ON Partners, a pure-play retained executive search firm building diverse C-level and board leadership teams, recently published its 2023 Variance Report, calling out executive hiring trends that will reshape 2024. The report highlights how company growth and government investment have been critical contributors to the recent changes within the talent pool for the energy and cleantech sectors. According to ON data, this has resulted in a 111% increase in the last three years of executive hiring in the space.
"Amidst the transformative landscape of the energy, renewables, and cleantech sector, executive compensation has also seen a notable uptick year over year,” said Tim Conti, co-president at ON Partners. “In the last year, we’ve seen a 9% increase in executive compensation in the space. Additionally, our data illustrates it’s one of the fastest growth segments we serve, with an 18% hiring increase in the latter half of 2023 alone. These increases reflect not only the sector's accelerated growth but also the imperative of attracting and retaining top talent to drive innovation and sustainability forward."
According to the latest U.S. Energy Report, the talent strategies in the energy and cleantech sectors have shifted as the industry continues to evolve. This change can be attributed to several factors, which include innovation and technological advancements, the growing industry complexity, the ongoing transition from traditional energy sources to renewable and clean energy, the demand for specialized skills, and increasing emphasis on sustainability. Overall, energy sector jobs increased by 3.8% from 2021 to 2022, and clean energy jobs grew by 3.9%. The changes outpaced overall U.S. employment, which increased by 3.1% in the same period, and both sectors are expected to see continued growth in 2024.
Further validating ONs data, Deloitte’s 2024 Renewable Energy Industry Outlook highlighted the rise of investments in the clean and renewable energy sectors. These investments have increased the need for new job creation from solar, storage, wind, and clean hydrogen projects, specifically within the supply chains. There are currently 3.3. million clean energy jobs, the majority of which are in energy efficiency (68%). Trailing behind energy efficiency are renewable generation (16%), clean vehicles (11%), and storage and grid (5%). These investments come from the Inflation Reduction Act (IRA), the Infrastructure Investment and Jobs Act (IIJA), and the Creating Helpful Incentives to Produce Semiconductors Act. Each investment is expected to drive an extensive amount of job creation in their lifetime, which equates to around 3 million jobs per year.
“The promise of the CHIPS and Science Act has been great, but ultimately slow coming into fruition within the semiconductor leadership market,” said Brad Westveld, partner at ON Partners. “There are signs of talent movement over the last six months and executive hiring trends are on the rise, specifically in technology and operational roles within the sector. Those who are willing to be early hiring adopters will reap big benefits in the talent market.”
Thus far, the first federal grant is expected to go to an American subsidy of BAE Systems, which is a multi-billion-dollar British defense contractor. BAE will be receiving $35 million of the $50 billion fund that is provided by the CHIPS and Science Act of 2022. Additional grants will be announced in 2024, and thus far, President Biden’s $280 billion legislative package has created more than $220 billion in private investment in chip manufacturing. This alone has created 44,000 new jobs, according to the Semiconductor Industry Association.
“Europe has local champions in the semiconductor ecosystem with policymakers and business leaders’ intent on making major bets to create more tech sovereignty,” said Praf Vagh, partner at ON Partners based in London. “With the continued uptick in the energy transition, demand for data centre capacity (mainly from hyperscalers), demand from industrial and automotive segments overlayed with increasing investments in generative AI within enterprises, we will continue to see the need for business leadership roles in this segment. These leaders will need to be even more elastic in managing the mix of geopolitical uncertainty and an oscillating supply chain.”
As 2024 progresses, the talent pool will continue to expand and shift, thus driving new expectations for executive leaders in the space. The market will consistently evolve, creating new possibilities while uncovering new challenges that CEOs and boardrooms must be prepared to solve. ON is strategically developing further predictive analytics to enhance the firm’s ability to forecast future success by creating new proprietary tools and resources. These developments will continue to provide companies within various industries the executive talent intelligence needed to get ahead of the trends and take full advantage of each applicable talent pool.
To learn more about ON’s approach and additional findings within the Variance Report, visit https://onpartners.com/contact-executive-recruitment-agency/.
https://onpartners.com/contact-executive-recruitment-agency/
