How Energy Companies Can Attract and Keep Top Talent
Tips for addressing energy's looming talent deficit.
As energy executives are well aware, their industry is facing a major talent deficit. By 2025 over 50 percent of the engineering workforce will be eligible to retire, creating gaps in the talent pool and a major loss of experienced technical knowledge and skills. As a result of industry downturns in the 80s and 90s, the energy sector has not cultivated an adequate supply of talent to fill critical technical and middle management roles. Finding essential skills to deliver on strategies has become a “top five” concern among energy CEOs.
As the statistics begin to impact the daily workplace, much has been written about fighting “the war on talent.”
Companies recruit aggressively and one-up the competition with more attractive pay and benefit packages. At best, this is a short-term, piecemeal fix. Such reactionary measures leave companies at the mercy of external forces when they could have much stronger, more sustainable control of their destiny by optimizing their internal talent management practices.
A better solution to the talent shortage is to look within and plan ahead, applying best practices that work both immediately and long-term in recruiting and retention. Making incremental improvements that build on your strengths, and being diligent in applying practical wisdom may not be sexy and it’s not rocket science. But it works.
We suggest 3 essential strategies to get started.
1- Get the Basics Right
The most effective recruiting efforts begin by getting the fundamentals—recruiting processes and talent sourcing—right. And then putting them to work.
One of our global technology clients was competing across its industry for technology talent, and was struggling with losing candidates during the recruiting process. We helped them discover that they had too many interviewers involved, resulting in lengthy recruiting cycles and a poor candidate experience. Basic process improvements, such as a preparation meeting and panel interviews, dramatically shortened the process and improved the candidate experience.
It is also critical to develop a sourcing strategy that targets pipelines for critical roles. According to a recent Point B survey, 30 percent of companies had not defined a sourcing strategy at all. Energy companies can optimize sourcing by making more targeted efforts to seek out potential recruits from other industries, especially for functional and back-office roles. A common weakness of employee referral programs is encouragement of across-the-board referrals, failing to target specific roles or levels. Your company may benefit much more from focusing referral campaigns on the employees most likely to be connected to the target profile. Together with tailored incentives, such targeted referral campaigns can have immediate impact.
2- Give Talented People Good Reasons to Stay
Does your organization give people compelling reasons to stay? Studies on the cost of employee turnover vary, but range between 20 to 100 percent of annual salary, if not more, depending on the area. In the energy industry where business critical engineering skills take years to develop, this cost is even greater. It pays to focus on keeping the key talent you have.
Inadequate internal advancement is a top driver of employee attrition—particularly among early-career professionals who often have high expectations and short time frames for development. Look for opportunities to beef up your development, job shadowing, and job rotation opportunities, and eliminate legacy barriers such as time-in-job requirements. Strengthen your programs for talent development and internal mobility. Look for ways to market internal job opportunities more effectively. And make it easy for internal talent to find and explore these opportunities. One of our clients is improving its systems and tools to enhance internal career movement and increase retention. The new process is easier—both for the company to find skills internally and for internal candidates to take the next step in their careers.
You can also improve retention and internal recruiting by proactively developing skills that your organization needs for the future. Cross training and job rotation early in a career can build transferrable skills. One company we worked with in the technology sector bolsters its pipeline of future talent by focusing on highly versatile skills and competencies, such as problem solving and learning agility, so that employees can more easily succeed in different roles. Employees with broad skills can adapt to evolving business needs effectively (more so than those with a very specific technical profile that may rapidly become outdated), positioning them to be the next generation of leaders.
3- Think Holistically About People Practices
An intervention to attract or keep talent will only be effective when it is aligned with other talent efforts and stays focused on specific business imperatives. Leading companies develop an integrated talent strategy that considers how each program along the employment lifecycle contributes to business goals.
An integrated talent strategy includes prioritized goals and plans for recruiting, onboarding, development, performance management, retention and succession planning. Start by mapping a clear set of priorities for the business along the end-to-end talent lifecycle. This helps to reveal any gaps and identify where improvements are needed.
Mergers and acquisitions are a key growth strategy within the energy industry that highlights the importance of having an integrated talent strategy. When the business priority is to grow through acquisition, yet the organization is already struggling with retention, recruiting and engaging key talent can become an ever-increasing challenge.
We recently helped a fast-growing organization define a five-year strategic plan for talent management. The plan includes an overall “people vision” closely tied to the business vision along with specific goals, actions, accountabilities and success metrics for each talent program. By ensuring these programs were aligned to business priorities, the plan mitigated the risks of decision making focused too narrowly on one topic.
The ability to get, and keep, the right talent is all about focus and follow-through.
Develop a sourcing strategy that targets the specific roles you need to be competitive. Streamline the recruiting process to reduce time to hire. Bolster skills development through career opportunities that give people good reasons to stay. Above all, think holistically, with “people” programs that work together and support a cohesive talent strategy aligned with your organization’s strategic goals.
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