Resilience was the word of 2015 amongst the oil and gas sector. It’s been hard to stay positive, stay focused and to consider growing the business when it’s felt for many like a daily battle of challenges and stresses. So how as leaders do we work to continue to grow our businesses when everything around us seems so problematic.
We talk about “managing the survivors” when we talk about those left behind post redundancies.
Are you in this to be liked? Have you asked yourself how well you managed the cost reduction exercises in your business this year? This recession has cut deeper and lasted longer than most of us ever expected, but that doesn’t mean we have to wait for it to be over to be liked. Most leaders in this market have been through recession and subsequent headcount reductions several times. Many will admit that managing redundancies is the toughest thing that they have had to do in their careers.
An estimated 14.1 million people in Britain want flexibility in their working hours or location, equivalent to almost half the working population, the consultancy and jobs site Timewise says. As businesses continue to look to ways in which they can reduce their cost base other than simply by reducing headcount, one stone that is often left unturned is flexibility. It is commonly held that flexibility costs money, be it in management time for administering a complicated flexible working programme or by having to add more people to the mix to get the work done. In 1998, certain major oil and gas operators led the way by allowing employees to have every second Friday off of work (The 9 Day Fortnight or Alternative Working Week) – on the basis that they worked their contractual hours over 9 days. Competitors scrambled to put in place similar schemes in order to ensure that they retained their staff and to try and prevent them from being lured away by the competitors.
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.
There are various myths surrounding employee hires versus workers and vice versa – but which is the most efficient and sustainable option for the energy industry to see it through the next 50 years? Legally, people are either ‘employees’ or ‘workers’, the latter bill the employer through an invoice for a provision of services and the former are on the payroll. There’s a myth that we have two options, ‘staff’ and ‘contract’, but there are a variety of options available and a lack of creativity in this area can create issues for businesses. Employees are generally seen as lower cost, more loyal and, by some leaders, more productive than workers. However, in my experience, companies aren’t required to manage the quality of delivery of ‘workers’ any more than ‘employees’.
Aberdeen needed to attract around 120,000 new recruits by 2022 if it was to remain a global energy capital and capitalise on opportunities, according to PWC in 2013. But more recently, industry reports tell us that oil and gas sector employment could fall by as much as 35,000 over the next five years, partly driven by an anticipated 50 per cent fall in UK capital spending. However, research by EY into employment trends, commissioned by industry bodies and the Department for Business, Innovation and Skills (BIS), estimated that 12,000 new jobs would be created in the sector over the same period. One thing is certain: over the next 50 years our planning could be improved. One of the most common challenges listed by employers in the sector is the inability to effectively forecast and plan for resources, in terms of numbers and timing – let alone skill sets. To some extent, this has hampered our ability to grow our own talent.
As the oil price plummets to its lowest level in more than a decade, oil and gas industry bosses in the north-east are making cuts to curtail declining profits. We can’t avoid that reality. The energy sector is increasingly feeling the pinch and staff layoffs are inevitable as challenging times ensue over the next quarter and beyond. Redundancies in any company during a recession are tough. But in a cyclical market, it is important to try and make the process as pain-free as possible for those whose jobs could be at threat.