Talent shortage threatens growth of clean energy sector

This is the message of a study of top-level recruitment in the clean energy sector, produced jointly by New Energy Finance, the leading clean energy investment analysis provider, and Heidrick & Struggles, the 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.

According to Ayman Haddad, Managing Partner (Middle East & North Africa) of the global executive research firm Heidrick & Struggles, the issue is rising up the agenda in sub-sectors such as wind and solar energy and bio-fuels, as investment in specialist businesses climbs rapidly.

'While the global clean energy industry faces this serious issue, in the Middle East there is a huge opportunity, simply because the oil and gas sector is the principal training ground for future managers in the clean energy sector,' he said.

'As well as this, with this region's large population of young people, we have a huge pool of future talent, providing there is a focus on education and training to address this need. Indeed, the Middle East has the potential to be the world's talent 'bread basket' in the clean energy sector,' he said.

New Energy Finance figures show that investment in clean energy worldwide in 2007 reached $148.4bn, up 60% on the previous year.

However, the central finding of the research is that business leaders regard the recruitment issue facing the sector as a serious challenge with 37% of respondents saying it is 'very serious', a further 59% describing it as 'moderately serious' and only 4% as 'not serious'.

Senior managers also said that finding executives to drive the growth of their businesses was a key challenge for the next 12-18 months, at least comparable with other concerns such as the availability of projects and assets, capital availability and cost, and government and regulatory support.

Another conclusion was that firms are having to look hard outside their sector for top-level recruits. Just 32% of respondents said that most staff came with significant experience in the clean energy sector.

A larger number (48%) said most recruits came with experience in the traditional energy sector, while 31% 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 global need for entrepreneurial CEOs and chief technical officers with the right experience to drive these innovative clean energy companies is a senior leadership issue on a scale that threatens to hamper growth in this important industry. In turn this will limit the positive impact these companies could have on climate change.'

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.