Future Energy Industry - solving HR talent crisis in industry where up to 40% of engineers will retire in 5 years

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Media interview: Petronas International Human Resource Summit, Malaysia.

From a people perspective, what do you think are the three key HR Oil & Gas challenges that are facing the Asian region today?

Every HR challenge and every HR-related global trend is related in our increasingly hyper-connected world so it is hard to list just three challenges in isolation.  Here are three issues that closely mesh together.

1. Rapid changes in the global energy markets
2. Rapid changes in national energy strategies in Asia
3. Rapid changes in Asia labour markets / urban migration / demographics

The fact is that global energy strategies, which must be built on related HR strategies, are being overtaken by events. The world is changing faster than you can hold a board meeting.  A 20 second earthquake in Japan triggered a 40 year change in energy policy in Japan and Germany with far reaching global consequencies for the oil and gas work force.  That means a completely new approach to strategy: the days of having only one strategy are over.  Agility requires parrallel strategic thinking.

Need a world-class human resources keynote speaker for your event? Phone or e-mail Patrick Dixon now.

The O&G/Energy industry by its nature tends to recruit and promote technical and professional specialists into managerial and leadership positions because they are experts in their specialist subjects, but quite often their leadership/management capabilities are left underdeveloped. This can result in highly logical managers being very good with numbers and science but not particularly good at the things which motivate and encourage people. What are your thoughts on this?

The challenge happens both ways round:  world-class specialists with less developed leadership skills, and world class leaders with less developed specialist understanding.  We need both. Oil and gas industry leaders can learn from other industries such as law, accounting and financial services where history has proven how dangerous it is to build organisations on data , elaborate forecasts and so on, without close attention to how team members feel, whether they believe in what they are doing, and whether they like being at work. 

I work with many groups of highly analytical leaders to develop their wider people skills.  The key is to help each leader understand (often to their surprise) just how often their own personal, day to day decisions are influenced by “soft” emotional factors, and how they can use that understanding to achieve outstanding team performance.

The industry is being promoted as a vital strategic resource that helps fulfil our energy needs and insulates countries from volatile global markets. However, filling the skills gap is widely considered to be one of the biggest challenges the industry faces. How can the 'threat' of the skills shortage be overcome?

There are two primary issues: firstly an absolute global shortage / regional shortage of highly experienced experts in vitally important specialties.  Secondly, those that have these skills are often inprepared to work (any more) in the sector, or on the same terms.  So we need two strategies working in combination:  1) sponsoring, promoting, encouraging a new generation to train in these specialities, with a wide range of opportunities including fast-track career development, work experience placements and so on. 2) radical overhaul of all terms, conditions and cultural issues in the workplace.  Finding ways to encourage people to stay in the company is really important, and that may mean (especially for those looking forward to retiring soon) more flexible working, short career breaks or mini-sabbaticals, and a host of other creative initiatives to make it more attractive for people to continue to work who may have no desire otherwise to do so financially or socially or mentally or physically.

According to a recent global study by the Economist Intelligence Unit, managing human capital is seen by businesses as by far the most important means of improving productivity. The problems are often exasperated by practices of unfair competition between Oil & Gas companies. How can we minimise these challenges?

“Unfair” is an interesting word. In most other industries that usually means some kind of government subsidy or penalty which is distorting markets.  The truth is that oil and gas industries have their own separate cycles of innovation, boom and bust.  While in theory they should march in step with general energy prices, as we have seen with the glut of shale gas following the boom in the US, in reality we are seeing a growing gap between oil and gas.  This is just a fact of economic life.

Yes a company is only as good as the people in it, and churning staff is one of the fastest and most reliable ways to destroy the value of a company.  “Managing human capital” can mean many different things, but is really about building world-class, highly energised and productive teams that make things happen in innovative ways at extraordinary speed over prolonged periods.  It’s all about engagement, understanding what people want out of life and why they chose to come to work each day, what they get excited about and what they are really proud of doing.

The O&G industry is struggling to meet the energy needs of the global population while at the same time the increase in CO2 emissions are creating environmental challenges. From a HR perspective, challenges such as new attitudes, social media technology, retiring workforce and globalisation are creating new challenges – how do you think HR professionals in the industry can meet these challenges to redefine human capital for a more sustainable future.

Need a world-class human resources keynote speaker for your event? Phone or e-mail Patrick Dixon now.

Oil and gas will continue to have image problems in attracting new talented graduates, many of whom are worried about carbon dioxide emissions and other environmental risks.  The most successful energy companies will attract the best people by promising that they will be a part of shaping a more sustainable and clean future.  HR professionals on their own will be unable to sort out these challenges, but they can make a huge contribution.  The entire oil and gas industry needs to work together in each region, to promote itself as great sectors to work for:  innovative, growing, dynamic, forward thinking, responsible, protecting the environment, and aiming to transition our world to a carbon-less future.

The gas industry has two key advantages over oil.  Firstly, every time 5 coal fired power stations are replaces by gas power, it is the equivalent of installing 9000 megawatts of wind power, because gas power is more efficient than coal. So the gas industry can be promoted as a vital part of the transfer to green tech, in efforts to tackle global warming.

Secondly, it is almost impossible in most countries to make full use of wind or solar power without balancing power supply and demand with rapidly responsive gas turbines. So gas power is fundamental to the growth of alternative energy.

However the gas industry needs to live up to the promise of cleaner energy by taking huge care over the development of new innovations in shale gas or frozen methane.

So-called green oil, or biofuels, have only made the image of the oil industry worse.   30% of all grain grown in America last year was burnt in vehicles – at a time when over 1 billion people are short of food.  Biofuels have created a powerful link between land prices, forest prices, food prices and oil prices.  As oil prices rise, more agricicultural efforts are switched to producing oil.

The oil industry needs to tell a powerful story about how it improves life on earth, and why it has a vitally important future in a future world where we will use far less oil in heating or transport. The alternative is that it will continue to risk being labelled as a “necessary evil until alternatives can be developed more widely”.  That means oil companies need to tell human stories about plastics, pharmaceuticals, paints, laminates, and all the other oil-based products that we take for granted.  Oil companies need to show how they are also investing in things like better vehicle batteries, energy saving, carbon capture, large-scale solar power and so on.

Need a world-class human resources keynote speaker for your event? Phone or e-mail Patrick Dixon now.


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