CCO, Retirement Solutions
Strategic Growth Director
The global financial crisis (GFC) of 2008 mobilised a
rapid response across the energy industry. Investment
into science, technology, engineering, and mathematics
(STEM) studies fell away as capital was redeployed to
focus on retaining the knowledge, skills and experience
of the mature workforce. Although these efforts enabled
some firms to survive, and flourish as competition fell
away, the rapid decline in oil prices within the last 2
years has forced firms to take drastic action.
A substantial portion of redundancies were settled with
employees nearing retirement. Although these measures were
taken to secure immediate financial savings, they have come
at a cost; firms have lost critical knowledge and experience
from their workforce. As an aging workforce continues to
reach retirement and changing operating models – fuelled
by regulatory pressures – demand new skills, securing this
expertise is critical to the continued development and success
of energy firms; but global commercial and sociocultural
pressures are a challenging barrier to overcome when
attracting and retaining talent across the industry.
Attracting and retaining talent is an immediate challenge for
energy firms. As global commercial and sociocultural pressures
change in the next 5, 10 and 20+ years, the challenges and
opportunities for energy firms will shift significantly.
Energy firms will need to focus on addressing the immediate skills shortage and
experience gap by attracting new joiners and retaining the existing workforce.
“A survey of participants across North
America, Europe, Asia, and the Middle East
reported that 44% of STEM Millennials and
Gen Zs are interested in pursuing a career
in oil and gas, compared to 77% in the
technology sector, 58% in life sciences and
pharmaceuticals, and 57% in healthcare.”
As future generations prepare to enter the workplace, the attraction of the energy industry
is being diluted by:
A global focus on climate change and social responsibility are core drivers
for career decision-making and experts have identified a growing trend. Oil and gas
companies are struggling to attract talent, particularly if oil features prominently in
the branding. Inspired by Greta Thunburg, schoolchildren and young adults used their
collective power to stand united against climate change. Meanwhile, public protests
and the proliferation of groups such as Extinction Rebellion have bolstered this
message. This global sociocultural movement has had an immediate and direct impact
on energy firms; potential joiners feel that they have a responsibility to pursue careers
in alternative industries with perceived social commitments.
Regulators are increasingly focusing on ESG issues and energy firms must take
immediate action to meet environmental obligations and demonstrate commitment
to diversity, equity, inclusion and climate action. In addition to the climate change
conversation, ethical working practices, privacy and data management are increasingly
scrutinised by both regulators and the workforce. Commitment and integration of
ESG factors is now the hallmark of sustainability. Social responsibilities will need to
be addressed with a focus on diversity, equity and inclusion to develop a working
environment where employees feel valued and safe.
Shifting social values - new generations are growing in a time of radically
shifting sociocultural behaviours. Considerations such as a work/life balance,
job satisfaction and job security are all valued increasingly by new joiners and
their value is beginning to outweigh salary as core decision-making factors.
Although salary remains a core driver for career decision-making, the rise of
renewables and decline in hydrocarbon fuel usage is likely to reduce firms’
profit margins. With less available capital, salaries may begin to fade and
without a financial incentive, new joiners are more likely to pursue a career
in alternative industries with additional benefits.
Technology is another core driver for STEM Millennial and Gen Z decisionmaking.
Recent reports indicate that graduates show the most interest in
industries that they believe will be most impacted by new technologies.
Globally, just 42% believe that new technologies will have a major impact
on the oil and gas industry, compared to 73% in the technology sector .
On assessing potential career paths, the energy industry pales against the
glittering appeal of technology giants in Silicon Valley. This perception
translates into attraction, and STEM graduates are increasingly transferring
their knowledge and skills to alternative industries.
“According to the GETI, three in ten respondents
are doubtful that they will remain with their
organisation over the next three years.”
Considering the unprecedented talent shortage and employee readiness to switch
roles or even sectors, retaining talent is an immediate challenge for energy firms.
Traditionally, the promise of a strong salary directly translated into high workforce
engagement, but changing sociocultural values are contributing to employee
Alternative industries are increasingly seeking experienced energy
employees, as their transferrable skills and experience make for a smoother
transition into their industry. Although new joiners are typically more receptive
to the promise of benefits packages and access to innovative technologies,
the increasingly challenging commercial environment of the energy industry
is increasing the appeal of transferring to alternative industries for existing
employees. Energy firms are at risk of losing the pivotal skills which have the
potential to drive operational change and this departure of top talent could be
the difference between success and failure.
Career progression is highly valued. Since the energy industry is undergoing
rapid change, and COVID-19 reduces demand, firms are currently in a state of
survival. With capital being redeployed elsewhere in the business, investments
in ongoing training and development have slowed. GETI reports that 44%
of employees in the energy sector say that their company does not regularly
invest in their training and development and 32% report no access to training
with their current employer in the last year. With limited access to training
and development opportunities necessary for employees to upskill, top talent
could be motivated to pursue opportunities either with competitor firms, or
alternative industries altogether.
Relocating - efforts to attract new joiners are pushing energy firms to operate
in new territories. To establish the business and operate effectively in new
regions, existing roles are being relocated. Although GETI data suggests that
many employees would be willing to relocate, the reality of relocating can be a
driver for employees leaving their roles or the industry altogether.
“In the immediate future, energy firms will need
to establish future goals and use these objectives
to drive the talent strategy, to fill the talent
pipeline with the necessary skills, knowledge
and experience to navigate new challenges
and pursue new opportunities. ESG will impact
energy firms’ talent strategy, particularly within
the next five years. ESG reporting requirements
will have an impact on how energy firms select
and develop talent, with a spotlight on diversity,
equity and inclusion. While firms will need
to consider how to structure compensation
and benefits to fulfil regulatory and social
Suzanne Courtney, Strategic Growth Director EMEA, Aon Assessment Solutions
Driven by divestment in oil and gas, and the insurance market shifting away from
traditional coverage, commitments to carbon neutrality are pivotal to securing
investment and by extension, long-term survival. The shift towards renewables, and
the transition toward digitalisation and automation will gather momentum, placing
a renewed emphasis on the need for new skills, and providing new opportunities for
energy firms to develop their workforce.
Efforts to reinvent branding and perception is already underway, particularly
in the Scandinavian region where activity has involved reinventing brand
names, assets and pursuing research projects. For firms which rapidly invest in
renewables and commit to ‘net zero’, their efforts to align with sociocultural
values is likely to increase the appeal of the energy industry.
As the industry shifts towards sustainability, STEM programmes are likely to be
revived. The investments made in STEM initiatives will engage new generations
by guiding and supporting study and career decision-making.
Experts predict a net job loss across a 10-year period as new technologies and
operations create new opportunities at entry and experienced levels.
New joiners will be attracted to new technologies and opportunities to fulfil
their social responsibilities; their work is contributing to creating a more
For existing employees, the shift towards renewables will provide new
opportunities to develop new skills to boost career wellbeing and safety. Aside
from individual career progression, sharing the success and growth of the
business will boost employee engagement and loyalty.
Sophisticated and developmental technology is enabling the rapid development
of smart cities. Smart cities will provide new opportunities for energy firms to
develop their operating models, demanding new skills from their workforce. Energy
companies will be competing with alternative industries. Although talent strategies
will differ across industries, total rewards will become key as energy companies pivot
into other areas.
Hydrocarbon fuel usage is likely to fall away and the market share of oil and gas firms
which are unable to develop a sustainable business model focusing on renewables,
will be limited to select geographies and reduce substantially.
“The value of carbon
set to increase
competition to secure
continue to motivate
evolution across the
industry. As insurance
markets join the shift
a lack of coverage will
force firms to develop
their methods and
activities to remain
Well-capitalized firms will have pursued opportunities emerging in renewables, and
smaller players may fall away from the competition; a wave of transactional activity will
restructure the energy industry.
The talent curve is likely to flatten as the current challenges are addressed by the transition
The new technologies and operations will become integral to business models, and
firms will seek to fill new roles. The pace of technological development will continue
to grow exponentially, demanding new skills from the workforce, which will continue
to evolve over time.
Closer collaboration between the education system and the energy industry could
bring alignment to training and education initiatives. STEM initiatives may receive
a substantial uptick in investment and support, as changing operations across the
energy industry demand new skills in increasing volumes of employees as businesses
The industry will be increasingly attractive to new joiners, as technology continues
to advance, salaries increase, and the role of the energy industry becomes more
established as a gateway to fulfil sociocultural obligations.
Renewables with increasing - and potentially a majority - market share, will stabilise
the industry, providing employees with job security as well as opportunities to
develop their skills and progress their career. For firms who fail to invest in progression
opportunities for their employees, competitors with comparable technology and
opportunities and scope, will be more attractive and there may be some exploratory
movement in new roles. Building an ecosystem of collaboration across education
providers, partners, and even competitors could create a flexible talent pool that can
be leveraged in new ways as industry demands change over time.
“Within 20 years, the development of
technology is likely to accelerate the
transition to automation. As business
models change and roles become
increasingly automated, different skills
will be needed. In preparing for this
transition, energy firms will need to
explore whether these new skills are
already available within their teams,
whether any training will be needed
to develop existing skills, or whether
new talent will need to be hired.
When looking ahead to 20 years’ time,
digital readiness will be the difference
between success and failure.”
John McLaughlin, Chief Commercial Officer, Human Capital Solutions, Aon
Energy firms’ readiness to reskill, coupled with motivation to learn and belief
in the ability to change, will be essential for continued success as the industry
navigate rapidly changing sociocultural, economic, political and commercial
pressures. Identifying the skills needed to pursue commercial ambitions will
enable firms to augment their talent strategy and develop an inclusive, equal
and diverse workforce, and leverage the benefits of rising patent values arising
from a diversified team.
Within five, 10 and 20+ years, changing operating procedures and processes will
have an exponential effect, extending across the supply chain. Leadership will
need to be the champions of change. With commitment to innovation, diversity,
equity and inclusion at the highest level, energy firms will be well positioned
to create human capital structures that align workforce behaviours, skills and
values to those which support long-term sustainability.
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