Image: General Electric
Read more on the strategies for retaining local talent in the upcoming publication, “African Energy Road to Recovery: How the African Energy Industry Can Reshape Itself for a Post-COVID-19 Comeback,” developed in partnership between the African Energy Chamber (AEC) and Africa Oil & Power. Released in January 2021, the 200-page report maps out the productive recovery of the African energy sector, drawing upon the strength of the AEC’s thought leadership.
The ‘skills crisis’ in Africa is not unique to the continent or to the pandemic: the oil and gas industry has long been struggling to recruit the next generation of workers in a way that preserves talent and prioritizes gender-based diversity. In addition to an ageing workforce, of which an estimated 71% is above the age of 50, the oil and gas industry is experiencing significant structural changes. The replacement of aging assets with modern, technologically advanced systems and machines has created an environment where not only high skilled labor is in short supply; but also, the demand for an entirely new set of technical skills has been created.
For its part, COVID-19 has only intensified this dynamic: the severe contraction of the oil and gas sector has discouraged job seekers from entering the industry. Within the oilfield services sector, increased operational costs, reduced demand and lower profits per employee led to the loss of more than one million jobs in 2020. An industry as dependent on human and resource capital as oil and gas – not to mention responsible for meeting rising global energy demand – cannot afford to lose high volumes of talent; as a result, companies must restructure roles and responsibilities to align with twenty-first century skillsets and cultivate resilience behind their operating models, while employees across industries must adapt to changing working conditions.
Rapidly advancing technologies and remote work setups accelerated by COVID-19 have disrupted traditional job markets and the skillsets needed to compete in them, requiring employers to both re-skill and up-skill employees to generate new solutions in a post-COVD-19 landscape. One such solution is the application of automation and artificial intelligence (AI); contrary to popular belief, automation and digitalization represent an opportunity for spurring job creation and attracting talent, while simultaneously cutting costs. In addition to making existing operations more efficient, integrated and standardized, AI offers the ability to ‘store’ some of the institutional knowledge of retiring employees, while automation renders time consuming, low-skilled job functions obsolete.
Digitalization also plays a role in driving youth participation in the industry. According to a poll conducted by EY in 2019, just six percent of Generation Z respondents and 18% of Millennials considered a career in the oil and gas industry “very appealing.” This is partly due to its association with physical, high-risk and non-technical labor – 55% of respondents cited a “blue-collar” role as the first oil and gas job that comes to mind – as well as perceived environmental detriment, with 23% of respondents considering the industry harmful to the environment.
As a result, oil and gas firms are facing increasing pressure to develop company cultures that align with a younger ethos – one that accounts for environmental, cultural and social disciplines; that grants autonomy to employees to work independently and/or remotely and that creates enabling environments for young, skilled and diverse talent that can compete with in-demand jobs in IT, healthcare and finance. Last but not least, a critical step toward generating a more dynamic workforce will be gender-based diversity and inclusion.
According to a study conducted by McKinsey in May, women make up just 15% percent of the oil and gas workforce globally; 17% of the power and utilities sector; and 32% of the renewable energy workforce. Within Africa and the Middle East, women comprise nine percent of senior management positions in the energy sector, with gender diversity decreasing with seniority. Women make up less than eight percent of technical jobs in the oil and gas sector, and just nine percent of management positions in the utility sector. Mentorship, on-the-ground job training and early career exposure have all been identified as key success factors to female employment within the industry, along with access to education, specifically in the fields of science, technology, engineering and math.