The wealth of knowledge and experience held in the highest leadership positions in oil and gas is an asset. There is no doubt that industry leaders in the sector demand the highest reward and bonuses for the talent they bring. Before we talk about succession planning, we must acknowledge the benefits of having this bank of leadership in place.
However, to rely on a generation of leaders is a short-term perspective for an industry that needs a far-sighted vision. Visionary leaders understand that they will at some point retire and seek other challenges. It is at this point that the strength of your succession planning will come to the fore.
The risk of leadership dry-up
In March 2019, Finance Monthly cited the drying well of talent as a significant threat to oil and gas. Although the financial experts suggest this is a problem across industries, the ageing talent in the oil and gas sector makes it more acute. In an attempt to attract the best people from a small pool, companies in the sector are offering higher base rates and incentive packages to those choosing this sector. Although this seems like a sound strategy, it still doesn’t resolve the problems higher up in the organisation. Development of this new talent to the sector will take a while to filter up to leadership.
Ironically, it could be argued that the strength of oil and gas management of operational efficiency is a significant factor in demotivating those hoping to move forward in the sector. The lack of empowerment of employees to manage the working environment and take personal accountability leads to a significant proportion of employees feeling less engaged at work. The reason offered by those working in the sector is a lack of focus on developing expertise beyond their current skill set.
Competency development and talent management programs
If the lack of engagement of employees derives from a sense of being stuck in a rut, then the answer to morale and succession planning is to invest in HR schemes. Optimising your human capital needs to become as essential as extracting raw materials from your reserves.
To start your drive of succession from within your organisation, you need to begin with a talent audit. You should formulate an overview of the current state of play. From this, you will be able to envision the way it needs to be. Individual employees will be aware of their strengths, and you will have uncovered areas for development. Where there are significant areas of weakness across the company, you can counter the threat with a competency development scheme.
However, for a serious commitment to creating a pipeline of leadership to your highest positions, you need to see this as a matter of talent management. It is more than just the strategic management of the resources on the ground. You need to commit to a program that takes skilled and expert employees and offers them the tools and qualities required to move upward within your company. This is especially important when the profile of tech-enabled workers is changing. Soon the traditional roles of subsurface and surface engineers will be replaced by experts in digital operations.
The essential takeaway
The oil and gas sector may be dominated by an environment of downsizing, mergers and acquisitions and restructuring, which makes the management of HR succession challenging. However, it is essential to work on people engagement and challenge yourself to create a company culture that promotes personal growth.