Addressing the natural resources skills gap

The natural resources and renewable energy sectors are seeing a boom in new jobs and a significant amount of change. While there are many new firms and innovations in the space, much of this work will reside within (or adjacent to) traditional large scale fossil fuel miners, producers, refiners and distributors (including the largest global organisations).

While this increase in jobs is obviously encouraging from an environmental standpoint, with the world slowly weaning itself off fossil fuels, it presents its own unique challenges. One of the most pressing of these is the growing skills gap in the sector.

According to McKinsey, 1.1 million ‘blue collar’ workers will be required to develop and construct wind and solar projects, with and a further 1.7 million needed for maintenance and operation. On top of that, 1.3 million will be needed to fill ‘white collar’ positions such as leadership, sales, finance and data analytics roles (1). And that’s just for wind and solar.

In addition, LinkedIn’s 2023 Green Skills Report shows that the share of green talent in the workforce rose by 12.3% cent across the 48 countries examined, while the share of job postings requiring at least one green skill grew nearly twice as quickly – by 22.4% (2).

So attracting, training and retaining talent in the natural resources industry is a big challenge.

Workforce challenges in the natural resources industry

• Inflation/costs

Rising costs from inflation and market pressures are putting a strain on natural resources? organizations. This in turn affects organizations’ ability to offer the competitive salaries and benefits required to attract the best talent. Our research suggests that approximately 45% of businesses in the sector are concerned about inflation.

• Skilled labour shortage

There are currently 12.7 million global energy jobs, an increase of more than 5 million since 2012. By 2030, the clean energy transition will generate a further 10.3 million new jobs. According to recruiters and companies in the industry, the primary drivers of the skills shortage include gaps in education, training and succession planning.

“This skills gap means that building a robust talent pipeline requires significant additional investment in recruiting and training”

A heavy reliance on specialist contractors has also led to talent bottlenecks that hold back development. This skills gap means that building a robust talent pipeline requires significant additional investment in recruiting and training.

• Resilience and wellbeing

The energy industry is already struggling with poor workforce resilience. According to research by Aon, it scores the lowest in comparison to all other sectors in the resilience of its workforce resilience – a staggering 15% lower. Future skills readiness, physical and mental health, adaptability and creating value are all areas that also score below other sectors.

If the energy industry in its existing form is struggling with these issues, the need to tackle these challenges as it transitions away from fossil fuels takes on even more urgency.

The challenges listed above come from the findings are from a number of Aon research projects which explored workforce resilience challenges across a range of industry sectors.

Addressing the skills gap

The transition to natural resources also brings unique talent needs of its own (including from emerging fields like AI) and requires competing for talent against high-paying industries in different geographies.

“To meet growth plans, a commitment to building a sustainable and resilient talent strategy must be a leadership priority”

To meet growth plans, a commitment to building a sustainable and resilient talent strategy must be a leadership priority. It will need a commitment from the C-Suite to recognise the challenges and implement the required programmes.

Here are a few suggestions to get started:

• Implement agile recruitment strategies

Maintain a talent pool of potential candidates who have expressed interest in working for your organization, allowing for quicker recruitment during high-demand periods. In addition, create cross-functional, agile hiring teams that can quickly adapt to changing recruitment needs, ensuring a swift and efficient hiring process.

• Utilise technology

AI and data analytics, for example, can streamline the recruitment process, identify suitable candidates, and predict future talent needs. We are seeing an increase in the use of skills and potential in the assessment of new talent with a view to building agile and adaptable teams that meet the needs of today and have the potential to change and grow into new roles in the future. Virtual Reality (VR) and Augmented Reality (AR) technologies can help create immersive training experiences. One of the key needs now is increasing the adoption by leaders and employees to ‘own’ their own career journey.

• Employer branding

Highlight your organization's commitment to sustainability and environmental responsibility to attract like-minded individuals. Encourage employees to share their experiences on social media platforms (a process known as employee advocacy), showcasing the positive aspects of working in the natural resources industry.

• Optimise real-time organizational and talent planning

Identify gaps in your human capital strategy (including DE&I) and develop comprehensive health and benefits packages to attract talent. This includes reskilling, attracting and upskilling talent and pursuing skilled talent acquisition through mergers and acquisitions (M&As).

• Collaborate with industry experts, research organizations and NGOs

This will help you stay updated on the latest trends and innovations, ensuring your workforce is well-informed and skilled. Consider collaborating with universities and technical schools to create specialized renewable energy programs, ensuring a pipeline of skilled graduates.

Specific initiatives that Aon can, and have, helped clients develop include:

• Pathways to resilience, agility and wellbeing

Helping clients understand their people risk and improve the employee experience by creating a comprehensive total rewards program that balances expectations and maximizes the return on wellbeing investments. Given the need for many firms in the sector to balance both fossil fuel and energy transfer businesses in parallel, having tailored/custom plans for different personas may be a good way to start this journey and balance the conflict.

• Rewards, performance and talent assessment

Identifying skills, potential and future talent pools, aligning the people strategy with business objectives, updating job and role architecture, and benchmarking and aligning total rewards to enhance performance and drive growth.

• Diversity, equity, inclusion and belonging

Supporting cultural transformation by diagnosing, measuring and enhancing diversity, inclusion and belonging, and purpose strategy – key areas which are crucially evolving in the industry.

• Mergers and acquisitions

Helping to secure investments, enhancing deal values and ensuring transaction success by addressing diverse financial and human capital challenges throughout the deal lifecycle. This includes M&A target identification, strategy, transaction execution, risk management and post-deal integration.

Conclusion

I think this quote from Maximillian Bromiley, an executive search consultant for renewables, sums it up very well:

“The renewable energy sector stands at a crucial crossroads, and addressing the talent shortage is paramount for sustainable growth. By adopting a global perspective and leveraging comprehensive strategies, we can attract and retain the skilled workforce needed to power the clean energy revolution" (3)

Want to know more? As I always say, my virtual door is always open.

(Please note that links to the references can be seen in the comments section).