Energy Voice has launched an event aimed at ensuring the next generation of industry innovators don’t get lost in translation amid a market downturn.
One of the first ports of call should be looking at what companies are spending and where they’re spending it during a crunch.
The last economic recession in 2009 led to the slashing of budgets allocated for workplace training within companies. A survey undertaken at the time found that in the private and public sector, 33% and 34% of respondents reported reduced training funding.
In the voluntary and community sector, the proportion was 25%.
The survey also found that large organisations had been particularly affected by cuts in training budgets.
“In organisations with over 5,000 employees, 44% of respondents stated that training budgets had been reduced in the previous 12 months. In organisations with 251–1,000 employees and 1,001–5,000 employees, the proportion amounted to 32%. In organisations with 250 or fewer employees, the rate was 26%” (Prosser 2009).
In contrast, this year despite a downturn in the oil and gas industry, OPITO has reported a 250% rise during the first half of the year in the number of North Sea energy firms investing in the systems, which assess, develop and demonstrate workforce competence (OPITO 2015).
This is likely due to predicted M&A activities and takeovers across the industry and therefore, many organisations will have to transform their models.
In order to do this they must invest more time and resources in understanding and interpreting the efficiencies of their people through transparent performance management frameworks and talent management models, put simply – they must be better managers.
We all know that to become a better manager, training is fundamental.
So we start to see a more considered drive to do more with less.
Across Scottish sectors, including oil and gas we have seen an increase in demand for development initiatives that make managers more effective. There’s an evident focus on helping managers less with the transactional side of management and more with the part that focuses on building strong teams, getting the best out of people and creating cultures that engage, develop and retain staff.
In the best cases managers are now focussing on creating the sorts of environments that will enable the next generation to succeed. With budgets tighter than ever for training, the prioritisation of this sort of development can only be positive.
In the worst cases, which still remain highly prevalent, training is stopped.
It’s considered ‘discretionary spend’. There’s a general feeling from business leaders that their priority is to sustain the business and not to spend money on training. Whilst a very practical and understandable approach, this suggests that training is simply a staff benefit or a ‘nice to have’.
Specifically in oil and gas, we continue to work to reduce our cost base.
Surely hiring more graduates or trainees and spending money on training; is less expensive than the age-old challenge of having to hire senior people to fill more junior positions due to market forces.
Is it not better to cross train the more experienced staff to cover multiple roles that do not require full time resources or to multi-skill in general?
Investing for cost saving purposes is a difficult concept for many to grasp, as we continue to do things the way we have always done them. This adds to the cynicism surrounding the industry’s capability to make any impact on its cost base.
Reducing headcount simply won’t achieve the savings required.
In the oil and gas sector not only does this fail to meet the cost efficiencies required it simply increases other business risks including safety and loss of production through insufficient resourcing levels.
Learning is now less about people sitting in training rooms and more about people being allowed to share ideas, test them out – and fail or progress with ideas – in a protected way.
Opportunities to learn new knowledge and skills are still there, although now these are mainly self-service. The investments managers are making in learning and development now relate to innovation and efficiency. And these happen to be the sorts of activities that will allow the new generation to thrive.
How well we fare this downturn will ultimately be reflected in future statistics. Let’s hope they show the sector learned from past mistakes.
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