During the second meeting of the IOR Industry Skills Alliance, Co‑Chair Andrew Bowden FInstR provided an update on the latest labour market intelligence for the RACHP sector. The key points from his briefing are summarised below.

"The UK RACHP sector is positioned as a critical enabler of the UK’s Net Zero ambitions, supporting cooling, heating, and energy efficiency across buildings, infrastructure, and industry. The sector is substantial in scale, employing over 200,000 people, including approximately 40,000 service engineers and technicians, and supported by more than 5,000 specialist businesses, the majority of which are SMEs. This highlights a fragmented but highly specialist industry with strong SME dominance and significant reliance on technical expertise.

Labour market intelligence indicates a persistent and growing skills shortage. At any given time, there are estimated to be between 4,000 and 7,000 live vacancies, with annual demand reaching approximately 20,000 to 35,000 advertised roles. This reflects both ongoing replacement demand and growth-driven recruitment pressures, particularly as the sector responds to increasing demand from Net Zero policy, heat pump deployment, data centres, and industrial cooling requirements.

Apprenticeship demand is particularly strong for the Refrigeration, Air Conditioning and Heat Pump Engineering Technician standard, with employers consistently reporting that demand for apprentices exceeds supply. Key contributing factors include an ageing workforce, insufficient new entrants, and a growing need for upskilling across emerging technologies. There is also clear evidence of a structural “missing middle”, where experienced engineers are not being replaced at the rate required to sustain future demand.

From a workforce perspective, 59% of employers report increasing difficulty recruiting technical staff, while 73% expect demand for engineers and technicians to rise further over the next 2–3 years. Critical skills shortages are identified in areas such as natural refrigerants (CO₂ and hydrocarbons), heat pump systems, controls, system integration, design engineering, and commissioning. These skills are becoming increasingly essential as the sector transitions towards low-carbon technologies and more complex integrated building systems.

Salary data reinforces strong labour market demand and career progression opportunities. Apprentice roles typically range from £16,000–£24,000, progressing to trainee engineers at £25,000–£32,000 and service engineers at £38,000–£48,000. Senior and specialist roles command significantly higher salaries, with commissioning and design engineers earning up to £70,000, service managers reaching £85,000+, and specialist engineers in areas such as controls, data centres, and heat pumps earning £60,000–£80,000+. The average engineer salary sits between £44,000–£48,000, reflecting strong earning potential and sector attractiveness.

Demand is distributed across the UK, with particularly strong recruitment activity in London and the South East, the Midlands, the North West, Yorkshire, Scotland, and the South West, reflecting both urban infrastructure demand and industrial requirements across regional hubs.

The sector also faces significant qualification and workforce challenges. Employers report an ageing workforce, a shortage of experienced engineers, and increasing pressure to upskill existing staff to meet evolving technical requirements. These challenges are compounded by the need to deliver Net Zero outcomes, creating urgency around recruitment, training, and capability development.

Emerging skills requirements are increasingly shaping workforce demand, including expertise in natural refrigerants, heat pump systems, building management systems (BMS), energy optimisation, digital diagnostics, system commissioning, and project management. These reflect a shift towards more integrated, data-driven, and energy-efficient system design and operation.

Looking ahead, the future demand outlook remains strongly positive but challenging. Growth will be driven by Net Zero policy, heat pump deployment, expansion of data centres, increasing cooling demand, and growth in industrial and food-related refrigeration. However, without urgent action on skills development and recruitment, the sector faces increasing pressure to meet both economic and environmental targets.

Overall, this is clearly a high-demand, high-growth sector with structural workforce shortages, strong salary progression, and significant opportunity for targeted apprenticeship and skills interventions, but industry needs to work and act on this together."