Human

HR Managers in difficult times

 By Chris Dalby

In a time of uncertainty for the oil and gas industry, every company from supermajors to newly fledged players faces this challenge. How can resources be most efficiently organized? How are organizations maximizing contractor value in stressed times? Which mechanisms can reduce the costs of training while still ensuring competency? Chris Dalby looks at how the oil industry is actually developing the best practices it needs to sustain its HR practices in the future…

(Cover photo by www.talentegg.ca)

In a time of uncertainty for the oil and gas industry, companies have still found ways to evolve new best practices, finding new ways to ensure profits remain as high as possible.

A survey by the Eventful Group in 2015 found that “organizational culture and change management amidst chaos” was the number one concern among companies in the sector at this time.

Every oil company, from supermajors to newly fledged players, now faces this challenge. How can resources be most efficiently organized? How are organizations maximizing contractor value in stressed times? Which mechanisms can reduce the costs of training while still ensuring competency?

Innovative strategies to answer these questions are also increasingly placing HR divisions in the limelight. The role of HR divisions in preparing their companies for lean times is often understated. The unique skillset of engineers, scientists or geophysical experts see their independence assured. However, HR managers are often thought to be simple executors of orders from above. This could not be further from the truth.

According to PWC back in 2013, “83 percent of (oil and gas) chief executives stated that their companies need to change their talent management strategies in order to remain competitive. However, only a minority feel they have the human resource (HR) information they need.”

Oil and gas chief executives are well aware that the need for detailed and innovative HR strategies, and the personnel needed to oversee them, are essential given the unique challenges facing the industry.

For example, the price crisis has exacerbated the knowledge divide facing many companies. A generation of oilmen is currently retiring and a skills shortfall has made itself felt. A number of companies are retaining engineers of retirement age to ensure the training of those following in their footsteps is complete. The task of reducing this gap falls to HR departments.

At the other end of the spectrum, rapidly evolving technologies such as drones, spectroscopy and robotics are calling for skillsets that oil companies have never needed before.

Eni, the Italian energy conglomerate, has taken a two-pronged approach to this challenge. The first is to develop HR best practices with the company’s overall business strategy. ” We decided to leverage primarily the development internal talents, capitalizing the value of selective acquisitions from the renewable technologies market. These investments have allowed us to acquire staff we were lacking, but also to invest in people who can rapidly integrate themselves in the company and convey their knowledge to others,” explains Grazia Fimiani, Eni’s Director of Human Resources and Management.

Imagine by www.huffingtonpost.ca

Although its hiring has slowed down somewhat in recent years, this policy has seen Eni refuse to stop hiring altogether, viewing a new source of employees as a significant corporate advantages. Alongside this, it has continued educational and retraining projects to use internal resources for vacant existing positions, leveraging existing resources and lowering external costs.

Eni is not the only major oil and gas player to see internal training and development as a move that makes fiscal and business sense. Gazprom, Russia’s largest gas company, has begun its Gazprom International Training program, pairing it with a Center of Excellence, to ensure high standards across the company.

Organized by Gazprom’s HR division and drawing in expertise from across the company, the Center is in Amsterdam but arms professionals in 24 countries with skills ranging from 7 technical disciplines (including geophysics, reservoir engineering, asset maintenance) and 8 non-technical disciplines (including business development, finance, HR and marketing). This ensures that all employees, no matter their geographic area, receive unified training, learning the same values and understanding the direction Gazprom is taking.

“Everything is standardized in our work. For instance, we intend to create a database that will reflect skills, abilities and education level, i.e. the competence of all employees. An objective professional evaluation of everyone will be performed to find out what he/she is really good at and what he/she still has to work on. And his/her manager will be able to quickly understand in which areas and in what specifically this employee needs to be ‘developed.’ The database will be a good tool to plan training… we will be developing it together with the Human Resources department of Gazprom International,” reveals Bernard van Polanen, Managing Director of Gazprom International Training.

 

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Another reason that Eni’s careful alignment of HR with overall business decisions and Gazprom’s Center of Excellence make sense is that having a solid HR strategy in place helps prevent economic reversals of fate from rippling through the ranks. In lean times, as have been seen in recent years, oil and gas companies around the world have cut jobs, frozen salaries, slashed bonuses or trimmed expat packages. Such moves, if not communicated in the best way, can rapidly cause attrition across the company. A strong HR department should support any process of business transformation and provide management with detailed analytics about human risks or ideas on how to positively use existing personnel.

This could be summed up by saying that the development of HR best practices is now a foundation for a successful oil and gas company. Fimiani highlights four best practices within Eni. First, the company’s “succession plan” system aims to cover strategic positions while drawing attention to any risk areas and acting to reduce them. Second, the “technical career” helps Eni ensure key and emerging areas of knowledge are both covered while retaining highly experienced staff. Third, the performance management process ensures that Eni’s HR strategy is ever more closely linked to the company’s business objectives and oversees how employees can make contributions toward the business’ ongoing improvement. Finally, “training and development” seeks to combine professional and management training opportunities, distance learning and Eni’s coaching academy to offer the most to staff.

HR is often overlooked — its contribution to an oil and gas company are sometimes intangible, obscured by more dominant areas such as engineering or easily understandable tasks like distribution. Its results are not always immediately available and, beyond hiring and firing, may seem difficult to quantify in a quarterly report.

However, as exemplified in Eni and Gazprom, HR practices can be an integral part of helping oil and gas companies during troubled times.

about the author
Chris Dalby
Journalist. Editor. China, Mexico, Latin America, Asia, place branding, Olympics, oil and gas, mining, renewable energy, international politics.