Talent shortage threatens growth of clean energy sector

RP news wires, Noria Corporation
Tags: talent management

The world’s fast-growing clean energy industry is facing a new obstacle to its further expansion – a shortage of human capital, especially experienced business leaders. This is the message of a study of top-level recruitment in the clean energy sector, produced jointly by New Energy Finance, a clean energy investment analysis provider, and Heidrick & Struggles, an international executive search firm.

The two companies conducted a survey of senior executives in the alternative and renewable energy sector to gauge the seriousness of the “War For Talent” and pinpoint the areas where recruitment difficulties are greatest. The issue is rising up the agenda in sub-sectors such as wind and solar energy and biofuels, as investment in specialist businesses climbs rapidly. New Energy Finance figures show that new investment in clean energy worldwide in 2007 reached $148.4 billion, up 60 percent on the previous year.

The central finding of the research is that business leaders regard the recruitment issue facing the sector as a serious challenge. Some 37 percent of respondents said they saw the recruitment challenge as “very serious”, and a further 59 percent described it as “moderately serious”. Only 4 percent said it was “not 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, at least comparable with other concerns such as the availability of projects and assets, capital availability and cost, and government and regulatory support.

The survey results showed that clean energy firms see three high level posts as particularly challenging to fill. Some 48 percent of respondents said that chief technical officer was one of the most difficult positions to fill, while 46 percent put the post of chief executive officer in this category and 37 percent said recruiting senior project managers was a tough task. Fewer respondents named chief financial officer and chief operating officer as difficult posts to fill. Overall, firms said that the shortage of senior management was even more serious than the shortage of technical skills and scientific talent.

Another conclusion was that firms are having to look hard outside their sector for top-level recruits. Just 32 percent of respondents said that most staff came with significant experience in the clean energy sector. A larger number (48 percent) said most recruits came with experience in the traditional energy sector, while 31 percent said they had significant experience in “other young, high-tech industries”.


Anita Hoffmann, co-head of the alternative and renewable energy practice at Heidrick & Struggles, said: “The particular global need for entrepreneurial CEOs and chief technical officers with the right experience to drive these innovative clean energy companies forward and grow them to a global scale to have real impact on the energy and climate change issues is a senior leadership issue on a sector scale that threatens to hamper the growth of this important industry.”

Michael Liebreich, chairman and chief executive of New Energy Finance, said: “This important research has shown that very rapid growth in investment in clean energy is putting strain on the availability of senior managers with sector experience. There is strong momentum behind the growth of clean energy worldwide, with new investment up nearly fivefold between 2004 and 2007, but this is creating shortages not just of components such as silicon and transport infrastructure such as crane ships for offshore wind, but also of human capital.”

The survey team obtained responses from 75 executives from around the world – “those who make the investment and hiring decisions”. Typically, they were directors of specialist clean energy companies, top managers at clean energy businesses within large corporations, or leaders of investment companies focusing on the sector. The survey also collected a large amount of qualitative feedback from top managers about the “War For Talent” and the challenge of finding entrepreneurial skills to turn young and often technology-oriented clean energy firms into serious industry players.

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