Oil and gas executives won’t be prepared to meet tomorrow’s production demand if they don’t quickly address the one asset they know least about: their people.
Sadly, today’s most commonly used solution to fix workforce shortages is to hire top talent away from competitors. Think of it as an industry wide addiction to reshuffling the same thinning deck of cards.
A crystal clear illustration of the problem was seen at a recent roundtable discussion we hosted with oil and gas clients and guests. The group was asked how each planned to replace their retiring baby boomer workforce. Without shame or hesitation, they all pointed at each other and said “My strategy is to steal from you.”
In the results of our recent research project on talent, most organizations believe they could yield meaningful returns if they could solve their talent challenges, and yield increased productivity, decreased attrition, increased production and decreased operating costs. Unfortunately, the poaching strategy will not enable achievement of these goals on a long term or sustainable basis.
Also, 66 percent of the respondents, employing more than 1 million workers in aggregate, said they hire workers from outside the organization versus promoting, training and transferring existing employees. What’s most troubling about the “buy-versus-build” recruiting method is that survey respondents said the top sourcing strategy was plucking away current employees from other oil and gas companies.
This type of poaching is not adding to the talent pool – it’s just driving labor costs up for the entire industry. Here are some tips for those looking to go beyond the poaching approach.
Look At Adjacent Professions
HR executives looking for new talent should expand their scope and cast a wider net. When distilling to the core qualities and traits needed for filling many of these vacant jobs, executives will find that workers in other adjacent professions may be excellent candidates. Certain oil and gas roles would be an ideal fit for employees who once were firemen, policemen, automotive technicians, in the military, prison support roles and manufacturing. Of course, certain civil, chemical and electrical engineering professions also would have viable transferrable skills. But the challenge will be determining how quickly a company can attract and develop this talent from adjacent professions. A form of trade apprentice programs may need to be in full renaissance.
Looking to other industries for alternative recruitment opportunities is already a successful strategy for many employers outside of oil and gas. It is possible to pinpoint specific ZIP codes around the country to identify where there is a greater propensity of workers with the company’s desired skill set. It is also possible to determine which trade schools should have hiring notices posted to get the greatest interest in applying for open positions.
Leverage Social Technologies
There’s now a growing opportunity for companies to leverage social technologies to expand the candidates they consider – for any and all positions. Clients are finding success doing some deep social scraping, much deeper than what companies are doing today. And for those who think skilled trades or hourly cohorts are not social savvy, just ask to look at their mobile phones and the apps loaded.
It’s really tapping into the whole opportunity for mining available data. With cutting edge social data technology, it’s completely possible for companies to sift through tens of thousands of candidates to find an ideal 300 to 350 with the right motivational and behavioral characteristics and appropriate (transferable) work history to fit their organization’s culture.
It’s common HR knowledge that a company’s best employees typically offer the best leads for promising new hires. Companies may soon start asking employees for permission to access their Facebook or LinkedIn profiles to help solicit jobs to the employee’s most desirable contacts. Data mining software would determine which of the employee’s contacts would fit certain vacant positions. The employee would get an email with a list of names from their contacts that might also make excellent co-workers. It takes the typical employee referral program to another level.
Capture the Institutional Knowledge
Companies are investing hundreds of thousands, even millions of dollars, on knowledge management technology but they might be better served taking time to capture the unwritten tacit knowledge leaving for retirement.
These soon-to-be retirees have so much unwritten knowledge from years of experience that needs to be captured and codified, either on the job or in a classroom, then transferred to the rest of the organization so less experienced workers are prepared to move into the senior ranks.
Based on current research, the U.S. workforce of hot jobs in the oil and gas sector – within the next five years – will lose 50 to 80 percent of workers age 55 and older. The data is even more striking when calculating those workers’ man-years, or the amount of work done by an individual throughout an entire year. Very conservatively, the industry could be losing more than 150,000 man-years of experience within the next five years.
Among the different segments of oil and gas production, the downstream segment has the most disparities in terms of the labor force profile. Graphically it looks like a double-humped camel – one hump of young people with too little experience and the second hump of older experienced workers with too little time left to work. In the middle is the gap of ready, capable and experienced staff to take on greater job independence and larger/higher impact and risk roles.
But after discussions with workers nearing retirement, it turns out that they don’t necessarily want to stop work, they just want to do something else. What are the alternative ways of keeping older workers engaged? Some strategies include offering flexible work weeks and a phased retiring program. It’s worth going the extra mile to keep seasoned talent so that hard-earned proprietary knowledge can seamlessly be transferred to the younger workforce.
Model the Future
Finally, companies would be wise to invest in modeling out the scenarios of what their workforce strategy is going to look like. Spending a fraction of their capital expenditures on business modeling analytics makes sense. Without the data, energy executives are blindly placing bets in hope for a big payday. Perhaps the roulette wheel lands on their number; perhaps it doesn’t.
In time, the winning companies will be revealed . . . they’ll be the ones who’ve mitigated their risks with workforce modeling data. And they’ve used creative workforce-building techniques – and sometimes proven techniques from decades ago – to help turn their gamble into a sound investment.
John Koob is a Partner in Mercer’s Leadership & Organizational Performance business and is based in Houston, and is the leader of the North America region for Mercer’s Global Energy Vertical. Mercer’s 2013 Oil & Gas Talent Outlook and Workforce Practices Survey is available at:
#TexasCEO's 10 Most Read Articles Of 2017 #2 The Changing Of The Guard: San Antonio’s #Economic #Development Future texasceomagazine.com/features… @SanAntonioEDF #1 Deep Roots In The Heart Of #Texas: The Kaspar Family’s #Holistic Approach To #Ranching texasceomagazine.com/features…
#TexasCEO's 10 Most Read Articles Of 2017 #4 @Jim_nyquist: At The Inflection Point Of #IIoT texasceomagazine.com/features… #3 Building #Innovation: @turner_talk Builds On Empowering Individuals texasceomagazine.com/features… @Turner_DAL @TurnerSouthTX #MiddleMarket #entrepreneurs
#TexasCEO's 10 Most Read Articles Of 2017 #6 The Cilantro Diaries: #Business Lessons From The Most Unlikely Places texasceomagazine.com/book-rev… @lgomez123 #5 From #Franchisee To #Franchisor: How Gordon Logan Built @SportClips texasceomagazine.com/features… #MiddleMarket #entrepreneurs
#TexasCEO's 10 Most Read Articles Of 2017 #8 #Mexico Is The New #China by @DrPippaM texasceomagazine.com/departme… #7 Growing The Next Generation Of Texas #CEOs: #CEO-to-CEO #Mentoring texasceomagazine.com/features… #Texas #MiddleMarket #business #entrepreneurs
#TexasCEO's 10 Most Read Articles Of 2017 #10 7 Top Trends That Will Shape #Texas In The Coming Decade by @KenGronbach texasceomagazine.com/departme… #9 Peter Huff Of @BlueSageCapital: A Generalist In The Specialized World Of #PrivateEquity texasceomagazine.com/features… #Texas #MiddleMarket