the pipeline - Hay Group

©2013 Hay Group. All rights reserved 1

Oil and gas sector viewpoint

Filling

the pipeline How oil and gas leaders can engage, enable and retain technical experts

The oil and gas sector relies on highly prized, highly paid technical experts; yet worryingly, Hay Group’s research suggests that sector organisations are struggling to secure the commitment of these specialists. With engineering, geotechnical and petrotechnical skills increasingly in short supply, how can firms fend off fierce competition to retain this key talent? >>

The impact of low engagement and enablement To be effective, employees need to be highly motivated (engaged) and ably supported (enabled) to perform their best (see fig. 1). This means placing the right people in the right roles; creating efficient work processes; fostering a supportive and collaborative working environment; and providing the tools and structures to allow employees to do their job.

Low High

Here in this report we explore the data in more detail, the areas that may be contributing to the engagement challenge, and the ways organisations can address these and retain key talent.

Without these enabling factors, even the most engaged workers will eventually become frustrated. Unfortunately, these employees are often an organisation’s crucial high-performers. They are extremely motivated, but discouraged by the barriers preventing them from doing a good job, they will be quick to leave (approximately 18 months to 2 years).

Enablement

Our analysis shows that the sector scores 13 percentage points less than the high-performing companies for staff intending to stay with their employer for more than five years. At a time when key technical skills are in demand, companies risk losing key specialist experts. And when talent leaves, engagement, morale and productivity often follows.

According to Hay Group’s wider research, firms rated highly by employees for both engagement and enablement are five times more likely to exceed performance expectations than those who are merely engaged.

Low

Hay Group works extensively with clients on employee engagement research, with over 15 millions respondents in our database. When we compared data from oil and gas employees against 40 high-performing companies – firms that consistently achieve around twice the global average return on investments, assets and equity - the results show an engagement challenge.

High

Engagement Detached

Effective

Low engagement and high enablement

High engagement and high enablement

Ineffective

Frustrated

Low engagement and low enablement

High engagement and low enablement

Fig 1. Engagement and enablement model

©2013 Hay Group. All rights reserved

2

Terms of engagement: Oil and gas

Our research findings The engagement challenge Oil & gas employees rate their organisation lower than those at the world’s high performing companies by:

8%

for their ability to retain talent

13%

for staff intending to stay with the company for more than 5 years

However, employees rate their organisation similar to or above the world’s high performing companies for:

U

recommending the company to family/friends as a place to work

VVV

VVV

the ability of the company to attract high quality employees

What is contributing to the engagement challenge? Oil & gas employees rate their organisation lower than those at the world’s high performing companies by: Minimal reward and recognition

Ineffective leadership

12%

9%

for overall trust and confidence in senior management

for managers consistently acting on what they say

6%

for how effectively their company is managed

11%

12%

for linking pay to performance

for recognising good performance

Limited career advancement opportunities

Lack of training and development

7%

7%

8%

for giving clear and regular feedback

for providing training to do their jobs well

for managers’ abilities to provide coaching

6%

for opportunities to achieve their personal career objectives

5%

for opportunities for career advancement


3

Focus areas to retain talent Ensuring key technical employees are engaged and enabled is vital to retaining them. It also has a demonstrable positive impact on performance: employees for both engagement and enablement are five times more likely to exceed performance expectations than those who are merely engaged. Based on our research findings, there are four key areas where companies can focus their attention towards in order to achieve high engagement and high enablement (fig 2). 1. Leadership effectiveness nn

nn

3. Career advancement

Trust and confidence in senior management (engagement). Learn from employees what commitments or expectations they feel leaders have not met: is it possible that leaders took action on a commitment but failed to communicate the message to employees? If you are not aware of the status on a given commitment, seek out the information. How effectively the company is managed (engagement). Help people see the bigger picture: regularly communicate the goals and direction of the organisation and how employees contribute towards achieving them.

nn

Recognising good performance (enablement). Celebrate achievement of objectives within your organisation: publicly recognise individuals who exhibit superior performance; clarify the associated behaviours to your team. Pay for performance (engagement). Link salary increases and bonus payouts to individual performance as well as that of your company. Make it clear to employees what they must do to receive a high performance rating.

High Enablement

nn

Career paths (engagement). Identify or create specific career paths for each role within your business: clarify advancement and lateral transfer opportunities available throughout the organisation and share this information with your employees.

nn

Training (enablement). Treat training as a process rather than an event: ensure that training offerings for both current and new employees are adequate to align skills with changing job demands, and ensure work pressures do not stop employees access to training.

nn

Development through feedback and coaching (enablement). Clear and regular feedback is key: provide members of your team with regular, constructive feedback on their performance – both positive and developmental; develop individuals through measures such as coaching or formal development programmes; at least annually, ask for performance feedback on members of your team from individuals they work with.

Engagement

Low

Low

Achieving personal career objectives (enablement). Keep in mind people’s career aspirations: talk to individuals to review current performance and future potential; agree what needs to be worked on to improve their eligibility for future roles/different work.

4. Training and development

2. Reward and recognition nn

nn

High

Detached

Effective

Low engagement and high enablement

High engagement and high enablement

Ineffective

Frustrated

Low engagement and low enablement

High engagement and low enablement

Fig 2. Enabling and engaging employees to retain staff and deliver optimal performance

The game changer: gaining the competitive edge through assessment 4

Terms of engagement: Oil and gas

Report authors Sherief Hammady, director for UK oil and gas consulting Over the past 13 years at Hay Group, Sherief has led engagements with oil and gas, FTSE 100 and large global private sector organisations. This has involved working with senior leaders in the UK, the Middle East and Europe on a broad range of human capital and organisational transformation projects. t +44 (0)20 7856 7054

e [email protected]

Adam Burden, sector leader for UK natural resources Adam works with oil and gas leaders to enhance their organisation’s effectiveness using reliable data, tools and services. His areas of specialism include pay benchmarking, leadership development, job evaluation, and employee engagement. He has developed new tools for the sector, such as Hay Group’s interactive Oil Field Services pay database. t +44 (0)20 7856 7297

e [email protected]

Colin Evans, associate director for reward With over 20 years of experience, Colin advises organisations and remuneration committees on reward related issues, specialising on roles at Board level. He helps companies to design and implement effective policies, plans and processes including corporate governance, disclosure, performance targets, bonus and benefits design. t +44 (0)20 7856 7419

e [email protected]

Lindsay Davidson, senior consultant for employee engagement Lindsay is a senior consultant in Hay Group’s employee engagement research practice, Hay Group Insight. She works with a number of our UK and global private sector clients, including oil and gas, to understand what motivates, enables and engages people to give their best performance, improve decision-making and deepen customer loyalty. t +44 (0)20 7856 7060

e [email protected]

About Hay Group Hay Group is a global management consulting firm that works with leaders to transform strategy into reality. We develop talent, organise people to be more effective and motivate them to perform at their best. Our focus is on making change happen and helping people and organisations realise their potential. We have over 2800 employees working in 86 offices in 48 countries. In the Oil and Gas sector, we work with global and local companies across the industry value chain on a range of diverse business challenges. Our global client list includes integrated oil companies, national oil companies, oil field services, upstream and midstream operators; as well as refineries and petrochemical organisations. For more information, please contact your local office through www.haygroup.co.uk
