Why are Major Companies Facing a Green Skills Shortage?

A substantial investment in energy infrastructure during 2024 has spurred a 2.2% increase in energy-related employment, a rate nearly double the average employment growth across the global economy. 

This growth presents both opportunities and substantial challenges for talent leaders navigating a rapidly changing sector. 

According to the International Energy Agency’s (IEA) World Energy Employment 2025 report, which analyses skilled labour needs and shortages, the sector is grappling with critical hiring bottlenecks.

The report, now in its fourth edition, gathers data from over 700 energy firms, trade unions and educators. It details how the energy sector has added more than 1.6 million skilled trade worker jobs since 2015. 

Fatih Birol, Executive Director of the International Energy Agency, says: “Energy has been one of the strongest and most consistent engines of job creation in the global economy during a period marked by major uncertainties. 

“But this momentum cannot be taken for granted. The world’s ability to build the energy infrastructure it needs depends on having enough skilled workers in place. 

“Governments, industry and training institutions must come together to close the labour and skills gap. Left unaddressed, these shortages could slow progress, raise costs and weaken energy security.”

Addressing critical skills gaps

The survey findings highlight a major concern for human resources executives, with more than half of the firms and unions surveyed reporting critical hiring difficulties. 

These shortages are most acute in applied technical roles which constitute over half of the energy workforce. The roles in shortest supply include electricians, pipefitters, electrical power-line workers and engineers. 

According to the IEA, around 60% of companies reported labour shortages, a statistic that highlights the challenge for recruitment and workforce planning departments. The ability to attract investment and maintain energy security is increasingly dependent on having the right talent in place.

The electrification move and talent redeployment

Since 2020, the electricity sector has become the largest energy employer, adding 3.9 million jobs and overtaking fuel supply for the first time. 

This global move towards electrification is fundamentally altering employment needs. In vehicle manufacturing, for instance, the rise of electric vehicles (EVs) led to nearly 800,000 new jobs in 2024. 

The IEA report found that in China, almost 40% of all vehicle manufacturing roles are now linked to EVs and their batteries. 

This growth is being met partly by workers retraining and changing roles to meet industry demands, alongside new roles being created in areas like battery manufacturing. 

The report shows that retraining and reskilling existing energy workers could help fill some of the skilled labour gaps, noting that around two-thirds of oil and gas supply workers possess the foundational skills needed for redeployment into other energy areas.

Strategies for workforce development and retention

The IEA’s survey identifies several barriers to energy-related training, including costs lost wages and low awareness of available programmes. 

This suggests that policy changes could be vital to help attract more workers into the necessary education and training pipelines. From a corporate perspective, the most effective responses have included financial incentives, apprenticeships and campaigns that promote vocational careers in the energy sector. 

Many energy firms are now engaging directly with educational institutions to help address specific skill gaps by sponsoring students or providing targeted training. Ultimately, the report indicates that competitive wages remain a key factor in skilled worker retention. 

The oil, gas and nuclear fields offer the highest pay in the sector, a reflection of higher skill requirements and a strategy for retaining talent in highly specialised and competitive roles.