Should Businesses be Concerned About the Green Skills Gap?

A substantial investment in energy infrastructure during 2024 has fuelled a 2.2% increase in energy-related employment, according to the International Energy Agency (IEA). 

This rate of job creation is almost double the average employment growth seen in the wider global economy, highlighting the sector's role as a major source of new jobs.

The findings come from the IEA’s World Energy Employment 2025 report, the fourth in its series analysing employment trends and skilled labour requirements. 

The report is built on data from the IEA’s Energy Employment Survey, which gathers insights from over 700 energy firms, trade unions and educational bodies. 

Since 2015 the energy sector has successfully added more than 1.6 million skilled trade worker positions.

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.”

Electrification reshapes the workforce

The global transition toward electrification is fundamentally altering employment landscapes within the energy sector. 

Since 2020 the electricity sector alone has seen employment grow by 3.9 million roles, which accounts for nearly three-quarters of all new energy jobs. 

This expansion has positioned the electricity sector as the largest energy employer for the first time, surpassing fuel supply. These roles span generation, transmission, distribution and storage.

This growth is particularly evident in vehicle manufacturing, where the rise of electric vehicles (EVs) has led to the creation of almost 800,000 new jobs in 2024.

According to the IEA’s findings, in China nearly 40% of all vehicle manufacturing employment is now linked to EVs and their associated batteries. 

This industry transformation is being met by a combination of retraining existing workers and creating new roles in fields like battery manufacturing and electric equipment installation.

Navigating skilled worker shortages

Despite the positive job growth, the report reveals a critical challenge facing the industry: a significant shortage of skilled labour. 

More than half of the firms and unions surveyed reported experiencing critical hiring bottlenecks. These shortages are most acute in applied technical roles, which constitute more than half of the total energy workforce.

The roles in shortest supply include electricians, pipefitters, electrical power-line workers and engineers. 

The IEA states that a nation's capacity to ensure energy security, expand its grids or attract investment is contingent on having a proficient workforce. The survey found that approximately 60% of companies are currently grappling with labour shortages. 

The report does suggest that retraining and reskilling existing energy workers could help address some of these gaps, noting that around two-thirds of oil and gas supply workers possess the foundational skills to transition into other energy sub-sectors.

Policy and strategic industry response

Addressing the skills gap requires a multi-faceted approach involving government policy and direct corporate action. 

The IEA’s survey identifies training costs, lost wages and a low awareness of available programmes as the primary barriers preventing workers from entering energy-related training. 

Effective policy responses could include financial incentives, apprenticeships and campaigns designed to promote vocational careers in the energy sector.

Energy firms are also taking proactive steps by engaging directly with educational institutions to develop talent pipelines. 

These initiatives include sponsoring students and providing specialised training for in-demand roles. 

Furthermore the report highlights that competitive wages are a crucial factor for retaining skilled workers. The oil, gas and nuclear fields currently offer the highest remuneration in the energy sector, a reflection of their higher skill requirements with energy-specialised roles commanding more competitive pay.