Industry
Energy, Resources & Utilities
Rebalance the energy equation
Highlights
- The EPC (Engineering, Procurement, and Construction) industry struggles to hire and retain talent for complex and large-scale projects.
- Given the unique workforce dynamics, the global talent shortage, and the geo-specific legal and statutory complexities, EPC players need a targeted action plan.
- With the three key imperatives listed in the article, EPC companies can build a tech-savvy workforce in the industry and attract and retain talent for evolving job opportunities.
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Enhancing the future readiness of the EPC workforce
The EPC industry is known for its complex and large-scale projects.
It mainly requires a highly skilled and efficient workforce to deliver results within budget and on time. However, hiring and retaining talent in the industry is a challenge. The EPC market is projected to grow at a CAGR of 3.2% between 2023 and 2028, reaching USD 9.89 trillion by 2028. Economic volatility, rising inflation, increased costs, and extreme labor shortages hinder strong growth.
The workforce dynamics in the EPC sector are complex and unique, given the varied business functions and requirements, and the geo-specific legal and statutory complexities. Skill requirements in the field mainly rely on contractor personnel, needing more consistency throughout the construction lifecycle, leading to data collection and assessment challenges. Furthermore, the global talent shortage intensifies the sector's struggle to attract the best candidates, resulting in inconsistencies in project outcomes and a pressing need for a targeted action plan. The EPC industry needs to act on three key imperatives.
Meeting safety and ESG goals
Given the nature of the business, safety is a primary imperative in the EPC industry
There are approximately 340 million occupational accidents globally, with the construction industry exhibiting a significantly higher rate of recorded incidents. Insufficient training and an aging workforce can further increase this number, impacting growth in the sector and posing risks to lives. This situation also adds to the growing reluctance of millennials to join the industry.
As environmental, social, and governance (ESG) gains prominence, safety becomes critical for both regulatory compliance and future impact. Health, safety, labor, and carbon emissions are key ESG pillars in the construction sector. As workers cross borders, considering cultural, linguistic, and educational backgrounds becomes essential for safety training. Balancing mass pedagogy with personalized approaches is crucial to meet evolving safety requisites in this changing landscape.
Accelerating digitalization
The construction industry is witnessing a significant increase in technology adoption for process efficiency.
Investments in construction technology exceeded $5 billion in 2022. EPC companies struggle to respond to the increasing technology-related requirements specified in RFPs by clients. This has led to a rise in demand for technology partnerships with system integrators (SI) to address these needs.
Some engineering consulting firms are also transitioning into technology consulting to provide domain expertise and market requirements under one roof—however, scaling, talent retention, and technology redundancy present obstacles. Additionally, the shortage of trained personnel for operating new equipment poses a challenge in maintaining utility companies’ transmission and distribution (T&D) networks. This is particularly true for renewable energy sources like solar, wind, geothermal, and tidal. Building digital skills and knowledge in the EPC workforce is, therefore, vital for the industry's future growth.
Sustainability-focused training
Sustainability initiatives are reshaping skill requirements for construction workers.
These are calling for identifying similar skills from other industries and re-training teams. The transition could generate significant job opportunities with a mix of new positions and by re-training the existing workforce. These highly skilled jobs will offer equitable compensation but might require the workforce to move to different location.
Women make up less than 15% of the workforce in the EPC industry today. However, this scenario is set to change as more women enter this traditionally male-dominated field. With education and training frontiers opening for women, they could easily bridge the diversity gap as well as feed into the industry’s labor force.
Another crucial area for the EPC industry to focus on is training for specific skill sets. The sector covers a wide array of skills and filling in each skill area through focused training will address the labor challenges.
A two-pronged approach to reimagining workforce training
EPC companies must ensure skill adequacy for projects and continuously evaluate skill sets and training needs.
First, an advanced real-time predictive HR system is necessary to address talent gaps effectively. Given the fluidity of the workforce and the evolving skill requirements, such a system will help recruiters and HR teams build the talent pipeline. Establishing industry-academia relationships can help with relevant skill sets and tailored pedagogy. Global companies across industries are now aligning with educational institutions and universities to bridge the skills gap and ensure a job-ready workforce.
Second, introducing a fresh outlook to training methods is essential. Technologies like augmented reality, virtual reality (AR and VR), and immersive learning methods allow for quick scalability and intensive learning, while self-paced learning support incentivizes ongoing development. Simulator-based training can also be utilized in jobs where in-person training is expensive or challenging.
With this global shift, the need for trainers, interpreters, language, and cultural bridges becomes crucial for harmonious collaboration. Security requirements and certifications for international jobs are expected to rise but concerns regarding affordability and accessibility should be addressed to avoid unintended inequality. Technology can be vital in evaluating eligibility and attracting talent for these evolving job opportunities.
