Driving a Future-Proof, Skills Based Approach for the Renewable Energy Sector

June 21, 2024 10 mins

Driving a Future-Proof, Skills Based Approach for the Renewable Energy Sector

The renewable energy sector is undergoing a sweeping transformation, as it plays a pivotal role in the challenge to achieve global net-zero goals. Attracting, upskilling and retaining talent is critical for sustainability.

Key Takeaways

Developing workforce agility and resilience is crucial for a successful energy transition and must be integrated into the fabric of an organization.
The renewable energy sector must focus on attracting high-potential and diverse candidate pools to address the shortage of key talent.
In order for the sector to effectively tackle the talent and skills gap, a level of standardization and consistency of skills taxonomies is critical to success.

Global renewable power capacity is expected to grow by 2,400 gigawatts from 2022 to 2027, equivalent to China’s current total power capacity.¹ Meanwhile, recent estimates suggest that, by 2030, there will be a global shortage of seven million skilled workers required for climate and energy projects. This green skills gap is especially acute in solar, wind and biofuels technologies — key pillars of the energy transition.² The wind energy workforce in 2024 is 360,000 workers; the forecast is that this number will jump to 550,000 by 2030, a growth of more than 50 percent.³

According to Wind Europe's competitiveness report 2023, the wind industry provided around 300,000 jobs in the EU in 2022. The number of jobs is estimated to grow to 936,000 by 2030.⁴

Challenges for Workforce Resilience

1 Talent Shortages
Currently, there are not enough skilled people to fill these gaps, which leads organizations to look a little more holistically at skills and how to source talent to solve the problem.

2 Rising Human Capital Costs
The inflationary environment has driven up fixed costs exponentially. This has been further compounded by organizations having to pay salary premiums, sign-on bonuses and other perks to hire for skills in the sector.

3 Talent Sustainability
The recruiting landscape is changing due to an aging workforce, robust competition for talent and the shifting of social values. Millennials and Gen Z for instance look for a sense of purpose and emphasize on social impact.

Leading Causes of Skills Shortages in the Renewable Energy Sector

According to recruiters and companies in the industry, primary drivers of the skills shortage include gaps in education, training, and succession planning. The skills shortage challenge is also systemic: organizations feel it would be beneficial to have a large emerging talent pool, and they also believe it would be great if there was a quicker means of reskilling and upskilling people internally without compromising on risk. To ensure the success of high-quality skilling programs, it is crucial to closely examine and address the challenges that can impact their effectiveness.

The renewable energy sector is not alone; unemployment rates are historically low in many countries while future skills needs are rapidly evolving. There is no quick fix, but there is clearly an opportunity to do more succession planning and building the pipeline through programs like apprenticeships and internships.

7M

Recent estimates suggest that, by 2030, there will be a global shortage of seven million skilled workers required for climate and energy projects.

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Leading Causes of Skills Shortage in the Industry

How Is the Renewable Energy Sector Addressing the Skills Gap?

Aon asked HR leaders in the industry how they are dealing with talent and skills shortages with the results detailed below. Most organizations are looking to upskill and reskill their existing workforce, but the visibility of those with innate skills to learn may not always be available.

936k

The wind industry provided around 300,000 jobs in the EU in 2022. The number of jobs is estimated to grow to 936,000 by 2030.

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How the Renewable Energy Sector Is Addressing the Skills Gap

Transferring Skillsets and Diversification for the Wind Energy Sector

"In the wind energy sector, there has been substantial success in labor skilling, upskilling and retention. We see an increase in apprenticeship programs, which are critical for increasing the talent pipeline and maintaining a continual supply of new workers into the business. Simultaneously, substantial efforts are being made to identify and develop the necessary skills, including borrowing expertise from other sectors. Reports and analyses highlight the transfer of skillsets from the oil and gas industry to the wind sector, especially offshore, due to the similar working conditions at sea. Furthermore, projects are being launched to convert coal miners to renewable energy jobs.

At the same time, there is an increasing emphasis on workforce diversification, with a focus on policies that promote diversity, equity and inclusion. The industry faces the challenge of attracting over 200,000 people in the next five years, requiring an inclusive atmosphere where everyone feels they can contribute to the industry and ultimately the green transition. To achieve this, the sector must become a mosaic of diversity, creating a welcoming and supportive environment for all potential employees.”

Mariana Batista, Senior Advisor – Education & Skills, WindEurope

The Growth of Skills-Based Workforce

Organizations are increasingly assessing talent based on skills versus competencies. Competencies are often backwards looking and tend to focus more on what has driven success in the past or carry an assumption of experience. This means we are not preparing the workforce for the needs of now and the future. In addition, companies tend to have many competency models, such as values, behaviors and leadership capabilities, all of which have different terminology. It is often difficult to see the level of overlap between these models and quantify the development needed to get from one level to the next.

A skills-based model overcomes these challenges. First, it creates a common language or framework across the business. This allows the business to understand the level of overlap between different job roles in different business functions and calculate mobility scores. Second, skills can be plugged into learning systems to give workers a key view of what they need to learn in their current role or an aspirational role. Third, skills are evergreen and can be adapted based on market data and insights – so they are representative of the skills required for success today and in the future as roles evolve.

The Changing Role of Potential

Potential is a key aspect of skills-based workforces. This doesn’t necessarily mean the potential to lead, but more the potential to learn, unlearn, adapt and keep up with the constantly changing business landscape. Some may refer to this type of potential as learning mindset, future readiness or agile mindset. Learning is both a capability and a mindset. Those with higher levels of this category of potential will find it more innate to acquire new skills and are more likely to do so proactively, including seeking feedback from others. Those with a lower level of potential may have to work harder to gain new skills or may prioritize other aspects of work outputs over and above keeping their skillset fresh. Although some might measure these traits, the insights can get lost in an abundance of other trait scores. This is why it’s important to measure this capability. More broadly, having visibility into who may be more open and effective at acquiring new skills is a key part of the transformation and building a future-ready workforce.

Potential is a key aspect of skills-based workforces – not the potential to lead, but more the potential to learn, unlearn, adapt, and keep up with constantly changing learning and business landscape.

Suzanne Courtney

Associate Partner, Talent Solutions, Europe, the Middle East and Africa

Consider at what stage you are on your skills journey:

Stage 1: Foundational

Understand skills and current gaps with market insights through skills benchmarking.
Stage 2: Reactive

Adopt universal skills taxonomy and use standard skills framework.
Stage 3: Proactive

Refine and tailor skills strategy and align upskilling/reskilling.
Stage 4: Advanced

Integrate skills taxonomy with job architecture, skills-based profiling.
Stage 5: Leading

Embed the people strategy to drive talent and skills-based strategies.

The Reality of Transitioning to a Skills-Based Workforce

Many organizations are currently at the first or second stage, where they are starting to embed skills-based learning platforms but may struggle with how to create focused learning journeys. Businesses want to see the return of making a significant investment into skills-based learning management systems. Even those with high levels of learning potential can find it hard to understand what they need to learn.

Using market data and benchmarking is a key ingredient to successfully build a focused skills-based talent framework to underpin your people strategy.

Suzanne Courtney

Associate Partner, Talent Solutions, Europe, the Middle East and Africa

With a structure in place, there is a key decision to be made on what skills to buy, build or borrow. Finally, reskilling key roles in the organization, as well as partnering with firms to effectively roll out reskilling and education or training programs to build capacity and deliver on business goals.

In order to drive success in the renewable energy sector, skills taxonomies need a certain level of consistency and standardization to make hiring, retraining, reskilling and educational programs viable. Currently the challenge is a lack of cohesion across the industry to create a unified model that can support and accelerate learning and development in universities and schools.

The Need for a Cohesive Learning and Development Approach in the Wind Energy Sector

The wind energy industry recognizes the importance of a coordinated learning and development approach. Mariana Batista, Senior Advisor - Education & Skills at WindEurope, adds: "We have health and safety standards through the Global Wind Organisation that are followed around the world. The industry is now working to unify other training that goes beyond health and safety to guarantee that credentials are unified and mutually recognized, allowing for more mobility. Beyond that, we recognize the importance of a consistent approach, so that industry personnel may understand what may be missing from their own training portfolios.“

Building the Foundations with Aon

Create a taxonomy that underpins an agile and resilient workforce that is market-referenced, aligned to an existing (or newly created) job architecture and drives workforce planning and internal mobility.

Benchmarking

Assess the current workforce to understand what skills are in the organization and where they sit.
Skills Taxonomy Design

Understand the skills required now and skills needed to drive future business strategy. Use this information to create a skills taxonomy, linking and aligning to the job architecture.
Workforce Planning

Determine which skills to buy, build or borrow. Forecast market trends to plan for emerging skill needs.
Reskilling Potential

Reskill in order to fill key roles rather than hiring in the market, develop reward structures. Deploy reskilling and training measurements and initiatives to build capacity and deliver on business goals.
Rewards

Benchmark relevant roles and skills to drive both competitive and fair pay/renumeration structures.

Our teams of industry and subject matter experts work together seamlessly to deliver integrated solutions, including dedicated verticals within the Risk and Human Capital practices providing specialized client advisory services.

¹ https://www.iea.org/news/renewable-power-s-growth-isbeing-turbocharged-as-countries-seek-to-strengthen-energysecurity
² https://www.bcg.com/publications/2023/will-a-green-skills-gap-put-climate-goals-at-risk
³ 2030 Wind Energy Job Projections, WindEurope, October 2023
⁴ EU wind energy - European Commission (europa.eu)
⁵ https://www.aon.com/industry-insights/revisiting-the-future-of-risk-energy.aspx

Aon’s Thought Leaders

Chris Tyler

Energy and Commodities Trading Data Leader, Europe, the Middle East and Africa
Suzanne Courtney

Associate Partner, Talent Solutions, Europe, the Middle East and Africa

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