IEA: Why 60% of Energy Companies face Labour Shortages

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

This growth rate is almost double the average for the wider global economy.

The IEA's World Energy Employment 2025 report tracks employment trends and skilled labour shortages across the sector.

The report is the fourth edition in the IEA’s series and analyses the evolution of skilled labour requirements since the inaugural report in 2022.

Its data is compiled from the Energy Employment Survey which gathers insights from more than 700 energy companies, trade unions and educational bodies.

The analysis reveals the energy sector has added more than 1.6 million skilled trade positions since 2015.

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 significant 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 and changing employment patterns

The electricity sector has experienced a significant expansion, adding 3.9 million jobs since 2020.

This accounts for nearly three quarters of all new employment in the energy industry.

For the first time, the electricity sector, which includes generation, transmission, distribution and storage, is now the largest energy employer, surpassing fuel supply.

This global move towards electrification is reshaping the nature of employment.

The report highlights continued growth in vehicle manufacturing employment caused by a rise of almost 800,000 jobs related to electric vehicles (EVs) in 2024.

In China for example, the IEA found that nearly 40% of all vehicle manufacturing roles are now associated with EVs and their batteries.

This expansion is accommodated by workers retraining and transitioning into new roles, as well as the creation of new positions in areas such as battery manufacturing and electric equipment installation.

Supply and demand for a skilled workforce

The World Energy Employment report indicates that hiring bottlenecks present a critical challenge, with more than half of the firms and unions surveyed reporting them.

Shortages are particularly pronounced in applied technical roles, which constitute more than half of the energy workforce.

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

A nation's capacity to ensure energy security, expand its grids, scale up clean energy or attract investment could depend on having a sufficiently skilled workforce.

The survey found that approximately 60% of companies reported labour shortages.

The report does suggest that retraining and reskilling existing energy workers could help to address some of these gaps.

According to the IEA, around two thirds of workers in oil and gas supply possess the foundational skills necessary to transition into other energy fields.

Policy and industry responses to skill gaps

Barriers to entry for energy-related training include training costs, lost wages and a low awareness of available programmes, according to the IEA’s survey.

Policy adjustments can be instrumental in attracting more workers into the required education and training pathways.

The most effective policy measures identified include financial incentives, apprenticeships and campaigns designed to promote vocational careers in the energy sector.

Energy companies are also taking direct action to address these skill gaps by engaging with educational institutions.

This includes sponsoring students or providing specialised training for specific roles.

The report also identifies competitive wages as a key element in retaining skilled workers.

The oil, gas and nuclear industries currently offer the highest wages in the energy sector, which could reflect higher skill requirements with energy-specialised roles commanding more competitive pay.