Talent Shortage

Reasons for the increasing talent shortage are many, including workforce retirement, increasing labor demands and diminishing supply, lack of leadership development and increasingly complex skill sets needed to operate technology as industries automate. Challenges such as seasonal demand, higher turnover and attracting employees to working environments in remote locations complicate the problem even more.

Demand for employees aged 35-45 will increase by 25% but the supply will only increase by 15%.

The talent shortage facing the energy industry and how individual companies choose to face this systemic challenge will prove to be a defining and differentiating factor in their future success or failure.

The number of working people age 15 to 64 is predicted to decline sharply. For example, the Alberta Minister of Employment and Immigration predicts a labor shortage of 77,000 workers within the next 10 years. In particular, finding and keeping highly qualified project and field engineers has already become a daunting challenge. In a Towers Watson 2012 Global Study survey, 72% of survey respondents cited problems recruiting critical skills employees.

Workforce reduction will put increasing pressure on the need to retain employees, especially since replacing them can cost anywhere between 30-100% of their salary. 

That’s expensive for companies, especially considering much of their workforce is actively considering quitting in the next year. Although 52% of survey responders of the Towers Watson study said they’d prefer to remain with their current employer, 41% said they would take a job elsewhere if it advanced their career. Pressure will intensify as the desire increases to attract a company’s pool of high performers directly from their competitors. This would mean an upward trend in median salaries and benefits that already strapped companies will have to offer to both recruit and retain the workforce they need.  

The disconnect between what recruiting employers think employees value most and what employees really look for when considering change is decreasing their ability to attract high performers. While high performing employees rate career advancement, salary and job security at the top of their list, employers thought they’d be more concerned with having challenging work and an ability to impact performance.

Employers also fall short on retaining their valuable employees when they don’t pay attention to their needs. Dissatisfied employees feel overstressed and underappreciated. They experience lack of communication and direction in their jobs, which ultimately shortchanges the industry and a company’s bottom line. As employees lack engagement and focus, they lose energy and reduce productivity.

Lack of diversity is another increasing concern. In the past, a majority of the world’s college graduates came from countries like the US, UK, France and Germany. However, now countries dominating the list are Brazil, China, India, Indonesia, Mexico, Russia and Turkey. Inability to adapt in ways that will attract workforce from these growth areas could cripple the industry. Also, not factoring in these cultural differences when relocating employees increases their propensity to fail. 

Forty-six percent of new employees will fail within the first 18 months of employment.

While rapid change means laborers need sophisticated technological skills and up-to-date training, perhaps one particular set of skillsets is most often overlooked, leadership and interpersonal skills. In fact, it’s the top reason new employees fail. They often lack emotional intelligence not factored into consideration during the interview process.    

Facing this myriad of problems means many companies get trapped into cycles of dealing with immediate needs only to have them cycle around again, not taking the time or having the capacity to address the issues on larger long term scales that would prevent their continuance. While the energy industry has almost limitless possibilities to grow, it cannot reach it’s full potential before addressing these shortcomings.