New world. New skills: Preparing your workforce for the energy transition

In the final installment of our three-part article series, we continue our conversation about the role of Canadian oil and gas in the global energy transition.

How can the Canadian oil and gas industry prepare its workforce and leadership with the skills they’ll need for the future?

At a glance

New technology is only as good as the people who use it, and that means the digital revolution we’re seeing today in oil and gas also demands a workforce transformation.

Creating opportunities for people to gain and apply new knowledge is essential, and when done correctly, the process will help workers convert new skills into productive results.

Given our economic uncertainty, it will be crucial for many energy organizations to start with the part of their workforce transformation journey that will make the most impact.

The transformation imperative

From automation to artificial intelligence, emerging technologies are changing the oil and gas industry as we all move toward the global energy transition. Progressive companies are implementing digitization projects and adopting smart tools to boost performance, improve efficiencies and reduce emissions.

But new technology is only as good as the people who use it, and that means today’s digital revolution also demands a cultural revolution throughout the organization. This revolution should start at the top, with leadership embracing innovation and more agile ways of working than they may be used to. And as the revolution works its way through the organization, it should be about developing a process for identifying the skills the workforce of the future will need and empowering your people to begin their learning—or upskilling—journeys.

Upskilling is more than just retraining workers. It’s about organizations creating opportunities for their workforce to gain knowledge, learn new tools and put the learning into practice so they’re empowered to deliver differently. Upskilling starts with assessing what knowledge, skills and experiences the company will need, identifying those who are most likely to excel in transformed roles and then developing a training program that expands people’s capabilities and employability to meet the evolving needs of the industry or sector.

It’s about bridging the gap between the skills people have and those they’ll need in an increasingly digital world—building a culture where learning can happen and be applied.

Creating these opportunities to gain and apply new knowledge is an investment, but it’s essential. And when it’s done correctly, the process will help workers convert new skills into productive results. An analysis by PwC Luxembourg on the return on investment from upskilling showed a yield of at least US$2 in revenue or savings for each dollar invested.

Upskilling is more than just retraining workers. It’s about organizations creating opportunities for their workforce to gain knowledge, learn new tools and put the learning into practice so they’re empowered to deliver differently.

Talent challenges—now and in the future

Even in our current uncertain economic environment, we’re continuing to see a significant shortage of qualified talent for new roles that are constantly emerging. In our 22nd Annual Global CEO Survey, 76% of respondents from the energy, utilities and resources space expressed concern about the availability of skills, particularly digital skills, in the marketplace. It’s becoming increasingly difficult for those in the energy industry to find—and retain and engage—talent with key skill sets, including digital business strategy and data analytics.

While the energy sector is aware of its talent challenges, so far it hasn’t taken sufficient steps to tackle the problem. In Canada, 52% of CEOs say attracting and developing talent is a key to success, but only 18% cite significant progress in establishing an upskilling program. Some players in the industry plan to address the shift by hiring the necessary expertise from outside the company. While there’s some opportunity to do so, the industry won’t be able to hire its way out of the problem.

One of the biggest long-term talent issues facing the energy sector is a decrease in the number of young workers entering the field. A significant number of new graduates, who are entering the general workforce fully immersed in digital technologies, dismiss the idea of working in the oil and gas sector because of its image. In a recent PwC global survey, millennials rated the industry as the least appealing, ranking it behind both the defence and chemical sectors. These results suggest oil and gas companies will need to work harder to communicate to millennials and Gen Z the rewards and personal benefits offered by a career in the industry.

It all comes back to the culture change we’ll need to see in oil and gas organizations as they move into the future. Organizations must work harder to articulate their purpose and goals in this new world of work to attract and retain the talent they’ll need to be successful. They need to promote the culture of efficiency and environmental responsibility they’re already building using technology and innovation.

Next steps

So where should energy organizations looking to move their companies into the world of the future start their workforce transformation? The first step is for leadership to recognize things need to change. And then the organization needs to look at transformation in terms of the entire employee value proposition, which is really about why your employees come to work every day. Any change must be incorporated across the whole organization to be successful and lasting.

It’s important to note workforce transformation can—and should—be an iterative journey. If your organization doesn’t have the capacity in the short term to transform itself entirely, consider starting small, with just one of the steps of what may ultimately become an end-to-end transformation. You could perform an upskilling assessment to understand what skills are needed, develop a business case, build the assets or capacity to do the actual learning or even redesign your workforce strategy.

Given our current economic uncertainty, it will be crucial for many Canadian energy organizations to figure out what part of their workforce transformation journey will make the most impact and start there. This is truly about progress—not perfection.

The bottom line

Energy companies need to recognize they face fierce competition from other well-paying industries. No matter what happens economically, the Canadian oil and gas sector must keep investing in a wide range of talent strategies.

“Automation and digitalisation will improve operational efficiency, but if companies don’t move fast enough to implement new technologies and grow their talent pool, the consequences could be painful,” the 2019 Global Energy Talent Index report noted in its assessment of the oil and gas sector.