Talent Void, A Top Five Business Issue for Oil and Gas Executives, According to Ernst & Young and Rice University Survey
12 Mar 2008 12:00 Africa/Lagos
Talent Void, A Top Five Business Issue for Oil and Gas Executives, According to Ernst & Young and Rice University Survey
Competition among peer companies a significant issue; Ernst & Young offers solutions
HOUSTON, March 12 /PRNewswire/ --
Nearly 90% of senior human resources (HR) executives at 22 top international oil and gas companies believe their industry faces a talent shortage and call the problem one of the top five business issues facing their companies. Working with Rice University, Ernst & Young LLP recently surveyed HR executives in the oil and gas industry to glean insights on the challenges of workforce recruiting and retention and how to overcome these challenges. Nearly all (88 percent) of the respondents agreed the shortage has the potential to impede growth and financial performance.
Respondents were asked to rank the following issues on a one to 10 scale, with 10 representing a significant problem:
-- Corporate growth as a result of inability to staff projects = 7
(average score)
-- Financial performance due to rising costs = 6
-- Innovation = 6
-- Operations/safety = 6
-- Corporate reputation = 5
"It is clear that the talent void in the oil and gas industry has transformed from an organizational challenge into a critical business issue," said Dina Pyron, a leader in the Human Capital practice within Ernst & Young's Global Oil & Gas Center. "The lack of key talent could potentially impact corporate growth, financial performance, safety and reputation. This should raise a red flag to leadership that immediate and innovative solutions are necessary."
According to the findings, the greatest threat to recruiting and retention is competition from counterparts within the industry. Respondents ranked competition from peer companies an eight out of 10, with 10 representing a major challenge. Also nearly unanimous was the industry's response to the problem: increased compensation. Eighty-eight percent of respondents cited increasing compensation as their primary solution to keeping and attracting talent.
"Compensation is important, without a doubt, but the survey results show there is a real opportunity to do something different, stand out from the competition, lure new recruits and create loyalty among existing employees," said Bill Lee, associate dean of executive education for Rice University. "The first company with a break-out strategy could position itself as the leader in a highly competitive recruiting and retention environment."
Some new approaches to turning the tide on the talent shortage include:
-- Focus on the next generation. Ernst & Young suggests looking beyond
Baby Boomers and focusing on recruiting and retention strategies
designed for Gen X and Gen Y.
-- Recruit in bulk. Expand and diversify recruiting methods. Hiring in
bulk and providing training programs for a variety of areas can improve
and diversify a company's talent pool.
-- Customize culturally appropriate approaches. Seventy-six percent of
respondents said retention issues are different around the world for
their company. Oil and gas is a global industry with a global workforce
and a one-size-fits-all approach does not work.
-- Leverage retiring workers' knowledge. Be creative in retirement
arrangements in order to retain intellectual capital.
About the Survey
Ernst & Young conducted 30- to 35-minute phone interviews with 25 high- level human resource executives representing 22 different oil and gas companies with a combined total net income of more than $3.6 trillion. Included in the survey were four supermajors, six exploration and production companies, six oilfield services companies, four natural gas companies, and two refiners. The respondents had an average of 22 years industry experience, and nine years experience with current employers.
About the Global Oil & Gas Center
The Ernst & Young Global Oil & Gas Center brings together the people and ideas that help you successfully address the complexities of today's global oil and gas business. We bring together a global network of energy professionals that can work closely with you to develop coordinated approaches to managing risk, optimizing performance, and increasing your operational effectiveness, while bringing you insights into the major trends that impact your business - both now and in the future.
About Ernst & Young
Ernst & Young, a global leader in professional services, is committed to enhancing the public's trust in professional services firms and in the quality of financial reporting. Its 130,000 people in 140 countries pursue the highest levels of integrity, quality, and professionalism in providing a range of sophisticated services centered on our core competencies of auditing, accounting, tax, and transactions. Further information about Ernst & Young and its approach to a variety of business issues can be found at www.ey.com/perspectives. Ernst & Young refers to the global organization of member firms of Ernst & Young Global Limited, a U.K. company limited by guarantee, each of which is a separate legal entity. Ernst & Young Global Limited does not provide services to clients. Ernst & Young LLP, a Delaware limited liability partnership, is a U.S. client-serving member firm of Ernst & Young Global Limited.
Source: Ernst & Young
CONTACT: Tanya Valle-Batista of Ernst & Young National PR,
+1-212-773-6284, tanya.vallebatista@ey.com; or Katy Hancock of
Fleishman-Hillard PR, +1-214-665-1323, katy.hancock@fleishman.com
Web site: http://www.ey.com/
http://www.ey.com/perspectives
Talent Void, A Top Five Business Issue for Oil and Gas Executives, According to Ernst & Young and Rice University Survey
Competition among peer companies a significant issue; Ernst & Young offers solutions
HOUSTON, March 12 /PRNewswire/ --
Nearly 90% of senior human resources (HR) executives at 22 top international oil and gas companies believe their industry faces a talent shortage and call the problem one of the top five business issues facing their companies. Working with Rice University, Ernst & Young LLP recently surveyed HR executives in the oil and gas industry to glean insights on the challenges of workforce recruiting and retention and how to overcome these challenges. Nearly all (88 percent) of the respondents agreed the shortage has the potential to impede growth and financial performance.
Respondents were asked to rank the following issues on a one to 10 scale, with 10 representing a significant problem:
-- Corporate growth as a result of inability to staff projects = 7
(average score)
-- Financial performance due to rising costs = 6
-- Innovation = 6
-- Operations/safety = 6
-- Corporate reputation = 5
"It is clear that the talent void in the oil and gas industry has transformed from an organizational challenge into a critical business issue," said Dina Pyron, a leader in the Human Capital practice within Ernst & Young's Global Oil & Gas Center. "The lack of key talent could potentially impact corporate growth, financial performance, safety and reputation. This should raise a red flag to leadership that immediate and innovative solutions are necessary."
According to the findings, the greatest threat to recruiting and retention is competition from counterparts within the industry. Respondents ranked competition from peer companies an eight out of 10, with 10 representing a major challenge. Also nearly unanimous was the industry's response to the problem: increased compensation. Eighty-eight percent of respondents cited increasing compensation as their primary solution to keeping and attracting talent.
"Compensation is important, without a doubt, but the survey results show there is a real opportunity to do something different, stand out from the competition, lure new recruits and create loyalty among existing employees," said Bill Lee, associate dean of executive education for Rice University. "The first company with a break-out strategy could position itself as the leader in a highly competitive recruiting and retention environment."
Some new approaches to turning the tide on the talent shortage include:
-- Focus on the next generation. Ernst & Young suggests looking beyond
Baby Boomers and focusing on recruiting and retention strategies
designed for Gen X and Gen Y.
-- Recruit in bulk. Expand and diversify recruiting methods. Hiring in
bulk and providing training programs for a variety of areas can improve
and diversify a company's talent pool.
-- Customize culturally appropriate approaches. Seventy-six percent of
respondents said retention issues are different around the world for
their company. Oil and gas is a global industry with a global workforce
and a one-size-fits-all approach does not work.
-- Leverage retiring workers' knowledge. Be creative in retirement
arrangements in order to retain intellectual capital.
About the Survey
Ernst & Young conducted 30- to 35-minute phone interviews with 25 high- level human resource executives representing 22 different oil and gas companies with a combined total net income of more than $3.6 trillion. Included in the survey were four supermajors, six exploration and production companies, six oilfield services companies, four natural gas companies, and two refiners. The respondents had an average of 22 years industry experience, and nine years experience with current employers.
About the Global Oil & Gas Center
The Ernst & Young Global Oil & Gas Center brings together the people and ideas that help you successfully address the complexities of today's global oil and gas business. We bring together a global network of energy professionals that can work closely with you to develop coordinated approaches to managing risk, optimizing performance, and increasing your operational effectiveness, while bringing you insights into the major trends that impact your business - both now and in the future.
About Ernst & Young
Ernst & Young, a global leader in professional services, is committed to enhancing the public's trust in professional services firms and in the quality of financial reporting. Its 130,000 people in 140 countries pursue the highest levels of integrity, quality, and professionalism in providing a range of sophisticated services centered on our core competencies of auditing, accounting, tax, and transactions. Further information about Ernst & Young and its approach to a variety of business issues can be found at www.ey.com/perspectives. Ernst & Young refers to the global organization of member firms of Ernst & Young Global Limited, a U.K. company limited by guarantee, each of which is a separate legal entity. Ernst & Young Global Limited does not provide services to clients. Ernst & Young LLP, a Delaware limited liability partnership, is a U.S. client-serving member firm of Ernst & Young Global Limited.
Source: Ernst & Young
CONTACT: Tanya Valle-Batista of Ernst & Young National PR,
+1-212-773-6284, tanya.vallebatista@ey.com; or Katy Hancock of
Fleishman-Hillard PR, +1-214-665-1323, katy.hancock@fleishman.com
Web site: http://www.ey.com/
http://www.ey.com/perspectives
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