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How a Potential Labor Shortage Could Slow Down the Clean Energy Transition
- Feb 6, 2023 9:55 pm GMT
Creating a more sustainable energy sector is a top priority for industry leaders and company executives alike, especially as pressure from eco-friendly consumers increases.
However, one challenge the energy industry faces is a massive labor shortage. What needs to happen for the industry to overcome a labor shortage? Learn more about what the future looks like for energy workers.
The State of Employment in the Energy Sector
Labor shortages are plaguing the American economy, from manufacturing and food and beverage sectors to retail and hospitality. According to the American Works Data Center, there are too many jobs without enough employees to fill them in several industries, with around 6 million unemployed Americans in the nation.
The energy sector is no stranger to labor shortages, and it's becoming increasingly clear that the clean energy transition cannot happen without enough skilled workers. More employees are necessary to install renewable infrastructure, educate the masses about clean energy, help modernize the grid and perform plenty of other tasks to make progress toward a clean energy economy.
Energy Sector Employment Statistics
Energy sector jobs are currently growing faster than employment in the domestic economy. However, rapid job growth can be a double-edged sword. With a shortage of skilled workers to fill the high number of available jobs, how can energy companies complete projects successfully?
Here are some key energy sector employment statistics to help paint a clearer picture of job growth in the industry.
- Energy jobs grew by 4% in 2021 — much faster than overall occupations — and added more than 300,000 jobs.
- In 2021, 89% of solar companies found it difficult to find qualified applicants for open roles.
- About 2,500 solar photovoltaic installer jobs are expected to emerge annually into 2031.
This handful of statistics shows the energy sector's growth clearly. However, one more figure is crucial to understand why a labor shortage could be on the horizon — around 40% of energy workers lost their jobs due to the pandemic. After widespread layoffs and a slowdown in the general economy, the energy sector is now facing challenges hiring for positions that were filled before the pandemic.
The Battle of Clean Energy vs. Fossil Fuels
Without enough skilled workers, the clean energy industry will likely face stagnation. Abigail Ross Hopper, president of the Solar Energy Industries Association (SEIA) trade group, recently said she believes that expanding and finding employees in the tight energy market will be difficult.
Electric vehicles and battery production are two areas that the labor shortage will impact the most. On top of the lack of workers, one significant pain point is finding the right storage solutions to overcome the “duck curve,” a major imbalance between peak demand and renewable energy production.
How can renewable energy companies stand up against fossil fuels that always provide consistent power output? That’s a good question — and there’s currently no silver bullet solution. In the next few years, expect significant tension between the fossil fuel and clean energy industries. Both industries have a specific agenda and neither is ready to back down from the other or future challenges.
Is a Future Labor Shortage Guaranteed?
In response to a slowdown in battery production and an overall lack of workers in the energy market, some companies are getting creative, switching up their approach to finding workers. For example, Chief Executive of SunPower Corp. Peter Faricy said it's not out of the question for their organization to acquire other companies specifically for their employees.
Instead of hiring qualified candidates right off the bat, organizations might need to retrain and upskill other tradespeople to meet the evolving needs of the business. In other words, organizations might need to train roof workers on how to install solar panels or teach auto manufacturers how to build EVs. Both of these scenarios are rhetorical, but it highlights how far clean energy companies will go to find skilled labor.
How Energy Companies Can Garner and Retain Skilled Employees
It's likely that several countries around the world will continue relying on fossil fuels for the foreseeable future until more workers can help support the clean energy transition. If experts are correct that the economy is almost entering a recession, it's possible that could be a saving grace for the already struggling energy sector — especially if unemployment rates rise.
It's always crucial for clean energy companies to acquire and retain qualified employees. Here are some potential opportunities to help accomplish this goal.
Have a Strong Brand Message
Employees appreciate working for a brand with a strong mission statement. Companies trying to garner new employees without a message will struggle, as people are less likely to work for an employer they know nothing about. Additionally, companies must stand out from the crowd by maintaining a strong brand image outside of the clean energy transition.
Outline Career Development for Key Positions
Today's workforce wants clear, concise pathways to follow regarding career development. Staying in one entry-level role can feel frustrating and even lead to burnout. Employees should know exactly how, when and what they need to do to take their careers to the next level.
Implement Well-Structured Training Programs
Another way to acquire new employees is to use a well-structured training program as a unique selling point (USP). Offering comprehensive training for new hires can bode well for energy companies looking to fill more unfilled positions.
Enhance Employee Compensation and Incentives
While it may seem obvious, another tried and true way to retain skilled existing employees is to bolster salaries, benefits and other incentives to make the job more appealing.
The Great Resignation proved difficult for all types of employers and those in the energy industry are no exception. Modern employees want to be paid what they're worth, feel valued and fulfilled and be respected and recognized by their employers.
Overcoming Labor Shortages to Transition to Renewables
There's no question that ushering in a new era of clean energy is a top priority for employers in the energy sector. With the lingering effects of the COVID-19 pandemic, the worsening climate crisis, gas prices soaring and persistent supply chain backlogs, it's never been more important for countries worldwide to support a clean energy economy.
However, this economy can only be attained with the right skilled workers to get the job done. Companies face many struggles to fill open positions and adjust to the speed of the clean energy transition.
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