Imagine a future where the next generation of a workforce is less skilled than its predecessor. This is quickly becoming reality for the energy industry.
In recent times, COVID-19 and the oil price have dominated the headlines. While these are pressing issues, there’s another issue bubbling away beneath the surface that could present a greater long-term threat to the industry. The skills gap.
Today, millions of talented people have carved out their career in conventional energy – many of whom are now approaching, or are already enjoying, retirement. Coupled with the fast-paced nature of the energy transition, many leaders believe that the resulting skills gap of today’s workforce could be the single most pressing threat faced by industry.
Did you know that three quarters of managers are over the age of 40?
What’s more concerning is that two thirds are over 50. As a result, it’s expected that around 62% of job openings in this decade will be related to retirement.
Losing valuable insight due to retirement
The world has become increasingly energy driven over the past half-century. As the energy industry has grown, the skills and capabilities requirements of its people have needed to expand at a seemingly exponential rate. Businesses are rightly analyzing and stripping back their process to find and eliminate waste in their operations. We are also seeing a greater adoption of lean and agile ways of working.
Moving forward we need to think differently and innovate if we are going to navigate the challenges ahead in the energy sectors. Workforce development has an unfortunate reputation for being paused when market conditions add extra pressure to budgets. We need to keep targeting the right opportunities to encourage new talent and consistently prioritize people development.
The facts about the skills gap are stark
By 2029 the youngest of the baby boomers will have retired. However, 90 percent of businesses are already reporting that skills shortages are starting to have a negative impact on their business. And 40 percent of respondents to the 2019 Global Energy Talent Index (GETI) survey categorized the situation in their region as a ‘crisis’.
Someone with a 40-year career will have knowledge and experience that is difficult to quantify. They’ll be able to make fast but well-balanced decisions, often under high pressure. If we don’t plan ahead, those skills will be missing in the future, with potentially serious consequences to the business.
The challenge is compounded by the evolving needs of the industry
It’s no secret that the energy industry is being reshaped by a series of megatrends and macro-factors. In recent years we’ve seen an acceleration to rebalance the world’s dependence on high-carbon energy sources in favour of cleaner and more sustainable energy.
It’s also clear that technology and digitalization will play a pivotal role. It’s expected that the impact of these forces will lead to an evolution in the skills makeup of the industry, with around one in four roles current not even existing in the workforce today. Furthermore, to meet the industry’s future output, 75 percent of employers expect their staffing levels to increase in the coming period.
And while a recent Gartner report revealed that nearly nine in ten senior business leaders say digitalization is a priority, only 40 percent of organizations have brought digital initiatives to scale. So there remains a lot of room for businesses still to explore in the digital space.
The COVID-19 pandemic has already accelerated the digital journey for many. It has also redoubled the focus on localization strategies, as international travel has been restricted.
Talent management will become a key success factor
The next generation of talent coming into the industry is accustomed to a different model of learning. Industry is playing catch up with many schools and universities in how technology is used in education. And it offers the potential for powerful return on investment for a whole array of learning experiences. This is something that the Worley Academy is already starting to do through online webinars, panel discussions, and other bite-sized rapid learning content, designed to appeal to how future generations prefer to learn.
How are you futureproofing your workforce?