Energy Sector Employment Has Recovered Strongly, After a Turbulent Few Years In Global Labour Markets
Energy employment is set to shift rapidly as countries and companies accelerate efforts to decarbonise and meet net zero emissions pledges. To date, there is no global benchmark dataset for employment across the energy sector. This report aims to provide this baseline by sector, region, and value chain segment. These estimates were calibrated against more than 15 000 data points on employment and wages gathered from national labour accounts, company reports, in-country experts, international databases and academic literature. The end product is a first-of-its-kind assessment of global energy employment, which can serve as a foundation for policy makers and companies to understand the labour-related opportunities and challenges of an evolving global energy sector.
The energy sector employed over 65 million people in 2019, equivalent to around 2% of global employment. These jobs are roughly equally distributed across fuel supply (21 million), in the power sector (20 million), and in end uses (24 million) such as energy efficiency and vehicle manufacturing.
At the onset of the Covid-19 pandemic, layoffs were common across geographies, especially in oil and gas supply. Yet, energy employment exceeds pre-pandemic levels today thanks to resilient growth in clean energy. Fossil fuel employment, however, is only set to return to pre-pandemic levels this year. Hiring gaps and tight labour markets have contributed to supply chain disruptions and project delays in many parts of the energy sector, notably offshore wind, oil and gas, and energy efficiency retrofits. Today’s global energy crisis could prompt governments and industry to rethink their global supply chain exposures especially vis-à-vis dependence on Russia’s fossil fuels. This may portend another few years of larger-than-normal shifts in energy employment.
Clean energy employs over 50% of total energy workers, owing to the substantial growth of new projects coming online. Most regions have surpassed this threshold already, though the Middle East and Russia are notable exceptions. Many clean energy segments rival the workforce in conventional energy segments. Low-carbon power generation, mainly solar and wind, employs 7.8 million, on par with oil supply. Vehicle manufacturing employment, which stands at 13.6 million globally, already employs 10% of its workforce in the manufacture of EVs, their components and batteries.
Over half of energy employment is in the Asia Pacific region. Rapid energy infrastructure expansion in Asia Pacific is outpacing other regions, and lower-cost labour is enabling the emergence of significant clean energy manufacturing hubs that supply projects worldwide, notably for solar, electric and hybrid vehicles, and batteries. China alone accounts for almost 30% of the global energy workforce. However, established energy companies in North America and Europe maintain global market strength and anchor a sizeable employment base working on domestic and overseas projects, as is the case in oil and gas, wind, and vehicle engineering.
The construction of new projects, including the manufacture of their components, is the largest driver of energy employment across the value chain. Over 60% of the workforce is employed to develop new projects, including building power plants, bringing oil wells online and laying pipelines, manufacturing cars, carrying out efficiency retrofits and installing high-efficiency electric heat pumps.
The energy sector requires higher-skilled workers than other industries. Around 45% of energy workers today are in high-skilled occupations, compared to only one-quarter across the economy. This share is even higher for jobs in research and development for new energy innovations, many of which are set to grow rapidly to 2030. Strategic planning can ensure that scaling is not hampered by a shortage of skilled workers. Establishing market strength in these segments relies on new training and certification, and can be a focus for industry along with ministries of energy, labour, and education.
Workers in coal and other fossil fuels have many of the skills needed to fill positions in growing clean energy sectors. Fossil fuels employ almost 32 million globally today. Some companies are transferring their workers to low-carbon segments internally to retain talent, and allow for flexibility to shift workers between different business segments as needs arise. However, this is not an option everywhere, and ensuring a just transition for affected workers is a growing focus for policy makers in many regions, especially for coal, which has already seen consistent declines since 2015.