The challenges of talent retention in the energy industry
Pete Denham is Vice President of Europe & Africa of Airswift. In this column, he outlines key findings from its recent 2020 GETI report and explains how a post-COVID 19 shift in employee values risks an exodus from the industry
The modern energy workforce is increasingly restless, with a recent report finding that four- fifths of current oil and gas workers are considering leaving the industry. Job security is certainly a factor, with our recent 2021 GETI Report finding that, 69% of power workers and 78% of oil and gas workers feel less secure about their jobs, with the majority attributing this to the pandemic.
Yet, it is also partly attributable to a radical change in the priorities of modern employees in the post-pandemic era. This creates a new imperative to reconfigure the energy industry working environment around appealing to a new, and different, generation of energy workers.
The pandemic also transformed the values of employees in ways that could exacerbate the exodus of energy workers. Rising awareness of collective health and even climate change during the pandemic has accelerated the emergence of a more socially conscious ‘belief-driven’ employee.
Increasingly, these employee values are seen as clashing with the perceived nature of many energy companies. Evidence indicates the pandemic has pushed values such as family, freedom and diversity to the forefront of employee expectations, while transforming health, wellbeing, digitalization and environmental policies into key brand differentiators. This could create a culture clash with an energy industry perceived as traditionalist in technology and less diverse.
How the pandemic altered worker values
Forrester, the analyst house, has long charted the rise in values-based ethical consumers, who increasingly use their buying power to express their social and environmental beliefs. This is mirrored by a similar trend among employees who feel empowered to choose jobs aligned to their beliefs. Evidence suggests COVID-19 is transforming those employee values in ways that could create a major recruitment and retention challenge across the energy sector.
For example, our 2021 Talent Retention report found the disproportionate effect of COVID-19 on minority groups has driven diversity higher up the modern employee agenda. Since the pandemic began, 2 million women have considered leaving or downshifting their careers, while ethnic minorities have been hit hardest by the virus. Sixty-two percent of workers now say they would leave or have already left their employer for a more inclusive one, posing a challenge for an energy industry with just 7% ethnic minority and 22% female representation.
The pandemic also saw workers adopt more caring responsibilities, transforming family life into a key value and propelling family-friendly policies to greater prominence in employee considerations.
Our 2021 GETI Report found that staying close to family and friends now outweighs desire for remuneration among some oil and gas workers and 47% of those who do not want to relocate jobs cited proximity to family. Similarly, stay-at-home policies reinforced a long-running trend in employees valuing home, autonomy and freedom over fixed hours and faraway deployments.
COVID-19 even pushed climate change higher up the employee agenda. Analysts Forrester note that escalating extreme weather events throughout 2020 literally and figuratively brought home the effects of climate change to a population confined to their houses by lockdown. This spurred a rise in environmental consciousness among workers and consumers, posing a risk to employer brands in carbon-intensive energy industries. It is little surprise therefore that our 2021 GETI report found that 79% of energy workers would consider switching to a new sector within the next three years and renewables emerged as the sector of choice.
What’s more, the notion that ‘we are all in this together’ during the pandemic reinforced a sense of shared responsibility for collective health, challenging the energy industry to minimise workplace hazards and long hours. Lockdown restrictions similarly raised awareness of mental health among employees, a particular concern for energy firms with 94% of utility workers recently reporting increased workplace stress.
Stay-at-home orders also rendered workers dependent on digitalization, transforming technological progress into a necessity and a social good. However, this could drive prospective employees away from an energy industry still perceived as technologically regressive.
A fundamental transformation of the energy sector
Cumulatively, these recent changes have moulded a new set of values driving employee expectations, which are ill-fitting with the perceived characteristics of the energy industry. This comes at a time when a digital skills shortage and rising competition for an increasingly restless talent pool has dramatically raised the stakes for employee retention. Keeping this new generation of workers will require a reorientation of everything from workplace policies to performance metrics across the energy industry.
With diversity now a key consideration for career choices, energy firms need to reconfigure corporate culture around pluralism rather than uniformity. Our Talent Retention report notes that one pioneering energy company, Omaha Power District, has created immersive experiences and support networks for diverse employee groups.
This has produced changes from the inclusion of diversity questions in leadership interviews to employee-assisted searches for ethnic minority candidates. It offers an example of how energy firms can demonstrate inclusive values and boost retention and recruitment by giving diverse employees greater representation in decision-making.
In the wake of people spending more time with family during lockdown, energy firms could also re-evaluate workplace benefits and reconfigure brand values around family and flexible working. Traditional benefits such as commuter fee reimbursements and on-site meals could be supplemented with family-friendly rewards such as parenting resources and flexible hours. Instead of focusing solely on financial incentives for relocation, firms could also offer benefits for those that would like to stay close to their families.
With employee health higher on the agenda in the wake of COVID-19, energy employers will also need to demonstrate a renewed commitment to mental and physical health. All benefits should be re-evaluated with emphasis on promoting workforce wellness.
Some pioneering energy and tech companies such as BP and HP now include everything from private mental health coverage to remote nature retreats in their workplace benefits. Even performance metrics could be expanded to include personal development targets such as improved physical fitness, better work / life balance or taking up meditation. Crucially, change comes from the top and leaders must develop and demonstrate greater compassion by connecting with staff at all levels.
Furthermore, the energy sector must overhaul its legacy systems and its associated image of being overtly traditional to retain a workforce of innovators who are increasingly accustomed to remote working. This will also help combat a growing digital skills shortage as the sector undergoes a data and AI revolution.
Where possible, employees need to be given access to the latest technology at work and workplace functions digitalized and decentralised to facilitate remote working. Companies should consider which divisions and departments can benefit from flexible working. This could also help radically reduce the environmental footprint of employee travel, helping retain an increasingly environmentally conscious workforce.
The energy industry stands at a crossroads. Its recent digital transformation pits the sector in a race against other digital-native industries to recruit and retain talent. This means companies are now competing for a more diverse, family-oriented, socially, and environmentally conscious worker who is increasingly values-led in their choice of employer.
As the energy industry transitions from fossil fuels to a sustainable energy mix, the demographics of its workforce will further change to reflect this. The companies that attract and retain this workforce will be those that can design their offering to reflect the permanent shift in the profile and values of its employees that is now underway.