How Workforce Development Impacts Business Results

A paper by Jim Grimsley presented at CERAWeek 2005

Energy and petroleum companies are increasingly reliant on large-scale projects in developing economies. High performance in this environment requires holistic project planning with a special emphasis on national workforce development.

Energy and petroleum companies looking to meet growing energy demands know that prudent exploitation and replacement of their asset base is critical for long-term success. Super-major and independent producers are increasingly depending on an asset base characterized by multi-year, multi-billion dollar projects in remote, developing and technically challenging environments. The planning, construction, operation and maintenance of these assets (e.g., deep-water platforms, liquid nitrogen gas facilities and cross-country pipelines) require holistic project planning and superior execution.

A key, but often underestimated, component of holistic project planning is workforce development. We have found that companies that take a disciplined approach achieve:

• Improved alignment with the host government.
• Lower operating costs.
• Higher return on investment.

Operators’ traditional reliance on expatriates is being challenged as host governments set aggressive local content targets. Those that are able to develop a strategy to meet these targets and align their business goals with the requirements of the host government will achieve high performance.

There are many challenges, not least of which is that national workforces in developing economies seldom have the requisite technical or management skills. However, with careful planning and focused stakeholder management, a win-win solution can be crafted.

First, a national workforce development plan is required that reconciles business and government requirements with national development drivers.

• Business requirements include number and skill level of personnel, cost metrics and production targets.
  
  
• Government requirements include local content quotas and national employment quotas.
  
  
• Differentiators are national development drivers, including level of education, tribal relations, and so on.

The plan must include how the company will recruit, develop and retain national talent as well as measure the effectiveness and progress of the plan:

• Competency model. Define and communicate skills and knowledge needed.
  
  
• Recruiting Strategy. Successful strategies have included pre-hire assessments, international recruiting and university scholarships.
  
  
• Training and development strategy. May include on-the-job training, coaching and mentoring, cultural training and developmental assignments abroad.
  
  
• Retention strategy. May include reward and recognition programs as well as targeted development opportunities for high performers.
  
  
• Measurement. Success tracking includes key metrics to monitor the progress of the workforce development strategies.

Developing and executing a national workforce development plan is complex, but by taking an holistic approach, the priorities of energy operators and governments can be aligned and a win-win solution can be crafted.

Jim Grimsley is a Partner in Accenture’s Energy Upstream practice.