Christiane Spitzmueller, Professor, Industrial Organizational Psychology and Hayley Brown, Founding Partner, Impact Diversity Partners LLC
Forbes, February 1, 2019.
There is much talk about the shortage of talent to fill jobs in the energy industry. Known as “The Great Crew Change,” over half of the energy workforce will be retiring in the next seven years. Even as hiring has slowed in the face of moderating oil prices, companies have only been able to hire one new employee for every two exiting the workforce. Who will fill these positions? Perhaps not young people.
An EY poll reveals that only 18% of Millennials and 6% of Gen Zers found a career in oil and gas to be very appealing, with many young people viewing the industry as dangerous, unstable and bad for the environment. This has resulted in, among other things, companies such as Statoil actively rebranding to alter their organizational attractiveness. As jobs requiring STEM degrees skyrocket, more industries are competing with oil and gas for STEM candidates. Many of these industries offer more work-life balance and inclusivity than oil and gas, which are more attractive to younger employees than a large paycheck (which the competition also offers).
How is gender and ethnic diversity impacting the talent shortage in the energy industry?
Young talent and diverse talent are increasingly becoming one and the same. Therefore, in order to court young talent, energy companies must embrace the full breadth of diversity in the workforce, something which most have failed to do so far.
For example, African Americans account for only 6.7% of the current energy workforce, compared with 12% of the US workforce. The workforce disparities are even greater when it comes to women. In 2015, women constituted 47% of the US workforce, but made up only 17% of the energy industry. A 2017 collaboration from the World Petroleum Council and The Boston Consulting Group stated that “women [in oil and gas] account for a significantly smaller share of the workforce than they do in almost any other sector.”
In fact, at a recent event hosted by the International Association of Drilling Contractors in Galveston, TX, an energy company manager told the room that “offshore rigs and makeup just don’t go together.” The energy industry must act swiftly and strategically if it hopes to catch up to its competitors’ efforts to attract an increasingly diverse talent pool.
- Acknowledge there is a problem and measure its magnitude and price
Each energy company experiencing talent shortages needs to take a critical look at its workforce demographics. Are women, African Americans and Hispanics represented in newly hired cohorts in percentages that resemble their representation at the institutions from which they are recruited?
Are organizations losing talented women and employees from historically underrepresented groups because they are less likely to be promoted or recognized for high performance? Is there representation across all types of executive ranks? What are the costs associated with your talent shortages?
Research suggests the economic benefits of highly diverse teams are significant and that there is indeed a cost to a lack of diversity. However, organizations cannot measure the full extent of their problem or the impact of any progress made without rigorous metrics and analytics. Companies must go beyond simple diversity snapshots to discover exactly where the problems and successes are occurring. In the words of Peter Drucker, “What gets measured gets managed.”
- Promote an inclusive environment through diversity ally training
Recruiting more diverse employees will have limited impact in organizations that lack inclusive cultures. In order to retain those employees, organizations must educate their current workforce on the value of diversity and how their behaviors can contribute to an inclusive climate.
Trainings that hope to improve culture by increasing awareness of implicit bias are commonly used but not universally effective and may even result in diversity backlash. If increased awareness, on its own, were enough to eradicate bad behavior, smoking would have died out long ago. Based in research on behavior change, diversity ally trainings focus on teaching actionable behaviors that create change as well as on the value those behaviors produce – the why and how of inclusion.
- Focus on organizational and systemic changes that benefit everyone
Sustainable inclusivity can only be gained by ensuring transparency and accountability in policies, practices and organizational systems. For instance, determining whether organizational policies impact diverse employees differently from the remainder of the workforce is critical. Are recruitment practices truly evidence-based, with the goal of predicting job performance while maintaining access for candidates from varied backgrounds? Are systems in place to secure equal access to career development networks and opportunities?
If energy companies are to compete for future top talent, they must commit to action now. Organizational change takes time, and time is not a luxury that the energy industry can afford it if plans to be ready for the nation’s first majority minority workforce. Or for the great crew change.
Christiane Spitzmueller, is Professor of Industrial Organizational Psychology at the University of Houston (UH), where she conducts research and teaches graduate and undergraduate courses in technical training and occupational health psychology. Through her research, she has examined mentoring solutions and workforce nationalization programs across national contexts. She has served as a visiting faculty member at Goethe University Frankfurt (Germany) and at Lagos Business School (Nigeria) and is a recipient of a Fulbright Scholarship. She has conducted research for the World Health Organization, the Global Fund and companies including BP and ExxonMobil. She currently serves as the Director for the Center for Applied Psychological Research at UH, is a member of the National Academies of Sciences, Engineering and Medicine’s consensus study on mentoring in STEMM. Dr. Spitzmueller received her Ph.D. in Industrial and Organizational Psychology from Bowling Green State University.
Hayley T. Brown, is a founding partner with Impact Diversity Partners LLC.
UH Energy is the University of Houston’s hub for energy education, research and technology incubation, working to shape the energy future and forge new business approaches in the energy industry.