Building a sustainable future: HR’s role in transforming shipbuilding through green technologies

In our previous blog post, we explored some critical trends in the shipbuilding industry. Let’s dive deeper and examine specific examples of how companies navigate this complex framework.

The global naval shipbuilding market is thriving and showing impressive resilience and growth. Recent research on LinkedIn indicates that the market was valued at USD 96,850 million in 2022 and is projected to reach USD 110,110 million by 2028, growing at a compound annual growth rate (CAGR) of 2.16%. This steady rise underscores the substantial investments and technological advancements driving the sector worldwide.

Yet, despite its critical role in economic growth and global trade, the shipbuilding industry needs help recruiting, training, and retaining skilled workers.

With his wealth of experience at Damen Yachting, Bert Beckers, HSSEQ Manager at Damen Yachting in the Netherlands, articulates the industry’s core workforce challenge: “The real challenge lies in not just finding skilled workers but retaining them. We need to build a safety culture that engages all employees, ensuring they feel valued and have growth opportunities”.

Let’s review the challenges and solutions for the shipbuilding industry’s companies, examine the hurdles in recruitment and retention, underscore the importance of training and skill development, and discuss how collaboration, as a key strategy, can help overcome these challenges.

The shipbuilding industry, a cornerstone of global trade and maritime activities, faces numerous challenges in the modern era. With an increasing demand for efficiency, sustainability, and advanced technology, shipbuilders should navigate complex waters to maintain their competitive edge. One prominent challenge is growing and sustaining a skilled workforce, especially among blue-collar workers.

Sustaining a skilled workforce in the shipbuilding industry involves several intertwined factors:

• Aging workforce. Many blue-collar workers in the shipbuilding industry are nearing retirement age. Approximately 30% of the shipbuilding industry’s workforce is over 50, with a significant portion expected to retire within the next ten years. This demographic shift poses a significant risk to the industry’s ability to maintain a skilled labor force.
• Skill gaps. Technologies don’t stay in one spot; they develop, and thus, the skill sets required in the shipbuilding industry are changing. There is a growing need for workers proficient in digital tools, automation, and advanced manufacturing techniques. However, there is often a gap between workers’ skills and those required by modern shipbuilding practices. For example, a recent McKinsey report highlights that many shipyards operate with bottom-quartile overall equipment effectiveness (OEE) and labor productivity compared to other sectors, mainly due to skill gaps and the lack of modern digital integration in production processes. Additionally, over 60% of shipbuilding companies report difficulty finding workers proficient in new technologies such as digital tools and automation.
• Retention and attraction. The physically demanding nature of shipbuilding jobs and competition from other industries make attracting and retaining skilled workers challenging. Younger generations may be less inclined to pursue careers in shipbuilding, perceiving it as less attractive than other high-tech or less physically demanding industries. The shipbuilding industry faces a turnover rate of approximately 15% annually, with younger workers less inclined to pursue careers in this physically demanding field.
• Training and upskilling. Continuous training and upskilling are essential to addressing skills gaps and adapting to technological changes. However, the cost and logistical challenges associated with large-scale training initiatives can be prohibitive for many shipbuilding companies. According to the U.S. Bureau of Labor Statistics, 70% of shipbuilding companies cite large-scale training initiatives’ cost and logistical challenges as major barriers to implementing effective upskilling programs.

Effective financial cost planning is crucial in managing the expenses associated with workforce sustainability. Companies should balance the costs of hiring, training, and retaining employees with the long-term benefits of a skilled and stable workforce.

Investment in training

Allocating a sufficient budget for training and development programs is essential. While this represents a significant upfront cost, the long-term benefits of a skilled workforce can outweigh these expenses. Training programs should be designed to address current skills gaps and anticipate future needs.

Cost-benefit analysis

Regular cost-benefit analyses can help companies evaluate the effectiveness of their workforce strategies. It involves assessing the return on investment (ROI) of training programs, recruitment initiatives, and retention efforts.

Manage technology

Investing in technology that supports workforce management, such as human resource information systems (HRIS) and learning management systems (LMS), can enhance efficiency and reduce costs. These tools can streamline administrative processes, track employee progress, and facilitate targeted training.

The shipbuilding industry is navigating uncharted waters, riding the wave of sustainability that is reshaping global industries. Once an industry known for environmental problems, shipbuilding is becoming a leader in environmental innovation. This change is not only about introducing new technologies; it is a complex transformation that requires re-evaluating the skills and practices of the workforce. The growing importance of sustainability in the industry means that HR should play a key role in driving this change, ensuring that the workforce meets the new requirements. From strategic talent acquisition to continuous skills development, HR is at the forefront of this green revolution, guiding the industry towards a sustainable future.

Green shipbuilding encompasses a range of practices aimed at minimizing the environmental impact of ships throughout their life cycle. It includes using:

• Environmentally friendly materials
• Energy-saving designs
• Waste reduction technologies
• Sustainable operations.

With increasing regulations and public awareness, shipbuilding companies are under increasing pressure to adopt these practices.

One prominent example is Maersk, a world leader in shipping, which has committed to zero CO2 emissions by 2040. This ambitious goal drives Maersk to innovate in vessel design, fuel efficiency, and operations. Similarly, Japanese shipbuilder Kawasaki Heavy Industries is investing in hydrogen-powered ships as part of its commitment to sustainability.

HR departments are changing in aligning workforce capabilities with green goals for the shipbuilding industry. To succeed in this mission, HR professionals should go beyond traditional approaches, manage advanced tools and data-driven insights. HRForecast offers data-driven solutions that help HR leaders strategically plan, develop, and optimize their workforce for a sustainable future.

The path to sustainable shipbuilding begins with strategic workforce planning. For example, HRForecast’s smartPlan solution is designed to help HR departments anticipate and prepare for new sustainability requirements. Imagine being tasked with ensuring your shipyard has the right talent for environmental initiatives. smartPlan uses predictive analytics to predict the skills your organization will need, from expertise in sustainable materials to expertise in renewable energy systems.

For example, a company moving to green shipbuilding may find that with smartPlan, it needs to triple the knowledge of its green design workforce over the next five years. Armed with this information, HR departments can proactively recruit and develop talent for these critical positions, positioning the company as a leader in sustainable shipbuilding.

To become more sustainable, having the right people and ensuring they have the right skills is essential. It’s where smartData from HRForecast shines. Imagine conducting a comprehensive skills audit in your organization. smartData doesn’t just list what your team currently knows; it highlights where the gaps are and predicts which skills will be most critical as green technologies evolve.

Take Fincantieri as an example, a European shipbuilding company that has invested heavily in sustainability training. Using smartData, they could pinpoint where their workforce needed upskilling, whether it was advanced welding of lightweight materials or integrating renewable energy systems into ship structures. The result? — a workforce that is not only prepared for the challenges of today but also ready for the innovations of tomorrow.

Attracting top talent in sustainable shipbuilding requires more than just competitive salaries. HRForecast’s smartPeople solution enables HR teams to refine their recruitment strategies, making your company’s commitment to sustainability a core part of your employer brand.

Picture this: You’re competing for the best minds in green technology. With smartPeople, you can showcase your company’s green credentials in job postings, interviews, and onboarding processes, ensuring that you attract candidates who are not only skilled but also share your values.

But recruitment is only half the battle. Retaining these talented individuals is just as crucial. smartPeople helps you build retention strategies emphasizing continuous learning and career development in green technologies. Ulstein Group, a shipbuilding company, could use smartPeople to create a robust talent pipeline, partnering with universities and offering clear career progression paths in sustainability roles, ensuring their best employees stay engaged and committed to the green mission.