Not every skill has to be owned in-house. Oil and gas companies should consider which skills they want to cultivate through upskilling or retraining, which they can outsource or leverage technology to account for, and which they are better off renting through contingent workers or external partnerships.
What executives are saying
The 2020 EY Oil and Gas Digital Transformation and the Workforce survey (pdf) shows us how leaders in the sector view the need to make digital investments, and how that drives the need for upskilling/reskilling and other talent strategies. Among respondents, 58% said that the COVID-19 pandemic made investing in digital technology more urgent, and 80% are investing at least a moderate amount, relative to their budget, in technology. “The right thing is to invest through the cycle — or even better, to invest counter-cyclically, if you have the magic to be able to do that,” says a digital finance executive of an integrated oil company.
The right thing is to invest through the cycle — or even better, to invest counter-cyclically, if you have the magic to be able to do that.
Yet, workforce skill gaps limit adoption and value realization in many technologies seen as strategic differentiators. For instance, among executives who have put money toward remote monitoring or are planning to, about 1 in 3 say they don’t have the talent to realize the value of their investment. Data analytics is another area of concern, given the central role data plays across the value chain, as is artificial intelligence (AI), crucial for taking full advantage of the sheer volume of that data.
In fact, 43% of respondents cite “too few workers with the right skills in the current workforce” as a major challenge to digital technology adoption (and 51% see it as a minor challenge). Executives estimate that 60% of their workforce needs to be reskilled or upskilled, while 43% actually will be reskilled or upskilled — with 10 months required to reskill the average worker. That’s a major challenge for companies in any industry, and more so for oil and gas executives who lack confidence in training: nearly half (49%) do not believe their organization is good at teaching in-demand skills, just 3% strongly believe their organization is good at it, and 52% do not have a robust plan to reskill.
These executives are bullish on their ability to fill these gaps through hiring, however. Executives expect to have greater access to needed skills in three years relative to current availability.
It’s true that new graduates and existing workers are developing these skills every day, but that’s a reflection of how the demand for this talent is growing, too. The sector will continue to compete for talent with others, yet it faces a perception problem, with younger generations gravitating elsewhere. In a report from 2020, the World Economic Forum pinpointed seven key professional clusters that will be important in the future, focused on emerging tech skills (as well as human interactions), and one of them was the green economy, reflecting a desire to protect the environment.
Talent
60%percent of existing workforces need to be reskilled or upskilled, as estimated by oil and gas executives.
What to do about it
Oil and gas executives can take three actions to power digital integration and invigorate value creation with a human-centered approach.
1. Rethink what skills you prioritize, based on your business strategy
The future of work requires people with different capabilities as well as different mindsets. You may be thinking about “skills” too narrowly or focused on those that no longer align with your business strategy. Hard skills, such as engineering, are no doubt important — but adaptive skills like analytical acumen, creative reasoning, social and emotional intelligence, resilience, and learning agility have grown just as valuable.
When considering technology skills, be sure to balance these with adaptive skills, which are critical to deriving value out of digital programs. Workforces must have the skills to apply technologies as broadly and strategically as possible — relying on critical thinking, creativity, innovation, problem solving, ideation and other adaptive skills — to find and extract every bit of value that emerging technologies hold. “With data more readily available, you’re going to want people to have analytical skills who can draw conclusions from that data to make better decisions faster,” said one IT human resources executive of an integrated oil company.
With data more readily available, you’re going to want people to have analytical skills who can draw conclusions from that data to make better decisions faster.
2. Assess to what degree you have those skills
The next step is to profile and benchmark your people against the future-focused capabilities you have identified with robust, data-driven assessments. These should score an individual’s capabilities and potential across metrics such as adaptability, cognitive skills and personality.
This effort surfaces areas of strength and development for your workers and guides them toward their own personalized learning plan. It also measures your company’s levels of maturity and the availability of critical skills — overall, in your workforce and in local markets — giving you better insight into mobility and hiring decisions. As a global CIO of an integrated oil company put it: “Once you understand what your gaps are today and going forward, then you can make some choices about how you want to fill them and prioritize them.”
Once you understand what your gaps are today and going forward, then you can make some choices about how you want to fill them and prioritize them.
Not every skill has to be owned in-house. Oil and gas companies should consider which skills they want to cultivate through upskilling or retraining, which they would recruit for, which they can outsource or leverage technology to account for, and which they are better off renting through contingent workers or external partnerships.
3. Determine the tools, partnerships and other resources to help drive this transformation
For skills that companies are determined to grow organically, internal coaching and mentoring is a powerful and affordable way to drive meaningful, tailored development, combining formal learning with on-the-job experience. Your company may have existing programs that can be updated to account for different business needs and skills. External accredited coaching, in-person or through webinars, can also be a powerful differentiator.
Determine what learning opportunities can be tailored to your workers’ needs and roles. You can also explore external groups for more targeted or accurate development initiatives. External companies are offering suites of content to suit different proficiency levels, often with video and interactive elements.
Badging programs, in which professionals work through set development plans on a given topic and earn badges signifying levels of proficiency once milestones are reached, have proved to be successful at many companies, including at the EY organization. Topics can include adaptive skills, such as design thinking, alongside digital and technical skills, including those used in AI, IoT and cybersecurity.
Conclusion
To navigate the uncertainty and disruption brought by changing market conditions and COVID-19, companies will need to secure competitive advantage by accessing the skills capable of delivering digital transformation. Technology and markets are evolving so quickly that the three-year outlook of our survey is better seen as a gauge of the extended present rather than a near future, and the conclusion is obvious: companies must dedicate meaningful resources to reskilling
Summary
To what extent does your company have a plan around not just the technical side of work but also the skills side? Getting the most out of your technology investments requires maximizing the value of your people. A human-centered approach pays off when you need it most: now and in the future.
