The US Inflation Reduction Act is Driving the Green Skills Revolution05 Jan, 20246 min
In August 2022, a landmark shift occurred in the American economic and environmental landscape. President Joe Biden enacted the Inflation Reduction Act, ushering in an era focused on developing a carbon-free economy, advancing renewable energy, championing sustainability, and driving green skills. This legislation isn't just an environmental milestone; it's a catalyst for profound economic growth and a seismic shift in the talent market.
Much of the focus on the Inflation Reduction Act is the impact it will have on the fight against climate change. The act is crucial to championing clean energy sources, driving a carbon-free economy, and fostering sustainability. The Inflation Reduction Act is expected to significantly impact reducing carbon emissions, with estimates predicting it will cut economy-wide emissions by between 43% and 48% by 2030.
The act represents the largest investment in reducing carbon pollution in US history and will play a crucial role in promoting economic growth while addressing environmental concerns. It provides tax incentives for areas such as solar, wind, and hydrogen, as well as the production of electric vehicles and the development of battery supply chains, all essential for accelerating the transition to a carbon-free economy and promoting new clean energy usage.
With substantial investments, tax relief, and grants funnelled into green industries, the Inflation Reduction Act is set to create an unprecedented surge in demand for Green Skills. These skills, currently scarce, in high demand, or geographically dispersed, are now at the forefront of strategic talent acquisition.
This act creates critical challenges for HR, Talent Leaders, and CHROs. It's a story of growth, investment, and the urgent need for reskilling, starkly contrasting broader economic outlooks. As the Inflation Reduction Act pumps money into the economy, the race is on to build a workforce capable of supporting a rapidly evolving, clean energy landscape.
In this article, we will explore the following topics:
- What has the Inflation Reduction Act promised so far?
- The growing global shortage of renewable energy professionals
- The ‘War for Talent’ and developing an effective talent acquisition strategy
- How Armstrong Craven is supporting the drive for Green Skills
What has the Inflation Reduction Act Promised so far?
Since the act's signing, 272 new clean energy projects have been announced, totalling $278 billion in new investments. These projects have created more than 170,000 jobs across towns and cities in the US. Many the act as of the key climate measures of the Inflation Reduction Act include:
Reducing emissions by 40% from 2005 levels by 2030.
The promise of $370 billion in tax credits for the renewable energy sector to support the creation of over 9 million jobs over the next decade.
Allocating $27 billion to establish the first-ever national 'green bank' to support clean energy projects, especially in disadvantaged communities.
Committing $30 billion over ten years for wind turbines, solar panels, batteries, and geothermal plants, replacing short-term solar and wind credits.
Allocating $20 billion to cut emissions from the agriculture sector.
Providing $10 billion in investment tax credits for electric vehicles and renewables technology manufacturing facilities.
Enhancing storage and carbon capture tax credits.
States across the U.S. are already benefiting from the Inflation Reduction Act, and ongoing investments are generating new jobs and improving lives in communities nationwide. According to research by Climate Power, the top five states and their associated projects are as follows:
Michigan - Michigan is the frontrunner in the US clean energy boom, with 24 projects announced since 2022. It has gained $21.03 billion in investment and helped create over 15,800 new jobs in the state.
Georgia - Georgia has had 22 projects announced since the launch of the Inflation Reduction Act and gained $18.83 billion in investment. This has helped create over 16,600 jobs.
South Carolina - The state has 20 new projects announced since 2022, and investments have reached $11.7 billion. The Inflation Reduction Act has helped create over 13,500 jobs in the area.
California - California has had 16 new clean energy projects announced since 2022. It has already gained $11.9 billion in investment and has helped to create around 5,300 clean energy jobs within the state.
Texas - In fifth place on our list is Texas, with 14 projects announced since the signing of the Inflation Reduction Act. There have been over $11.2 billion worth of investment, and it has created over 8,800 jobs.
The Inflation Reduction Act is immensely important and has set a marker for global action for making a major impact in the battle against climate change whilst growing the economy and improving the lives of the population. However, for the Inflation Reduction Act to succeed long into the future, it needs to overcome an immediate and significant hurdle - talent shortages.
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Addressing Talent Shortages in the Race for the Clean Energy Transition
As discussed in our previous section, the Inflation Reduction Act can potentially create millions of jobs over the next decade. However, with more companies entering the renewable energy market and more and more projects being announced, the industry needs to respond and develop an effective talent acquisition strategy to meet this demand.
Away from the Inflation Reduction Act, the talent shortages are not just present in the US but are felt globally. The International Renewable Energy Agency (IRENA) has revealed that renewable energy jobs reached 12.7 million globally. However, for government and international environment targets to be reached, such as net zero, these total jobs could rise to over 38 million by 2030 and a huge 43 million by 2050, highlighting the scale of the seismic shift in talent demands.
McKinsey has also predicted that by 2030, there will be a need for skilled workers, including electricians and engineers, to construct future solar and wind projects. A further 1.3 million individuals will be needed for 'white-collar' managerial and leadership roles, and 1.7 million will be needed for operations and maintenance.
With the US promising massive investment in renewable energy through the Inflation Reduction Act and governments across the world setting ambitious environmental targets, the signs are positive that action is being taken to combat climate change. However, with such a scarcity of talent available in the renewable sector, are our environmental ambitions set to fail?
Not necessarily, however, the size of the talent pool needed to fill these roles will need a global collective from governments and businesses, with TA and HR leaders playing a vital role in the identification and attraction of the right talent.
How Armstrong Craven is Supporting the Drive for Green Skills
As the global landscape pivots towards a sustainable, carbon-free future, underscored by initiatives like the Inflation Reduction Act, the demand for specialized talent in cleantech and green skills is reaching unprecedented heights. Armstrong Craven is strategically positioned to play a pivotal role in this transition, offering a suite of services tailored to meet the evolving needs of businesses navigating this new era.
In-depth Market Talent Insights
Our talent insight services go beyond the mere identification of potential candidates. We delve into the nuances of the clean tech and green skills market, providing businesses with comprehensive analyses of demographics, talent pool sizes, and the reskilling landscape. This level of insight is critical for companies looking to understand where the talent is and what motivates them, their career drivers, and the behavioral trends shaping their decisions.
For the green skills revolution to succeed, companies must attract significant amounts of talent from different professional backgrounds, nationalities, and cultures to fill their vacancies and skills gaps. Companies must understand how to position themselves as an employer of choice to out-of-sector talent and previously untapped talent pools.
To help address the rising cost of talent and increased demand for specific skills, a multinational renewable energy company engaged our Talent Insights services. Read our case study Discovering Green Skills with Strategic Talent Insights.
Strategic Talent Mapping
The clean energy sector requires a nuanced approach to talent acquisition. Our talent mapping service is designed to pinpoint the specific skills and roles needed to drive innovation and growth in this sector. We identify where these skills are currently being utilized, who employs them and in what concentrations across the globe – often in sectors that businesses may not have considered before, to enable fast and accurate candidate sourcing and engagement.
It is not just the renewable energy industry where companies need to quickly find talent with specific skill sets across different locations, industries, and levels of seniority. Discover how Armstrong Craven undertook comprehensive talent mapping across 11 global markets to assist our client in swiftly acquiring essential talent for a series of significant oncology product launches.
Proactive Candidate Engagement
In a market where competition for talent is fierce and fast growth is imperative, having access to the right candidates at the right time is crucial. At Armstrong Craven, we provide a number of flexible services to help you connect directly with the Green Skills talent you require, with an approach tailored to your specific needs and capacity…
If you have a critical leadership role to hire, our Deconstructed Search approach allows you to break down a search to deliver one or more of the distinct stages in a way that best fits your needs and capacity.A traditional search company will charge a fee based on the total package and payable in three parts with a cancellation clause built in. We believe that our fee should reflect the volume and value of our work at each stage and without the threat of cancellation payments. Clients commission only what they need. This approach is particularly valuable if you are searching in unfamiliar markets or for skills you have not had to attract before. Our full-market research approach means you can be sure all relevant talent has been identified and engaged, and the staged way of working means you can alter your approach if you need to respond to market dynamics or if things should change.
To discover more about our deconstructed search, read our insightful guide, Taking a Deconstructed Approach to Executive Search.
Armstrong Craven’s Talent Pipelining services enable you to proactively build pipelines of relevant talent ahead of need. As you look to strengthen your Green Skills talent pool, connecting and building relationships with the talent you need ahead of time means you have constant access to the market and can hire in line with your business strategy.
Talent Pipelining removes the reactive nature of hiring only once a vacancy is created. Armstrong Craven is a specialist in helping clients build and nurture highly skilled and/or diverse talent pipelines. It is a highly cost-effective approach to hiring as you only pay for the pipeline, not individual placement fees. Read our case study on how we helped a business to hire highly-skilled talent in an unfamiliar location using a talent pipelining approach here.
Embedded Search & Talent Sourcing
When you need to boost your talent acquisition team’s ability to hire at scale and bring fresh perspectives and skills to the forefront, Armstrong Craven can provide an embedded team that will act as an extension of your team. We specialize in finding hard-to-find, hard-to-engage, and in-demand talent using our highly experienced research and talent sourcing teams, most of whom have 10+ years of sourcing experience.
Our expertise in identifying and proactively engaging passive talent across the globe, the talent that doesn’t typically respond to any other traditional method, is unparalleled.
Explore how our Embedded Search & Talent Sourcing service supported a global client to reduce their reliance on traditional executive search, whilst going through transformational change and growth. Read our case study here.
Remember the War for Talent? Get Ready - it's Back!
Don’t let talent gaps slow your progress. Contact us today to explore how we can partner with you to drive your success in the clean energy and sustainability era.