Due to the nature of the industry and recent trends, oil and gas companies are dealing with some very specific people- management issues.
Sarah McNaught, Head of UK Energy & Natural Resources and Mark Williamson, UK Head of People & Change, explain how KPMG‘s People powered performance (P3) solution is helping businesses in this sector to address their challenges.
Most businesses – and certainly those that have to employ more than a handful of workers – can face a familiar range of people-related issues: finding and recruiting the right people; matching capacity to demand in a volatile marketplace; motivation and reward; and, in the current climate, getting more from the workforce while very often reducing overall costs.
But these common challenges are inevitably overlaid by the individual circumstances of a particular organisation. Historic factors such as mergers and acquisitions, lack of opportunities for promotion, outsourcing activities or redundancy programmes can have a profound impact on people management, as does the ever-present need to shape the workforce to face the challenges of tomorrow. Industry sectors also face their own specific issues. The Oil & Gas industry – with its unique history, structure, geographical spread and regulatory backdrop – is no exception.
In an energy-hungry world, Oil & Gas is an industry defined by exploration and production wherever reserves can be found. In practical terms, this sees companies operating in hostile or difficult environments, ranging from politically volatile states through to physically hostile territories. Equally, the environmental impact of the industry and concerns about climate change have contributed to an image problem. Both these factors – writ large on news bulletins – have made it harder for organisations in the sector to attract and retain workers. Less obviously, under-investment in the past means companies may face a shortage of workers in the 35-45 age group, leaving many organisations with a generational gap in their workforce. There are also skills gaps, generated partly by past decisions to outsource and the ability of the industry to hire in talent. This is compounded by difficulties in attracting and retaining female employees. People management is also complicated by the high cost of expatriates and the requirement of the National Oil Companies and local governments to employ the local populations.
Traditionally companies have tended to address their people challenges on a case-by-case basis, with responsibility for individual projects often split between functions within the organisation. For example, HR often takes the lead on recruitment, retention, and training, Finance may lead on the cost of employment, and Operations focus on issues relating to capacity and flexibility. This risks taking a silo based approach that encourages a focus on single issues rather than the bigger picture. But the reality is that all of these issues are interrelated.
The starting point for P3 is an assessment of the factors affecting people and performance within an organisation. These can be broken down into capability (recruitment and retention); connectivity (engagement); capacity (the ability of the company to meet and adapt to demand); cost (getting more for less); and compliance (embracing all regulatory issues). The key here is to look at how these individual components work together and thus devise a strategy that enables the organisation to create an agile, efficient, motivated workforce. To do this we factor in the unique challenges facing each industry and organisation. For instance, if we think of the Oil & Gas industry, we would look at what the ‘missing generation’ or recruitment issued caused by public perception is affecting capacity and from there devise solutions.
The result of this is a plan that addresses a company’s people requirements, giving HR, Finance and Operations a single view of the challenges and the solutions. The potential benefits feed through to the bottom line by generating improved cost-efficiency, engagement and productivity.
Partner, UK Head of Energy & Natural Resources
+44 20 76943368
Partner, UK Head of People & Change
+44 (0)7767 345602