Workforce Challenges in Industrial Energy Transition

Already well underway, industrial energy transition efforts ―I’m not sure if I can avoid some form of pun here― are only heating up across all asset-intensive industries. While these efforts need to continue and substantially expand, it’s also worth noting the workforce impact of this transition. Doing so will help companies, economies, and cultures reckon with how best to mitigate the negatives associated with this tectonic market shift.

We’ve seen these types of challenges with digital transformation, and now we are seeing more instances related to energy transition and industrial sustainability. In fact, the two are related in terms of cause and effect (both positive and negative), as digital transformation is necessary to drive improvements in energy transition and industrial sustainability.

The latest example of the inevitable workforce challenges that come along with energy transition is now, as of today, not breaking news.  Ford Motor announced a large round of layoffs, thousands of workers, earlier this summer These layoffs were announced alongside cutbacks form other companies, many citing volatile economic conditions. Ford, however, noted a very specific reason for the layoffs: a long-term energy transition business strategy shifting away from combustion engines to electric vehicle (EV).  

The Ford announcement is a stark reminder of the full set of realities of energy transition. The workforce impact will be significant across many industrial sectors. Some industries will be hit harder than others, of course. As I’ve mentioned before when discussing digital transformation, which has had a similar impact, the changes that energy transition and industrial sustainability will have on the workforce will be profound. However, the cost of failure isn’t acceptable, so these workforce disruptions, such as the one Ford is going through, are inevitable.

Despite these inevitable negatives that come with any change, energy transition is, of course, both necessary and beneficial. However, beyond these obvious reasons, there is a distinct workforce upside to energy transition and industrial sustainability: it has been, so far, a very human-centric endeavor. Opportunity, including new jobs, technological innovation, and consumer benefits, are central to successful energy transition.

For example, improvements in water reclamation and reuse are necessary for semiconductor manufacturers, whose chips are critical to EV performance as well as solar adoption, as examples. This industrial sector must balance its vast water requirements against rising global demand for water and increase in climate-related water stress. This environmental stewardship can’t be delivered without technological innovation and the new and necessary workforce competencies that go along with it.

In the near term of energy transition, expect a mixed bag when it comes to the workforce. As old ways become less relevant across different industries, jobs will be shed. However, the need for human labor won’t fade. In many instances it will grow. Retraining will be necessary, but so too will the identification and development of yet-to-be-determined skills and work roles.