Powering the UK 2013
Creating jobs and empowering the UK
A stable employer supporting 1 in 45 jobs across the UK
- Direct employment within the energy sector grew from 90,000 to 125,000 between 2008 and 2012, providing an employment boost during an extended recession. In 2012 it supported an estimated additional 539,000 jobs through supply chain activities, and a total of around 1 in 45, or 664,000, UK jobs.
- The sector is supporting regional employment growth far more than others. 86% of energy job growth between 2008 and 2013 has been outside London, Southern, and Eastern England, compared with 53% for other sectors.
- Energy has stepped up its recruitment and investment in the next generation of trainees and apprentices joining the industry, but also to deliver the emerging range of new technologies such as smart meters to consumers. Between 2010 and 2011 annual apprentice recruitment increased from 970 to 1,430.6
A stable employer supporting 1 in 45 jobs in the UK
The energy sector is a major employer in the UK. In 2012, against a backdrop of recession and a prolonged delay in economic recovery, it employed an estimated 125,000 people directly, up from 90,000 in 2008.
Chart 3: Employment in the energy sector in 2012
Source: ONS Data, EY Analysis
The sector’s indirect economic impact also supports an estimated 539,000 additional jobs in those parts of the market that supply and support it. Together with jobs created directly, it therefore supports a total of 664,000 jobs – equivalent to 1 in 45 in the UK.7
These indirect jobs are created across a range of sectors, with a proportion concentrated in a number of key sectors, including employment services, construction, retail and employment related services.
Supporting the regions hardest hit by the recession
Unlike other sectors, like financial services, which are concentrated in London and the South East, energy is spread out across the country. Between 2008 and 2013, direct energy sector employment grew by around 30% (as shown in the chart below). 86% of this growth has been outside London, Southern, and Eastern England.
In the same period across other sectors, job growth has been higher in London, Southern, and Eastern England (290,000 jobs) than other regions (e.g., Northern England (4,000) and the Midlands (12,000 jobs))
Chart 4: Energy Sector Net Job Growth, 2008–13
Source: ONS data Totals may not sum due to rounding ONS recorded no change in jobs in Northern Ireland (to the nearest thousand)
Chart 5: Non-Energy Sector Net Job Growth 2008–13
Source: ONS data Totals may not sum due to rounding
An investor in skills, training and a new generation of employees
The energy sector recruited heavily in the 1970s and 1980s as it built new nuclear and coal-fired power stations and delivered the shift to North Sea gas. A large number of staff are therefore expected to retire over the next 10 years and will need to be replaced.
The sector has traditionally been a secure employer, reflecting the ever-present need for its assets and services. As a result, many thousands of key skilled employees have committed their entire careers to the industry, and significant numbers of experienced staff in senior or vital roles will be retiring in the coming decade, creating a need for growing numbers of young engineers and skilled workers.
Electricity Distribution Network Operators (DNOs)8 illustrate many of the sector’s key challenges and opportunities. DNOs and their contractors employ 14,100 and 6,200 respectively, or a total of 20,500, in technical, engineering and specialist roles.
However, more than half of employees are over 40 (up to 26% of the DNO workforce), and 13% of contractors are 53 or older. In addition, 47%, or 9,700, are expected to retire in the next decade.
This challenge also presents a significant opportunity. To maintain numbers, DNOs will need to employ 15,200 new staff, or 74% of the current workforce, over the next decade. This is expected to cost DNOs and their contractors £290m and £75m respectively, representing a tangible investment in employment and training, with a third of vacancies predicted to be filled in by apprentices.9
Upskilling and training
On average, 89% of UK electricity, gas and water supply employers provide on-the job training, compared to an EU average of 79%.10 This is defined as pre-arranged training at least partially funded by the organisation, or training taking place during employees’ paid working time, but excluding apprentices and trainees for employees.
Investing in local schools and colleges to upgrade skills
The energy sector has a history of developing skills in local schools and colleges, including safety and sustainability skills for primary and secondary schools, funding technical training programmes, and scholarships at colleges and universities – for example the British Gas Generation Green Programme:
Graduate trainee schemes
Most large companies in the energy sector have formal graduate trainee schemes aimed at recruiting and developing technically competent recent university graduates.
Apprenticeship programmes are a vital point of entry because of the specialist skills needed in the sector. Apprentices typically spend two to five years on structured programmes, after which the likelihood of finding a follow-on job with the same or another energy employer is nearly 100%. The Drax power station’s scheme is a good example:
To respond to its aging workforce, the sector is recruiting and training young people and increasing numbers of apprentices. Between the financial years ending 2010–11, annual apprentice recruitment increased from 970 to 1,430.11
6 Apprenticeship starts for power, gas and water industries. UK Commission for Employment and Skills, Sector Skills Insights: Energy, Evidence Report 51, July 2012, http://www.ukces.org.uk/assets/ukces/docs/publications/evidence-report-51-energy.pdf
7 Based on 29.7m total UK Jobs, ONS, Labour Market Statistics, July 2013, http://www.ons.gov.uk/ons/rel/lms/labour-market-statistics/july-2013/ index.html
8 Distribution Network Operators are responsible for the local electricity distribution network within each region.
9 National Skills Academy for Power, RIIO-ED1 Workforce Requirements: A report to Ofgem on the workforce requirements of DNOs during RIIO-ED1 and RIIO-ED2, Phase 3 — Final Report, May 2013, http://www.yourfutureenergynetwork.co.uk/documents/WFR.pdf
10 UK Commission for Employment and Skills, UK Energy Production and Utilities: Sector Skills Assessment 2012, Evidence Report 62, October 2012, http://www.ukces.org.uk/assets/ukces/docs/publications/evidence-report-62-energy.pdf
11 Apprenticeship starts for power, gas and water industries. UK Commission for Employment and Skills, Sector Skills Insights: Energy, Evidence Report 51, July 2012, http://www.ukces.org.uk/assets/ukces/docs/publications/evidence-report-51-energy.pdf