The oil, gas and energy sectors are entering a period of profound change, shaped by decarbonisation and the drive to establish more efficient operating models. This includes adopting new technologies like artificial intelligence, automation, augmented and virtual reality.1
These winds of change are creating real challenges for operators and contractors. Arguably their biggest one is acquiring and retaining the talent they need to adapt and thrive in this operating environment.
In fact, industry experts suggest this transformation of a heavily regulated industry with long-established working practices will create huge demand for new skills by 2025. It’s thought that the oil, gas and energy industry will need to hire 25,000 new people over a six year period, including 4,500 for roles that don’t yet exist in areas such as data science, automation and new materials.2
What’s driving this talent shortage?
With 60% of professionals in the sector already concerned about a talent shortage in 2021, satisfying demand for new skills is already proving a challenge. Increased competition for scarce talent is only likely to make matters worse.3
In particular:
- Technological transformation is driving demand for skills that are not sector specific, which is intensifying competition for talent.
- Sought-after engineering and technical skills are also in demand in the renewable energy sector, resulting in a cross-sector skills gap.
- Environmental, social and governance (ESG) awareness and support for a work-life balance increased during the pandemic, making it harder for the oil, gas and energy sector to attract talent.
- Increased wages since the pandemic is driving greater workforce mobility, which in turn hampers efforts to hire and retain people.4
On the other hand, the rise of technology in the sector, along with decarbonisation is seen by many in the industry as opening up new avenues to growth and efficiency. This helps the industry access talent, a key factor in unlocking potential. In fact, 21% of oil, gas and renewables firms see attracting talent as a key opportunity for the business.4
How can oil, gas and energy contractors compete for talent?
In any sector, there are a number of levers that firms can pull to position themselves as attractive destinations for sought after talent.
Clearly, remuneration – from pay to bonuses – is crucial. However, rates of pay have risen across the oil, gas and energy sectors since 2020,4 and remuneration strategies are easily copied by rivals. This means attractive packages are becoming less likely to enable contracting firms to compete for talent.5
In fact, establishing an attractive employer brand that is in tune with the demands of potential recruits is likely to have a material impact on contracting firms’ ability to attract talent.
To an extent, that means understanding potential new employees’ motivations when accepting new roles, and recent research shows changes here too. These days remuneration is not the highest priority. Considerations like potential for career progression and ESG performance have now become more attractive.6
This has not escaped the attention of hiring managers in oil, gas and energy. In 2022, more than half (57%) reported that their organisations are investing in learning and development as a means to address the skills shortage.4
Looking after employees is becoming a key priority
Equally, according to some experts, employee benefits can play a key role, particularly those addressing health, wellbeing and family. Employee benefits can elevate contractors’ employer brands and also improve social performance as part of the industry’s wider focus on ESG.4
One area that contractors should look at here is employee health and wellbeing at work, particularly given that the latest available data suggests an upward trend in the number of oil and gas workers becoming injured or ill at work across 2020 and 2021.7
According to the HSE, in 2021 there were 16 specified injuries, with 53 over seven-day injuries. In addition, the HSE identified 752 non-compliance issues which were raised with operators and served 28 improvement notices over the same period.7
Clearly, protecting employee health and wellbeing is likely to have a significant effect on employee satisfaction. In turn, it’ll improve a contracting firms’ attractiveness as a potential employer. There are a range of steps that firms can take to help reduce or mitigate the health risks facing employees, including:
- Proactive absence management and health surveillance to promote reduced absence rates, enhance employee wellbeing and increase productivity.
- Employee-related accident benefits as well as medical and vocational rehabilitation to support employees if the worst should happen.
- Convenient, comprehensive and compliant health and safety training for staff, for instance the Royal Society for the Prevention of Accidents (RoSPA) accredited online compliance training programmes.
How the right insurance can help look after your employees
The good news is that strong insurer risk management support is a key benefit of a robust insurance programme. Effective risk management services can help to identify areas of improvement in working practices, thus minimising the risk of accidents and subsequent absence in the work place. It’s therefore important to ensure that your insurance programme is tailored to meet the exposures and key risks within your business.
As part of efforts to develop a more attractive employer brand, contracting firms should also review their insurance arrangements. This will help ensure they are delivering these additional benefits where they can.
Here to help
At Marsh, we have worked with AIG to develop a comprehensive insurance solution designed for oil, gas and energy contractors. Our offering includes RoSPA safety training; health, safety and loss control solutions, cover for accidents and rehabilitation, and much more.
For more information, read about our exclusive insurance solution for oil, gas and energy contractors. Or contact one of our sector experts for advice, guidance or discuss your insurance needs.
Sources
- businessinsider.com/how-virtual-reality-and-robotics-could-advance-the-energy-industry-2022-8?r=US&IR=T
- opito.com/policy-and-research/research/the-skills-landscape
- getireport.com/reports/2021/
- getireport.com/reports/2022/
- hbr.org/2023/01/rethink-your-employee-value-proposition
- getireport.com (GETI Report 2023)
- hse.gov.uk/offshore/statistics/hsr2021.pdf
