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WECA Executive Interview
Stephanie Del Carpio, Associate Director (People and Talent in Energy)
Published 9 November 2023
How are skills and capabilities changing in the energy industry, and which skills will be most in demand going forward?
Balancing the need for ongoing energy access and security with the need to also decarbonize at pace means both traditional and low carbon skills and capabilities will be required to support the energy transition. At BCG we have identified 15 critical skills and capabilities for the energy industry, 9 of which are expected to make up ~75% of energy requirements by 2050. These include skills like repeatable project management, sustainable operations and electrical engineering, demand for which is expected to increase by ~135% over the next 25 years. On the other hand, more traditional skills like complex mechanical expertise, manual labor and traditional energy trading are expected to decline by ~10%, 20% and 75% respectively. Given these changes, up-skilling and re-skilling the existing workforce, while also securing access to new, low carbon talent should be a critical priority for all energy companies.
What is the perception of our industry among new joiners, and how can we improve it?
We are continuing to see a steady decline in the number of young talents joining our industry with a 60% decrease in the number of petroleum engineers graduating since 2014. Research suggests that this is partly due to a lack of confidence in the long-term viability of the industry, and negative perceptions around environmental and social performance. However, there is room for optimism. While the public perception of the energy industry continues to be challenging, the 2023 WPC Energy Youth Survey found that nearly 75% of 1800+ young professionals and students in the energy industry have a positive perception of it and more than 90% have a positive view of industry decarbonization.
As older workers transition out of the industry, attracting and retaining new talent will become increasingly important. Companies that do this well recognize that what employees value has changed, and that their employee value proposition (EVP) needs to change with it. Reward and a well-known brand is no longer enough. Our research shows that energy employees increasingly value relationships with colleagues and managers, work-life balance and development opportunities over financial compensation. To get their EVP right, companies should take a data-driven approach to co-create and prioritize a portfolio of initiatives tailored to employee segments and continue to review and adapt the EVP to future workforce needs.
The energy industry is experiencing a period of unprecedented change and uncertainty. It is not yet clear which decarbonization pathways and technologies will win and companies must continually review and adjust their strategies and policies to remain relevant. To win in this context, accurately identifying the skills and capabilities required in the future is both more challenging and more important than ever.
What is the value of diversity in energy, and why are we still getting it so wrong?
The benefits of diversity, equity and inclusion (DE&I) are clear. Companies that embrace DE&I leverage the power of varied experience and talent to foster the innovation and creativity required to solve complex problems related to energy security and the energy transition. Furthermore, gender diversity is also linked to improved financial performance. Analysis from the BCG and WPC Energy Untapped Reserves 3.0 report shows companies with above median representation of women in senior and executive roles benefit from higher returns on equity than their peers. Of course gender is only one aspect of diversity, it is the one we will focus on today.
Despite these benefits, the energy sector continues to lag behind in gender representation and has shown slow progress. In 2023, women’s representation in the energy sector was 24% and 23% in oil and gas, up only 1% from 22% in 2020. These statistics reduce further to 20% and 19% when we look at women in senior and executive level positions.
While both men and women are broadly aligned on the challenges that can limit women, they continue to attribute different root causes. 66% of men say the main challenge is a lack of qualified women in the industry while 66% of women believe the issue is women being overlooked for promotions. So how can we address both these challenges? Interventions that have the highest correlation with improved female representation include flexible working policies, equal access to job progression opportunities, leadership commitment to DE&I and targeted recruitment mechanisms such as STEM outreach and balanced interview candidate slates. Clearly there is a lot more work to be done across all of these areas to drive DE&I.
What is the one piece of advice you would give energy companies as they seek to future-proof their workforce?
Three words; strategic workforce planning. The energy industry is experiencing a period of unprecedented change and uncertainty. It is not yet clear which decarbonization pathways and technologies will win and companies must continually review and adjust their strategies and policies to remain relevant. To win in this context, accurately identifying the skills and capabilities required in the future is both more challenging and more important than ever.
At its most simple, strategic workforce planning starts by defining job clusters, simulating workforce supply and demand per cluster, identifying key gaps and risks and developing HR measures to address them. However, companies that are doing this well are also investing in organizational jobs-skills matrices and individual skills mapping to identify what skills are needed to excel in a given role and what skills are available in the workforce today. Armed with this information, companies can identify which adjacent roles current workers could do, and what upskilling would be needed for them to execute them well. As a result, companies are better able to re-train and re-deploy select employee groups, improving retention of critical organizational knowledge and avoiding the high costs associated with attracting and hiring new workers.
At the World Energy Capital Assembly 2023, Stephanie Del Carpio will be speaking on Boston Consulting Group (BCG)'s Talent Focus session, which will be looking at attracting and retaining a diverse, skilled and motivated workforce in a rapidly changing industry.
BCG are also taking part in the North Sea Focus panel session entitled ‘The North Sea Rollercoaster: From Fiscal Instability to Exploration Success and CCS Commitments, What Can We Expect from the North Sea in 2024 and Beyond?' which will look at the opportunities that we should be taking note of both on the NCS and in the UK North Sea and who are the key players, and much more.
Boston Consulting Group is a Knowledge Partner for the World Energy Capital Assembly and the North America Energy Capital Assembly.
Visit their website here
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