The world is transitioning to green energy, and the future is bright!
Today, renewables make up 20% of electricity generation in the U.S. By 2030, that number is expected to rise to 35%. ‘New green energy giants’ such as NextEra, Enel, and Iberdrola have seen their earnings spike 15-20% in the past two years and 200% in 10 years. The demand for green talent is also rising – from 9.6% in 2015 to 13.3% in 2021.
The flourishing ESG (Environmental Sustainability Goals) movement, combined with massive government stimulus and private equity investment, further fuels the Green Transition. But is there enough highly skilled talent looking for greener pastures?
“While job postings requiring green skills grew 8% annually over the past five years, the share of green talent has grown roughly 6% annually in the same period. This is a significant missed opportunity for the planet and workers,” notes LinkedIn’s groundbreaking 2022 Green Economy Report.
There is a war for talent in the green transition, and it’s here to stay. In this article, I explore challenges and critical strategies to attract the people needed to sustain the green boom. Let’s kick things off with more details on the green transition.
More Significant than the Industrial Revolution?
We are in the first stages of the green revolution. Today, 3.6% of car sales are electric vehicles, yet automotive executives think that number will rev up to 50% by 2030, according to KPMG.
Clean and green is in and getting bigger by epic proportions.
“This is the largest market the world has ever been staring at: the energy transition market,” said Special Presidential Envoy for Climate John Kerry earlier this year at a CEO summit.
“Every aspect of life can be impacted positively… We have to embrace this transition which will, in the end, I guarantee you, be larger than the Industrial Revolution was.”
Technology Gap = Talent Gap
The green transition is intertwined with the digital revolution. High-tech know-how is pivotal for green companies to blossom. But a technical skills gap is a significant challenge.
“Technological transformation and the energy transition have created a technical skills gap,” notes the 2022 Global Energy Talent Index (GETI) Report. “This is creating an industry-wide war for tech talent.”
Indeed, the demand for leaders and team members at all levels of green organizations is outstripping the supply. Scarce talent also means green companies are competing for the same C-suite candidates. What should green companies do to outshine the competition and attract the best?
Upskilling: Move up, Boost Pay
One of the key solutions to addressing the labor shortage and skills gap in green circles is upskilling – training and developing workers with advanced skills to keep pace with shifting business goals. Not only will this fill vacant roles, but it will enable people to increase their income and advance their careers.
To that end, a massive study of global workers found that after upskilling, workers’ upward mobility translated into significant pay raises. “Forty to 50% of the role moves observed in the decade involved pay increases,” the McKinsey study revealed. “The workers who made these moves managed to boost their earnings by 30 to 45% each time.”
Gaining enhanced green and technical skills will ultimately empower people to compete for the best jobs with the highest pay. That’s why green energy companies should offer employees diverse talent development programs.
“In-house talent development is not only a matter of retraining but also of retaining the workforce. Modern workers value personal progression very highly, and companies need to give them every opportunity to grow,” notes Janette Marx, CEO of Airswift, which co-commissioned the GETI survey.
Flexible Cultures are Powerful
In my executive search practice, I have seen candidates shoot down opportunities straight away when they are not remote or hybrid. Flexible cultures are now a permanent feature of the working world. This applies to all segments of the labor force, from Baby Boomers to Gen Z. I strongly encourage green businesses to embed flexibility in their cultures.
One of my clients lives in New York for a company with a head office in Maryland. He had no desire to move, so the organization agreed to let him work remotely and make the trip south only when in-person engagements were necessary. Luring top talent in today’s tight market demands businesses provide their teams with the digital tools needed to flourish.
For example, Teams, Slack, Blink, and Zoom all ease virtual one-on-one connections that allow people to be productive and collaborative, whether in a Starbucks, on a park bench, or at home. PwC’s recent Remote Working Survey found that 79% of employees highlight the importance of flexibility to manage family matters alongside work. So, when team members have appointments, kid drop-offs, and the like, leadership must set a cultural tone that the business embraces the freedom and flexibility to incorporate outside responsibilities into the workday.
Money Matters… Pay Talent Accordingly
The confluence of sky-high inflation, labor crunch, and a hot sector with deep pockets means top talent in the green energy industry is commanding higher pay to play. Marx notes, “The industry is on an upward trajectory, and we anticipate a corresponding rise in wages.” Research illustrates companies are paying cash. Research illustrates companies are ponying up the cash.
According to the GETI report about renewables, “40% of professionals report a pay rise this year…while hiring managers offer an (even) more positive picture with 54% reporting pay increases.” A fulsome compensation package, including benefits, float days, 401(k) matching, etc., can be a significant differentiator and key to attracting top talent.
While the green transition booms and green energy firms are ‘hiring on all cylinders,’ the marketplace is ultimately driven by talent; companies must compete to get the best. Making upskilling opportunities readily available can set you apart from the competition. The same goes for differentiating your culture as extraordinarily flexible, providing generous compensation, and offering substantive career development.
I believe heeding some of the advice here and branding your firm as ‘the company‘ people want to work for will help bring you the best talent and showcase the green space as a light unto other sectors.