“Electrification has far-reaching consequences in several areas: power grids and homes need to be brought up to date, previously separate energy production and distribution systems need to converge, battery storage is required, millions of charging stations need to be installed, energy meters need to be fortified, solar panels installed, grids equipped with intelligence and new functionalities… and so on. This raises a new question: who will actually do all this work? Because in order to make the energy transition a reality, we will need a vastly greater number of electrical technicians and engineers.”
“However, around the world, there has been a persistent shortage of precisely this profession for years. In fact, the electrical engineering sector appears to be suffering from an image problem.”
Persistence in engineering careers is uneven, too, according to a 2022 survey of college graduates by the National Center for Science and Engineering Statistics. Although male and female engineering graduates start their careers with similar retention rates, the retention rates for women drop drastically below those for men over time. As an example, only 27% of women who completed engineering degrees from 2006 to 2010 were still working in engineering jobs in 2021, compared to 41% of their male counterparts.
Misaligned Incentives Across Stakeholders. Another roadblock to progress involves structural disconnects between public and private sector stakeholders that subvert collaboration. Companies find themselves competing for talent from the same limited pool and so may be reluctant to join sector-wide upskilling or marketing efforts out of concern that their investments will benefit competitors. Meanwhile, educational institutions and employers operate on radically different timelines—with institutions educating the next generation even as employers seek ready-to-deploy talent today. The two may also have different views about whether professors or future employers should have the final say on what students should learn.
Although public and private educational institutions are well intentioned and aspire to solve the problem, these structural misalignments can lead to friction in collaborative initiatives that they undertake with companies and industry organizations, often resulting in one-off approaches and subscale or redundant efforts that fail to achieve meaningful change.
We recognize that ample efforts to mitigate the looming engineering gap already exist. Current programs range in size and scale, with involvement across the private, public, and not-for-profit sectors, and have shown positive results. Ultimately, however, narrowing the gap will require major stakeholders—employers, educators, and the government—to come together in new ways to scale current efforts that deliver positive results and to deploy a range of new initiatives, from increasing female representation to reskilling the current workforce, testing these initiatives and learning as they go.
The solution requires strong coordination. It will therefore entail identifying a core orchestrator—a central figure or organization to assume responsibility for choreographing the collaborative efforts of all stakeholders and ensuring that they are in agreement.
As an example, one public-private partnership agency dedicated to job creation, growth, and economic development in a Southeast Asian country embraced the role of core orchestrator by collaborating closely with industries, education providers, and other stakeholders across the country. Through benchmarking, stakeholder input, and research, it launched a first-of-its-kind talent program that forecasted job titles and gaps for the next five years, engaged education providers to develop tailored training programs, and initiated recruiting efforts to build a talent pipeline for current and future roles.
Although various efforts to create a cooperative organization and designate a core orchestrator continue, we propose several practical steps that individual companies can take to build on prior achievements and work toward closing the talent gap.
Plan the workforce strategically. Companies should allocate resources to initiatives that have the greatest potential to create significant positive outcomes, such as efforts to improve diversity or boost the general understanding of future needs. Strategic workforce planning, for one, is crucial if organizations are to successfully navigate a changing environment and fill the myriad new roles that will emerge in the coming years. By proactively analyzing and forecasting their workforce requirements, companies can make informed decisions about talent acquisition, development, and retention, and ensure that they have the right people in the right roles at the right time.
One major online retailer faced challenges in sourcing technically qualified candidates and struggled internally to understand its true talent needs. In response, it mapped 20,000 vacant internal technical job roles in emerging fields such as cloud computing and machine learning, and then implemented initiatives such as machine learning universities, apprenticeships, prepaid tuition programs, and intensive IT training for its nontechnical workers. The retailer now aims to train a total of 100,000 employees at a cost of $700 million by 2025, growing a skilled workforce to bridge the talent gap.
Create a common taxonomy. Businesses need to collaborate industry-wide on creating a common taxonomy to reduce confusion and support effective forecasting. With a common taxonomy, businesses could explore nonconventional hiring routes, such as partnering with community colleges, to increase the talent pool. This approach would ensure that potential employees already possess the skills they require and would allow companies to focus on further training and development. In the absence of this collaborative effort, inconsistent identification and categorization of skills could restrict the potential benefits of industry-school partnerships.
For example, a public-private partnership agency that was focused on job creation and economic growth embarked on a journey to address talent development challenges in one US state. Initially, the agency sought to discern the most crucial initiatives for significantly improving the state's workforce skills. With a comprehensive approach that included benchmarking, stakeholder input, and extensive research, it identified high-impact talent initiatives in line with the state's priorities. Then it launched a pioneering talent program in close collaboration with industry, educational institutions, and other stakeholders. This program addressed the most pressing employer needs and constructed a common taxonomy for engineering skills, using data from The Burning Glass Institute and employer interviews. The new taxonomy helped in forecasting required job titles, identifying skill gaps, and engaging with education providers to create tailored learning modules that supported efforts to train the talent needed to fill the gap.
Retrain existing employees. In designing and implementing talent initiatives, companies should focus on ensuring that they have a lasting impact on the talent pool. Faced with a projected oversupply of 41,000 engineers in legacy skilled fields by 2031, for example, companies should shift some of their focus away from hiring to reskilling or upskilling, moving their employees away from older engineering skills and toward newer skills through the use of intensive training programs. Such retraining reflects awareness of the long-term benefits and cost effectiveness of investing in a company’s current workforce. Notably, the Financial Services Skills Commission estimates that the cost of hiring a new employee is about 2.5 times as high as the cost of retraining an existing employee.
See also:One global consumer durables company successfully implemented an experiential learning program to help employees develop critical new business skills in performance marketing and data analytics and apply those capabilities to projects in key business areas. The company taught program participants concepts and helped them develop proficiency through application of those concepts to real-life projects. Finally, it embedded and engaged the employees’ new knowledge by making it a part of their day-to-day jobs. In the pilot year, the program certified nearly 50 employees; the company is now scaling it to certify many more in the future.
Collaborate. Forming partnerships between companies and educational institutions, including universities and community colleges—and even involving the public sector—has great potential. Such collaborations can enhance communications and transparency with regard to the talent demands of various industries—for example, to more closely connect educational offerings and workforce needs.
With state support, one leading global aerospace company collaborated with regional high schools to develop a two-year advanced manufacturing curriculum to prepare students for high-demand jobs through hands-on learning. The program currently serves more than 50 high schools and 3,000 students, and the company is now hiring most of the program’s graduates.
In another example, a prominent global technology leader has initiated an AI workforce program that offers 225 hours of AI course content, faculty training, and implementation guidance to community colleges across the US, with the goal of expanding AI education to all 50 states by 2023. Currently, 31 schools in 18 states have joined the program, which prepares students for various AI-related roles. Through its partnerships with the colleges, the company has also created new job categories, such as AI engineering technician. This innovative initiative recognizes that not all AI skills require traditional bachelor's degrees and encourages students interested in these roles to pursue community college degrees. As the program’s outcomes unfold, the company is actively monitoring student achievement, fostering collaboration with employers, and supporting underrepresented student populations in AI roles. This forward-thinking approach aims to address labor market needs while promoting diversity and inclusion in the emerging tech-driven job market.
A similar collaboration between engineering schools and the automotive industry could help close the engineering gap in that sector. As production of internal combustion engine vehicles declines, demand for mechanical engineers who specialize in this area is likely to fall. Through open dialogue, automotive companies could present their changing priorities and talent requirements to schools, helping the latter to adjust their programs and equip students with skills that are more urgently needed in emerging areas of the industry, such as in electric vehicles or autonomous driving technologies.
Addressing the talent gap in engineering is a complex challenge that requires a sustained, coordinated, multipronged approach that involves both public and private sector players. By focusing on developing future engineers from an early stage and working together to address systemic issues, stakeholders can strengthen the talent pipeline and ensure a continuous and sustainable supply of skilled professionals for decades to come.
The author team deeply appreciates the invaluable contributions of their partners at SAE International, Sri Srinath, Dan Nicholson, Jamie Ferguson, and Joan Wills. Dan, Jamie, and Joan are also trustees of the SAE Foundation, SAE International’s charitable arm.
SAE International is a global leader in advancing mobility knowledge and solutions for the benefit of humanity. With over 128,000 members, including engineers and technical experts in aerospace, automotive, and commercial vehicle industries, SAE champions lifelong learning and voluntary consensus standards development. Its core mission is to promote safe, clean, and accessible mobility solutions, all while fostering diverse collaboration across companies and borders, embodying its commitment to diversity, equity, and inclusion. The SAE Foundation raises funds to support SAE’s award-winning pre-K through university STEM education programs, awards, and scholarships, providing life-changing access to STEM learning experiences for students around the world.
SAE International and BCG are working together to help identify a core orchestrator and create a platform to advance potential initiatives. We welcome like-minded individuals and organizations that care about this effort to join our coalition. To be a part of the solution or follow our progress, please reach out to the authors of this publication.
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