Energy Industry Job Market Is Growing Fast, but Finding Workers Is Challenging

The energy workforce added nearly 300,000 jobs in 2022, increasing to more than 8.1 million total jobs at the end of the year, according to the Department of Energy’s (DOE’s) 2023 U.S. Energy and Employment Report (USEER). While the 2024 USEER won’t be released until later this summer, it is likely to show hundreds of thousands more jobs added to the energy workforce in 2023, continuing a trend of above-average growth that’s been going on for years.

The energy sector was one of the nation’s fastest-growing job markets from 2015 to 2019, averaging an annual growth rate of about 3.0% — double the 1.5% job growth experienced in the U.S. economy as a whole. Although COVID-19 and its associated economic fallout deeply impacted employment, the 2023 USEER says the energy sector had recovered about 71% of the jobs lost due to the pandemic by the end of 2022. Furthermore, employers across all energy-related technologies reported that they expected growth from 2022 to 2023, ranging from 1.6% in fuels to 6.4% in energy efficiency.

Qualified Workers Hard to Find

Much of the growth has resulted from investments spurred by federal legislation, such as the Bipartisan Infrastructure Law and Inflation Reduction Act. However, when asked about their experience “finding qualified workers,” more than four out of five employers across energy technologies reported at least “some difficulty,” with 29% of union and 48% of non-union firms reporting that it was “very difficult” to find workers. This difference was especially pronounced in the construction industry, where 31% of union construction employers reported that it was “very difficult” to find workers, compared to almost double the percentage (59%) of non-union employers.

Burns & McDonnell, an employee-owned full-service engineering, procurement, and construction (EPC) firm, told POWER it expects labor availability to remain tight all year. The main reason is the amount of work it has forecasted in 2024. The firm expects 145 “mega projects” in North America this year.

“We’re focused on developing great career pathways, through our training programs and apprenticeships, to help provide more certainty to the workforce,” said Scott Strawn, vice president and general manager of the Power Group at Burns & McDonnell.

When labor is tight, planning for and staffing construction projects becomes more difficult. “We spend a lot of time partnering with our clients early in the process, allowing for more time to mitigate risks and staff projects appropriately,” Strawn said. “Doing so allows us to identify the critical paths early in the project development and work together to achieve their goals. Early pre-construction planning that focuses on constructability, schedule optimization, and advanced work packaging helps us position ourselves for success on an EPC project. Lastly, open communication between us and our clients and partners are pivotal to the project’s success.”

Strawn continued: “One way to reduce the number of craft in the field is to take certain activities out of the field and into our shop environment, where we can prefabricate spools and skids in a controlled environment instead of in the field. By working under an integrated EPC model, we’re able to involve permitting, engineering, construction, and fabrication groups from the start, allowing us to own the critical path and deliver projects on time. And by doing so, you can reduce the number of people needed onsite.”

A Younger-Than-Average Workforce

For what seems like decades, the power industry has been lamenting its aging workforce. Surprisingly, last year’s USEER says the energy workforce is now younger than the national workforce average. “Only 17% of the energy workforce is older than 55, compared to 24% in the national workforce. In fact, 30% of the energy workforce is under 30 years old—much more than the national average (22%),” it says.

Military veterans made up 9% of the U.S. energy workforce, according to the USEER, which is higher than their representation in the overall U.S. economy (5%), but women, black or African American workers, and Hispanic or Latino workers were underrepresented across the energy workforce. Yet, progress is being made. The report says women filled more than half of the 300,000 net energy jobs added in 2022. It also noted that formal diversity, equity, inclusion, and access plans are encouraging the hiring and retention of a more diverse workforce, especially within the ranks of union employers.

Meanwhile, companies are being proactive in their efforts to fill gaps. “With the historic push for large critical infrastructure projects in the U.S., we need skilled men and women in the construction trades,” Leslie Duke, chair and CEO of Burns & McDonnell, told POWER. “There are already more projects than we have people to do the work. At Burns & McDonnell, we are working in new ways to nurture the next generation of talent.”

Duke continued: “We recently partnered with The Builders, a Kansas City chapter of the Associated General Contractors, to create the Career Development and Exploration Center, focused on educating and training workers to meet future demands. We also opened a Student Success Center at Kansas State University to serve as an innovation hub for students pursuing careers in engineering, architecture, construction, and related fields.”

Educational capabilities are also being expanded at other institutions. For example, Bismarck State College (BSC), North Dakota’s only polytechnic designated institution, expanded its Energy academic division last year to include energy programs plus additional, high-demand career pathway programs in automation and other advanced technologies. Notably, in BSC’s most-recent “First Destination Report,” which provides employment data related to school programs, none of the 240 Energy program graduates that responded to the survey reported being unemployed and only 10 respondents reported being employed outside of their field of study.

—Aaron Larson is POWER’s executive editor.