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HR Issues for the Oil & Gas Sector

While HR is fundamentally changing across industries, three key themes are driving disruption in HR specific to the oil and gas sector.

The imperative for energy companies remains the pursuit of innovation in workforce planning and operations.

 

Workforce demographic shifts

Current workforce demographics place the vast majority of oil and gas workers either older than 55 or younger than 35. Older crew comprise almost 50 percent of the employee base, and will be set to retire in the near future, taking with them industry knowledge and experience.

The challenge is for HR is to prepare their organisations for the loss of the older workers by hiring and training employees. Yet the war for talent is proving particularly brutal for energy employers.

Younger workers are presenting a new set of challenges for HR, expressing increasing concern about the role of oil and gas companies in society and demanding changes in the working environment.

Hiring for offshore rigs and other remote jobs also means finding employees willing to commit to that lifestyle. Workers often work for 7-14 days at a time and live on boats near the rig. They are away from their families for weeks to months on end and often face difficult working conditions like extreme temperatures and risks due to weather.

The harsh working conditions and predominantly male workforce make it hard for HR professionals to establish a gender balance within their companies.

Salary is one of the top requirements to lure candidates into the field and the industry needs to pay well to bring people out into the field. However, many companies are also working to make the experience safer, and with better hours and living conditions, in hopes of increasing interest in the work.

 

Technological advances

Not only must HR managers fill the gap left by retiring workers, they also need to keep up with changes in technology and ensure that talent coming through the ranks is technically capable of delivering on operational and strategic needs.

At a time of rapid advances in artificial intelligence, automation, and human-machine interaction, people will remain core to oil and gas companies (and their HR functions). In fact, at all levels of the organisation, each employee will need to create ever more business value.

Profound technological advances are disrupting the old ways of working and enabling step changes in productivity. Automation is replacing workers on a large scale, and the jobs that remain require increased human-machine interaction.

Technology is already changing the way we communicate and access information across organisational boundaries. With instant access to information and expertise, people at lower levels in an organisation can make increasingly informed decisions. Carefully exploring these opportunities can not only help to deliver direct business results, but will also help to accommodate demands for more meaningful work from the next generation of talent.

As more devices connect to the cloud, data generation continues to grow exponentially. This explosion of data—combined with advanced analytics and machine-learning tools—lets companies fundamentally reimagine how and where work gets done.

The competition for new skills and capabilities has intensified. Most notably, companies seek digital business talent, especially people with industry, leadership, and digital skills who can act as “translators” between business needs and the providers of digital solutions.

Millennials will soon constitute the majority of the workforce in developed markets, and have already started their climb into management and executive roles. These digital natives bring their own expectations regarding technology, collaboration, pace, and accountability. At the same time, a well-educated, globally competitive talent base has grown rapidly in emerging markets.

 

Transformation of talent & culture 

Just as new skills and capabilities are required to succeed in a new industry environment, the same is true for culture, values and behaviours. For example, day-to-day leadership capabilities must continue to evolve as oil and gas becomes more like other manufacturing industries, with a focus on efficiency and continuous improvement. This requires a cultural and organisational shift toward more autonomous frontline leaders and teams, without compromising on safety or productivity.

These changes will create flatter organiations where the relevant skills for the task at hand become increasingly important relative to the person’s level in the hierarchy.

Leaders will need to rethink how they organise workplace roles and tasks. While jobs may not be eliminated, tasks within jobs will be affected, and in different ways. Some tasks will become entirely automated. Others will see humans and machines working together. Productivity gains will depend on this reinvention of both work and roles. Whether you call it job atomisation, or work pixelisation, it will be disruptive. There will be a period of transition for employees. Investing in the enterprise’s ability to re-skill the workforce will be critical to achieve productivity gains.

Today and moving forward, a company’s ability to manage talent will be a driver, an enabler, or a major constraint in creating a competitive advantage and business value. HR must be a part of or even help shape the business and talent strategy discussion early on, supported by data-driven, well-founded perspectives about the talent challenges and opportunities that the company will face.

Further, with ever more value generated by each employee, maintaining and further developing a strong talent culture becomes increasingly important.

Ultimately, a strong talent culture is built and maintained through implementation of sound HR practices, shaped by the trends and disruptions as described above. By capturing these opportunities, oil and gas companies will not only improve delivery of specific HR services, but also lift the role of strategic HR and further develop their own talent cultures to set up for lasting, stronger organisations.

 

Need assistance?

DavidsonMorris are established advisers to the oil & gas sector. As employer solutions lawyers, from offices in Aberdeen, London, Cambridge, Manchester and Birmingham, we work with multinational energy companies to support with their full HR requirements including human resource & global mobility consultancy expertise combined with employment & immigration legal advice.

We understand the commercial and legal challenges facing oil and gas companies, and work to support our clients in meeting their workforce management and planning needs while reducing legal risk exposure. Contact our oil and gas sector specialists today.

 

Last updated: 2nd January 2020

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