Trade winds
November 26, 2008
When times are tough, governments like nothing better than to announce the creation of new jobs.
A statement this summer by the Department for Business, Enterprise and Regulatory Reform – that its target of generating 15 per cent of the UK's energy from renewable sources by 2020 would, if met, create 160,000 "green-collar" jobs – was a brief starburst in an otherwise dark sky. "We are opening a new chapter in Britain's history as a nation of enterprise and innovation, moving from the old, carbon-intensive economy of the industrial revolution to the new low-carbon technologies of the 21st century," said John Hutton, the then business secretary.
The subsequent credit crisis slowed down some of the finance heading for the renewable energy industry. But the government's stated commitment to the sector's growth suggests that demand for suitably skilled staff may hold up during a recession. Whether that demand can be met is another question. The danger is that Hutton's marvellous vision of a new era will remain just that unless the familiar stumbling block of skills shortages can be overcome.
It's true that several companies have increased the number of employees working on low- or zero-carbon energy in recent years. They include Converteam, a diversified engineering company (formerly part of Alstom), with a UK workforce of about 1,500. Among other things, the company makes power convertors, which are needed for wind turbines and other types of machinery. It employs 100 production-line staff in the renewable energy side of the business at its plants in Rugby and Kidsgrove. But, with this now one of its major growth areas, Converteam has vacancies for an extra 200 employees.
Similarly, Siemens' UK power generation division has developed a major wind power business with a workforce of 200, which it plans to double by 2010. The company installs and maintains turbines imported from Denmark, a key manufacturing centre for this industry. It also operates a small and specialised research and development division dedicated to the sector.
Other companies looking to increase their investment include Rolls-Royce; Clipper Windpower, a US wind turbine producer that is setting up a new facility in the north-east of England; and Vestas, a Danish wind turbine manufacturer employing 150 people on the Isle of Wight. Big oil companies and utilities also have staff working on clean and efficient energy, while automotive manufacturers such as Nissan and Ford are working on improved fuel efficiency and alternative technology requirements.
Although investment in renewables has been affected to some extent by the credit crisis, the sector's workforce continues to grow. In May recruitment consultancy Acre Resources said that the number of jobs related to climate change had tripled in the past year and that the environmental sector had grown by 20 per cent over the same period. Official figures show that energy, mining and water supply accounted for the largest area of growth in manufacturing employment in the quarter to June 2008.
But a research report published in April by executive search and selection company Heidrick & Struggles concluded that, although the opportunities were massive, HR issues were a barrier to development.
"Business leaders regard the recruitment issue facing the [clean energy] sector as a serious challenge," the report stated. "Some 37 per cent of respondents said they saw the recruitment challenge as ‘very serious', and a further 59 per cent described it as ‘moderately serious'. Senior managers said that finding executives to drive the growth of their businesses was a key challenge for the next 12 to 18 months."
John Westwood, chairman of engineering consultancy Douglas Westwood, says the greatest problem is the lack of experienced staff at a time when the baby-boomers are reaching retirement. A second problem he highlights is the poor image of engineering among UK students, while a third is the lack of skilled non-graduate technicians.
One solution could be to transfer people from other sectors, although that presents its own challenges. "Most engineers today are leaving college with more specialist skills than 20 years ago," says John Hill, Converteam's renewable energy business manager. "It would almost certainly take them a year to be productive in our field. They can be retrained, but there is a delay."
Converteam headhunts people and recruits from other industries, attending employment fairs after the closure of Rover's Longbridge car plant, for example. "People are often excited by the idea of making bigger and more complicated things that require higher levels of skills. We draw them in that way," Hill says.
Siemens Renewables, which is building a training centre in Newcastle-upon-Tyne, estimates that retraining people from other industries will take about six months per employee. An alternative is to recruit people from abroad. Converteam hires overseas graduates from UK universities and sponsors courses and postgraduate study. It has also helped to create a "power academy" in the new East Warwickshire College in Rugby, where company experts will teach. "It's one way to catch technicians before they are tempted to go elsewhere," Hill says.
The richest potential source of relevant skills is the North Sea oil industry, which employs an estimated 30,000 people offshore and about 500,000 in total if onshore and supply-chain jobs are included. "Skills from the oil and gas sectors are transferable to wind power, because the techniques for building and decommissioning oil platforms and working offshore in tough conditions are similar to those for constructing and installing turbines," says Roger Salomone, energy expert at EEF, the manufacturers' organisation. He suggests that the UK, which has previously lagged in wind power manufacturing, could find a niche as a producer of the largest turbines.
Jobs such as building turbines, operating heavy-lift barges and hooking up electrical and mechanical systems call for a wide range of skills. Mechanical, electrical and electronic engineers, metallurgists, maintenance technicians and commercial analysts are among the types of experienced staff that companies need to poach from the oil and gas industries if the UK is to build up a wind power production centre to rival the Danish and German industries that dominate the market.
This is also one of the government's suggestions, but it does not stand up to scrutiny for two reasons. First, it is likely that nearly all skilled employees and new engineering graduates will continue to be hired by the global oil and gas sector, which can offer better pay and benefits than the renewable energy industry. Second, the rise of wind power, coinciding as it does with the decline in North Sea oil production, might be expected to yield new batches of skilled people over time were it not for the birth of a massive new industry: the decommissioning of oil rigs, which requires many of the same types of skills. The three industries are to some extent competing for the same employees, and the oil and gas sector probably comes up trumps here as well.
Siemens Renewables manages these problems in several ways. It takes on employees from some of the company's other engineering divisions. It also recruits skilled people from related sectors, such as the aerospace industry and engineering units in the armed services, as well as from overseas.
"We receive applications from people with very good baseline knowledge, whom we have to cross-skill and upskill," says Martin Hottass, the company's learning and development manager. "The main challenge is to ensure that they go through rigorous training programmes so that they are safe, because we have to invest a high amount of effort in health and safety. Their safety record needs to be very good."
Siemens Renewables has also developed a corporate school-visiting scheme known as Generation 21, which aims to kindle young people's interest in renewable energy.
"The answer to the shortage is the attractiveness of the wind power industry; we'll be able to attract people from elsewhere because of that," says Hottass, although he suggests that there's still work to be done to capture the imagination of school-leavers.
He sees some grounds for optimism. "Applications for apprenticeships have gone up. But the development of apprenticeship schemes for wind power specifically might also be needed," Hottass says.
Pro Enviro, a skills consultancy that has advised the government, has called for more funding for training that leads to the relevant NVQs, especially the level 3 and 4 qualifications that can lead to degree-level studies. It would like to see more agreements among sector skills councils, training providers and employers. The consultancy also recommends the creation of a skills academy for sustainability or environmental business.
It remains to be seen whether a cash-strapped government is able to take these recommendations forward. But some improvements are already in the pipeline. In an effort to develop clean energy through a renewable energy deployment office, the government has pledged to develop skills by concentrating more intensively on apprenticeships. In September it promised to create 1,500 new manufacturing apprenticeships in addition to the 9,000 places announced earlier this year, which it says will increase the total number of manufacturing apprenticeships by more than 10 per cent.
New places would be available through a bid-making process, with larger manufacturers invited to create additional apprenticeships both in their own organisations and in their supply chains. At the same time, access to training support would be simplified through stronger links between producers and skills agencies.
But only a concerted long-term effort will convince manufacturers that the employment culture is changing. As Christoph Ehlers, managing director of Siemens Renewables, puts it: "If 160,000 new jobs are to be created, engineering employment needs to be right at the top of the political agenda and the perception of the engineering world needs to be altered. Without that, we won't have enough people in the future."
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