Winds of change blowing through energy job market
A new report by the International Energy Agency (IEA) on employment trends in the global energy sector has identified encouraging trends, but also highlights areas for improvement.
According to the World Energy Employment report, the global energy employment market outperformed broader labour market trends in 2023, with employment in global energy rising by 3.8%, compared to the economy-wide average of 2.2%.
Whilst most jobs were added in the clean energy sector rather than the fossil fuel sector, there was some disparity across regions. In China, clean energy made up over 90% of energy job growth, while in the Middle East fossil fuels accounted for 80% of growth, and overall global employment in oil and gas is still increasing.
Political attention on this sector often focusses on national energy security and environmental objectives, but governments’ national labour market strategies have much to gain from encouraging this sector’s job producing momentum.
The UK government is leaning into growth in the clean energy market, with clean energy listed as one of its five priorities for government as set out in a “plan for change” launched on 5 December. The government has pledged to deliver 95% clean power by 2030 by “creating hundreds of thousands of good jobs and driving investment into all parts of the UK”.
Job growth has also led to what the report described as intense competition for talent in clean energy sectors, which is prompting firms to “hire aggressively” in anticipation of future growth. The report also pointed to the increase in energy wage levels, which reflects increasing competition for skilled workers.
While wage premiums are sufficient to attract skilled workers from outside the energy sector, they may not always be competitive within the energy sector, the IEA report found. The average worker in the oil and gas sector, for example, earns around 15% more than a worker in clean energy sectors such as wind. Facilitating recruitment into clean energy is an industry and government focus in many countries.
In order to address skill shortages the UK government is working with Offshore Energies UK to support the introduction of energy skills passports to boost the offshore wind labour market. The scheme will help workers and employers easily identify which qualifications and training standards, such as health and safety, are needed for specific roles in offshore wind.
The IEA said the transition to clean energy for workers in the global energy sector should be a “just” one. This is relevant to employers’ Environmental, Social and Governance (ESG) strategies.
Most large employers now have an ESG strategy and they increasingly take workforce issues into account. This means looking at how employer behaviour can maximise positive impacts and minimise negative impacts on directly engaged workers and workers in the supply chain.
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