Sam Smith, President of EMEA and Global Client Delivery at workforce management firm Magnit, offers expert insights into the workforce challenges the energy industry faces in its pursuit of climate goals and how these can be solved by tapping into the specialised knowledge of contingent workers.
In the race against climate change, organisations are increasingly under pressure to accelerate their decarbonisation efforts and evolve their approach to energy usage. The International Energy Agency’s Net Zero by 2050 roadmap underscores this urgency, highlighting the need for a threefold increase in annual clean energy investments by 2050 to achieve global decarbonisation.
This colossal transformation generates another formidable challenge for the energy industry, needing to fill 14 million new roles while retraining five million existing positions. Should the energy industry wish to stay on track towards forging a sustainable future, it will require a swift adaptation in its recruitment strategy. Increasingly, energy firms are strategically leveraging contingent workers – those hired on a temporary, as-needed basis – rather than permanent staff to rapidly scale operations and stay ahead of climate goals.
Navigating net zero
Two years ago, the IEA published the Net Zero Emissions by 2050 Scenario (NZE), outlining a plan to bring the increase in the global average temperature down to 1.5 degrees above the pre-industrial levels. Described as the “world’s first comprehensive energy roadmap,” NZE aims to provide organisations with a structured plan to reduce dependence on fossil fuels while driving economic growth.
To create these new energy sources, the IEA indicates that traditional firms will have to redirect a large portion of resources and investment towards developing new technology solutions, as well as working towards the push for reclamation, i.e. removing CO2 from the air.
As firms begin to work towards the Net Zero roadmap laid out by the IEA, they can expect to see drastic changes across the entire energy industry pipeline, from extraction to supply chain output. While this opens up a wide breadth of opportunity for the creation of future job roles, the absence of available highly skilled workers in the short term threatens to cause major delays. There are also wider concerns such as the war in Ukraine, an ongoing cost of living crisis, and the rising cost of labour, all of which further puts pressure on energy firms to optimise their spending.
This leaves energy firms facing the difficult challenge of having to remain financially conscious while also delivering on climate goals – which is why many organisations are turning to contingent workers.
Overcoming skills shortages
A significant obstacle for the energy sector is the skills gap that has left many firms short of renewable energy talent. A survey from AECOM found that an overwhelming majority of energy firms (73%) state they are prepared to help suppliers and partners accelerate their adaptation to the green energy transition – but nearly a third (29%) say that they cannot attract the skilled professionals needed to implement their energy transition efforts.
There are ongoing efforts to close the widening green skills gaps through training– but many high-level roles require years of experience. With the pace of energy’s green shift, waiting for the next generation of workers is untenable. Talent is needed immediately, and contingent workers provide a way to integrate skilled workers quickly.
By tapping into the specialised knowledge of contingent workers, energy firms can excel in renewable spaces – even if they currently lack the right talent. For example, as more energy firms transition from resources such as gas to renewable outlets such as hydrogen, specialists will be needed to oversee and guide the process.
Brought in for a fixed period, this specialist contingent worker can then help the firm understand the nuances and policies that come with adopting renewable energy technologies. Workers in roles with faster transitions, such as construction, can receive focused training to upskill. This allows an energy firm to leverage external expertise in the short term without needing a complete workforce overhaul.
Managing Fluctuating Demand
Net zero is the destination, but not every journey will be the same. While one energy firm may reach its energy goals through a quick change of materials sourcing, another may require a complete overhaul of the entire production line. The shift to green energy will see firms adapt and evolve at speed, and this will require a talent management strategy with a great degree of flexibility. Contingent labour can help in this regard. With issues such as the rising energy demand, global economic crises and climate change policies, there can often be large imbalances between supply and demand in the renewable energy sector. Contingent workers can help firms better establish better risk management strategies that allow them to scale their workforce according to the ebbs and flows of the industry.
According to the net zero roadmap, fossil fuels will plummet from supplying 80% of today’s total energy to just over 20% by 2050. However, the inherent unpredictability of many aspects of the renewable energy sector is another hurdle that challenges firms, both financially, and in terms of production output. Sources such as wind energy are variable by nature and in certain conditions, can be shut off and halt production. This causes fluctuating output with surges and lulls that pose a financial risk. The flexibility provided means energy firms can concentrate their full-time staff down to focus on positions that are not dictated by outside forces, and instead can rapidly build upon their staff with a contingent workforce that can be strategically deployed.
Maintaining renewable momentum
The renewable energy transition can be a challenging time for organisations, and it will require a great degree of tactical decision-making should they want to reach the end-goal of net zero by 2050. Contingent workers give firms the best chance of managing against unpredictability and financial constraints, helping firms have a smooth transition to renewable energy without needing to disrupt operations. By utilising contingent workers, energy firms can install a talent strategy that can leverage specialist employees, while also remaining adaptable as they push towards the end-goal of net zero by 2050.
About Author
Sam is an accomplished transformation leader and is responsible for helping grow Magnit’s presence in EMEA.
She specialises in a range of business functions including programme delivery, global sourcing, change management, managed services, and talent supply chain management. Sam possesses deep domain knowledge in high-volume staffing and has a first-hand understanding of the challenges facing contingent workers. She has over 25 years of experience in helping the world’s leading brands reimagine their contingent workforce management programs.
