Headlines abound covering the need to transition to clean energy. Very few, though, cover a key business issue for O&G companies as they seek to transform: their workforce. Yet, addressing the workforce issue is essential for success. We have observed that most business transformations fail because of the inability to execute the change with people.
New workforce skills are essential to help O&G companies with more than just the energy transition. As O&G companies shift away from legacy technology and into the modern digital infrastructures necessary to remain competitive, they will need a workforce that brings digital savvy to all aspects of their operations. Add to that society’s demand for environmental accountability, a growing scarcity of talent and investor apathy. The result is an energy industry tasked with an agenda for business transformation—change that requires a highly skilled, engaged workforce.
We see a shortage of skilled talent across industries, but O&G has been particularly hard hit for two reasons. First, it’s a highly skilled and niche workforce filled with specialized engineers filling complex roles in geophysics, petrochemistry, petroleum geology, drilling, reservoir simulation and artificial lift systems and more.
Second, the energy industry competes for the digital talent it will require with industries like high tech—industries that workforces view as more exciting options. As younger generations continue to make up a large portion of the workforce, they also look for companies who are actively addressing environmental, social and governance issues. Energy companies will need to show shared values with this generation and those to come to attract and retain a qualified workforce.
Reskilling the workforce
Given the shortage of O&G talent and companies’ responsibility to their current workforces, reskilling and new-skilling existing employees may be the answer to filling the talent gap. It’s also less expensive to skill existing employees versus hiring from the outside. Our research and experience have shown that when companies use our proprietary skills ontology approach to upskill employees, they see 6x cost savings versus hiring new workers.
Energy companies employ large internal workforces filled with people who know their company, culture and ways of operating. They will need these workers to help them fill emerging roles, which according to our analysis currently account for 34% of all roles.
the cost savings O&G companies realize by upskilling employees versus hiring new workers.
of all positions in Energy companies are emerging roles that their existing workforce will need to help fill.
Many energy workers are eager to continue to further their careers, using their industry expertise. If O&G organizations can retain these workers and reskill them for a more sustainable, clean energy future, they will have a win/win.
The good news is that with artificial intelligence—a combination of artificial intelligence, data and analytics—energy companies can map out the new roles and skills required far more easily than in the past. Artificial intelligence also allows them to easily update skill and role repositories in real time as the business changes. Data science and skills analytics enable energy executives to map their existing workforces from declining roles to emerging ones, using skills proximity analysis.
More good news—many of the skills needed in the future are grounded in the skills of today. By capitalizing on these skill adjacencies, O&G leaders can help their workforces transition more easily to a new career path.
Our analysis suggests 35-55% of existing petrotechnical skills are close to the skills needed not only for the energy transition, but also for new digital operations. Reskilling can fill the gaps.
Artificial intelligence adds greater accuracy, speed and scale
As energy companies incorporate machine intelligence and automation into their operating models, machines will handle some of the more repetitive tasks previously done by humans, enabling leadership teams to point their workforces toward more intellectually fulfilling and sustainable roles. Artificial intelligence will help them do so more accurately, rapidly and at a scale previously not possible.
Based on robust skill proximity analytics, existing O&G workers have clear career pathways to new, more sustainable roles so they can thrive beyond the energy transition. Organizations who understand emerging roles, articulate opportunities to their workforce and support workers’ reskilling throughout are more likely to retain and attract the talent needed to succeed.
Core operations shifts
Moving away from specialized skills to broader, strategic and analytic capabilities with the ability to optimize across value chains
Supply chain skill shifts
Increasing emphasis on skills such as manufacturing resource planning, advanced inventory management systems and logistics analysis
Data and analysis skill shifts
Increasing emphasis on skills like data science, machine learning and conceptual data modeling
Adopting the science of artificial intelligence
Artificial intelligence allows us to put science to what used to be far less precise and subjective. It allows energy leaders to make workforce planning and skilling an essential, impactful element of an O&G company’s business strategy.
With artificial intelligence, energy companies can create skills maps and skills pathways to move workers from what they do today to what they can do tomorrow based on the workers’ current skills and the company’s unique workforce needs. Consequently, they can provide employees choices for the roles they’d like to move to, as well as presenting the training and education they need to get there.
Tomorrow’s modern workforce begins today
O&G companies can design tomorrow’s workforce today by using artificial intelligence to map the transition while creating a modern learning experience for existing employees. A few first steps can help energy companies start on the right track.
Energy leaders can start to build a more sustainable tomorrow by collaborating with their workforces to understand the skills of the future. Artificial intelligence allows them to maximize the value from their existing workforce data, building on it to ensure people’s interests, skills and abilities are considered. They can help their people map new career pathways fit for the future of the energy industry, with more speed and precision than ever before.