technician jobs are projected to grow by 60% and solar photovoltaic installers by 48%, according to the U.S. Bureau of Labor Statistics. The rapid growth has outpaced the talent pipeline, leaving organizations struggling to fill not just entry-level jobs, but also executive and board positions with candidates who have specialized in the energy sector. Meanwhile, fossil fuels will remain an important source of energy and, with a growing involvement in renewables, compete for that talent, too.
Build Skills Through Local Partnership
The rural nature of areas that produce the most oil, gas and renewable energy, means that just getting people onto those locations is a major obstacle to finding skilled people, according to Brian Korgel, Director of The University of Texas at Austin Energy Institute and the Rashid Engineering Regents Chair Professor in the McKetta Department of Chemical Engineering, with whom I spoke over Zoom.
The Permian basin, which spreads over West Texas and southeastern New Mexico, is “the number one oil and gas producing region in the nation, one of the largest, if not the largest gas producing basin in the world, actually” Korgel pointed out, but it is largely rural. “So the one challenge is just literally the number of people who live out there.” But even in more populated and urban areas, the skills needed are not necessarily available.
One solution is to partner with schools and community colleges to develop micro-credential programs that fast-track workers into the sector, according to Korgel. Liquefied natural gas companies that require specific skills have developed tailored training programs to prepare people for jobs, for example in Corpus Christi. Oil and gas companies may have larger budgets to invest in workforce development by collaborating with universities and community colleges. This could include offering internships and apprenticeships.
It may sound onerous for renewable energy companies, with leaner profit margins, to fund such programs. However, companies that partner with schools and educational partnerships could reduce their recruiting costs: engaging in education programs gives them increased visibility, builds relationships with students and can create direct hiring pipelines.
Establishing private-public partnerships to improve local primary and secondary education, may be another approach. Many schools do not benefit from the energy projects in their communities, Korgel noted. This may especially be the case for schools that rely on local taxes. It can lead to deficiencies in literacy and math skills, which are essential even for jobs that don’t require a college degree. Partnering with local schools to shore up these basic skills could also widen local talent pools for energy companies.
Improve Awareness And Perception of Energy Jobs
People with the right skills and in the right location could still overlook energy companies for jobs if they are not aware of the growing job opportunities in this sector.
Heat networks, for example, are an emerging energy technology in the UK, deemed critical for the country’s goal to achieve net zero, according to Bindi Patel, Head of Customer Experience & Communications at Vattenfall Heat UK, with whom I spoke over Zoom. Yet, people are not as aware of the job opportunities in heat networks, because that technology is less well known in the UK, compared to solar and wind.
Professionals, too, may not recognize how their skills might apply to those jobs. Firms need to change people’s ideas about the skills required for these renewable energy jobs: “There is a lack of people with experience in heat networks,” says Patel. However, there are many skills that are transferable from more established areas, like construction, engineering, supply chain, communication and water companies. Firms that explain how skills from established domains transfer to energy jobs, especially in emerging technologies, could see an increased return to their recruiting efforts.
Outreach, Inclusion and Retention
Reaching out to untapped workers expands the talent pool, too. This includes purposeful outreach to women and Black or African American workers. Women represent just 26% of the energy workforce, significantly lower than their 47% share of the overall U.S. workforce. They represented 19% of the workers in newly created energy jobs in 2023, according to the latest U.S. Energy & Employment report. Black or African American workers make up 9% of energy jobs, below their 13% share of the national workforce.
Offering an attractive employment proposition is another way to stave off the talent crunch. Providing growth and development opportunities, inviting employees to rotate through different sectors of the company, allowing people to take part in industry-wide initiatives are some of the strategies for improving retention at Vattenfall, according to Patel.
Inclusive workplaces can improve a firm’s attractiveness to underrepresented talent and improve retention. The best oil and energy companies for women get high marks for ensuring opportunities for all to showcase their competence, making paid time off available, offering sponsorship and mentoring opportunities and providing a respectful, unbiased work environment are factors that contribute to high levels of inclusion.
Takeaway
Energy firms that invest in workforce development today—partnering with communities to strengthen the talent pipelines, raising awareness of career opportunities, expanding outreach and cultivating inclusive workplaces—should emerge in a stronger position to tackle the sector’s worsening talent shortage.