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Idea In Brief
Demand for skilled workers in the energy sector is growing
This is leading to heightened competition in an already tight labour pool, with broader implications for other industries and sectors.
Mapping workforce supply and demand is critical
Identifying the specific skills you need, the number of people required, and the timeframe you have in which to get them is crucial first step.
What strategy will your organisation adopt?
The multi-faceted "build, buy, borrow, and bind" framework can help you think about how your organisation can proactively address its workforce challenges.
Australia's net zero ambitions face a major threat: a critical workforce shortage. Energy businesses need a strategic workforce plan to address the growing risks to project delivery and increasing competition to attract and retain talent.
The energy workforce challenge is well-documented
As part of Nous’ ‘Pathways to Net Zero’ series, we noted that the development of new energy infrastructure and supply chains is critically dependent on a strong and adaptable talent pipeline. This general understanding is echoed by multiple studies that highlight the significant scale and urgency of the challenge:
- By 2030, Australia will need an additional 85,000 workers to support the construction, operation, and maintenance of renewable energy infrastructure.
- More than half (51 per cent) of the 85,000 workers needed by 2030 are in occupations already facing national shortages, including electricians, engineers, and plant operators.
- Remarkably, 450,000 jobs will be involved in the construction of clean energy generation and transmission infrastructure by 2030, representing one-third of all jobs growth in Australia.
The workforce challenges created by the net zero transition are not limited to the energy sector. Many asset-intensive industries like mining, transport, and manufacturing will require significant workforce changes as Australia’s production systems decarbonise and transition to net zero, adding to the workforce pressures. This only emphasises the importance of making proactive planning a priority today. It is time to get our skates on.
Energy businesses must grow critical roles alongside new and evolved skillsets
The increasing demand for skilled workers in the energy sector is leading to heightened competition in an already tight labour pool. This situation has broader implications for other industries that rely on similar skill sets, driving skill shortages across a wide range of sectors.
Our recent work with energy network providers has highlighted three common problems that energy executives must grapple with when mapping supply and demand in critical workforce segments:
- Critical roles face unprecedented increases in demand. Modelled on multiple scenarios, Nous analysis underscores a significant uptick in demand across engineering and trades-based occupations, with particular growth in demand for electrical, power flow, control systems, and renewable energy experience. Our recent forecasts for clients have shown that meeting their strategic objectives would require a 100 per cent increase in the number of engineering roles and a 50 per cent increase in the number of skilled tradespeople over the next ten years.
- Established roles will broaden in scope, requiring new skills to meet increasing complexity. The traditionally asset-intensive energy industry is facing rapid integration of digital and cyber technology and reliance on advanced data analytics, fundamentally transforming the skills required across the workforce. Cyber security, digital, and data analytics are the emerging capability areas that face the highest forecast growth in the next ten years.
- Specialist and experienced leadership roles draw from a vanishingly thin pool. Cutting-edge technology creates challenges for the energy industry. With each new phase of development, the pool of specialists with hands-on, decades-long experience grows narrower. Consider the vital role of senior and experienced Grid Integration Engineers, those genuinely equipped to handle the installation and management of innovative grid-forming batteries. These necessary leaders are drawn from an exceptionally small global talent pool. This presents challenges for industries looking to deploy top talent to lead teams.
The Australian energy sector is therefore contending with a complex interplay of pressures: the demand for a larger workforce, the need for new and evolved skillsets, and a shallow pool of specialist leadership. In this context, and amongst significant economy-wide competition, proactive and strategic workforce planning is not just a competitive advantage – it is fundamental to successfully navigating these challenges and delivering the key projects that will deliver on organisations’ long-term vision.
Strategic workforce planning ensures future delivery
A critical first step in preparing for this transition is to develop a clear understanding of your organisation’s workforce supply and demand. This involves identifying the specific skills you need, the number of people required, and the timeframe you have in which to get them. By mapping out your demand profile and comparing it to the current and projected supply of talent, within and outside of your organisation, you can pinpoint potential shortages and skills gaps. This crucial analysis provides the foundation for proactive action.
With a clear understanding of the gaps, organisations can then implement strategies to address them. A common framework for this involves a multi-faceted approach, often described as "build, buy, borrow, and bind":
- Build: Developing internal talent using reskilling programs, apprenticeships, and on-the-job training. In the energy sector, this is key for upskilling and multiskilling tradespeople (e.g. electricians for renewables) and fostering future engineers through graduate programs. It also includes actively growing the external talent pool by engaging with schools, universities, and VET institutions.
- Buy: Recruiting external talent to meet immediate needs. This approach is often used to acquire specialised expertise, such as experienced project managers for large-scale renewable energy projects or cybersecurity specialists who can help protect critical infrastructure.
- Borrow: Leveraging external partners and contractors to access specialised skills or additional capacity. For example, companies might borrow expertise in areas like grid integration or battery management and storage by partnering with specialist firms or engaging contractors for specific projects.
- Bind: Retaining key employees with critical skills through targeted strategies. In a competitive market, this is crucial for retaining experienced engineers, project managers, and other specialists who are vital to the success of energy transition projects.
BUILD One energy distribution business is exploring multi-skilling of trades to mitigate potential shortages and provide a compelling value proposition for its people. | BUY An energy network provider is investing in its employer value proposition (EVP) to build a distinctive and compelling brand in the labour market, increasing its attraction of key talent. |
BORROW A resources client is exploring partnerships with equipment manufacturers to provide battery-as-a-service, removing the need to build this capability internally. | BIND An energy infrastructure business has redefined its purpose and transformed its culture to meet the needs of the energy transition while fostering a compelling environment for its people. |
What’s your strategy?
We have worked with numerous organisations to analyse future supply and demand, and to develop and deliver effective resourcing strategies. Prominent themes for the energy sector include:
- Upskilling and multi-skilling builds workforce flexibility in tight labour markets. For instance, training electricians in instrumentation, or gas fitters for hydrogen work, enhances deployment options and career pathways for existing staff.
- Strategic workforce deployment taps into wider talent pools for project needs. For example, using mobile expert teams for regional renewable projects or offering remote work for suitable digital roles can overcome local skill shortages.
- Equity, diversity, and inclusion strategies expand access to vital new talent. For instance, targeted traineeships for women in trades or Indigenous employment programs supporting local energy projects can broaden the recruitment pipeline.
- Investing in workplace culture improves talent retention and attraction significantly. For example, fostering a safe, inclusive, and purpose-driven environment helps retain critical skills and makes the organisation a preferred employer in the sector.
- Strategic partnerships build future skills and clear career pathways into energy. For example, collaborations between TAFEs, unions, and industry to co-design new energy apprenticeships ensure a relevant future talent supply for the transition to net zero.
Overall, the goal is to align workforce strategies with broader industry needs through multi-faceted approaches involving reskilling, global talent sourcing, strategic partnerships, and fostering diversity and inclusion to ensure a robust response to workforce challenges in the energy sector.
Energy businesses must address tomorrow’s workforce needs today to address what would otherwise be a substantial constraint to their future success.
Get in touch to discuss how your organisation can build and retain a vibrant workforce.
Connect with Anita Sarris and Hamish Stein on LinkedIn.
