The UK energy and natural resources industry faces intense pressure to meet the government’s stated net zero targets. However, successful energy transition relies on the innovation, skills and expertise of the industry’s workforce. Against a backdrop of demand for skilled workers and skilled workforce migration, employers in the energy sector also face changing expectations around global mobility and working practices, and challenges around diversity and inclusion (D&I).

Our energy and natural resources experts highlight key workforce trends we are seeing in the industry and considerations for business leaders as they adapt to the demands of an evolving workforce.

This article was written in collaboration with RSM UK’s people advisory services experts.

Competition for skills

Key considerations for business leaders

Recruitment, retention and incentivising key talent

Given the competition for skilled employees in the energy industry, recruitment, retention and incentivisation of key talent is crucial. There are many ways of incentivising current and future employees, such as offering employees a benefits package or implementing an employee incentive plan. Employee incentive plans (such as an employee share scheme) are particularly attractive as they can provide employees with “skin in the game” and achieve synergy with employees and business leaders to drive the business toward its objectives. The incentive plans can also be structured in a way to fit with a business’ culture whilst offering tax advantages to employees and employers. Our three top tips for implementing an effective employee incentive plan would be:

1. Agreeing clear objectives for the business and understanding how the employee incentive plan can build towards those objectives so the plan can be structured effectively.
2. Clear communication with all stakeholders, particularly to the employees / participants in the incentive plans.
3. Regular reviews of the plan to ensure the plan continues to achieve the desired incentivisation for current and future employees / participants. Benchmarking against competitors and appointing champions of the plan to raise awareness of the plans and their benefits can help.

Workforce skills development

For energy companies looking to achieve net zero and a strategy towards sustainability, it’s important to consider the skills that will be required for the sector, the types of jobs that will be required and how those skills are going to be developed. Developing relationships with schools, colleges, universities, and other training providers could make a big difference to the talent pool in the Energy sector. Also keeping Equality, diversity, and inclusion (EDI) in mind during recruitment to broaden the pool of candidates will continue to be very important. Equality, diversity, and inclusion is an issue for all sectors. But for the energy sector (particularly offshore energy), improving the gender balance and minority representation across the industry needs to be a priority.

As the world continues to adjust to life post-pandemic, so employers continue to grapple with the ‘new normal’ where their global mobility policies and practices are concerned. The energy sector is no different. The typical challenges for employers in the industry endure, often in respect of offshore and rotator workers, needing to ensure that both company and individual employees are operating compliantly on immigration, tax, social security, payroll, and other reporting fronts – commonly in multiple jurisdictions simultaneously. With the world opening up for business, there has also been a marked return of more formal assignments.

Not all is ‘business as usual’ in the energy industry though. The pandemic has fundamentally changed the global mobility landscape, with employers being forced to acknowledge and tackle a range of unique challenges left in its wake. As with many sectors, there has been exponential growth in the number of remote work requests, with employees seeking to retain much of the flexibility and the enhanced work-life balance to which they became accustomed during the various lockdowns. Employers are particularly keen to accommodate requests for high performers and those with specialist skills.

Key considerations for business leaders

Attracting and retaining staff is a key concern of employers in the industry at present, so the development of international work policies, including the ‘traditional’ international assignment, as well as other ‘non-traditional’ models including short-term placements, virtual assignments, short-term remote working and longer term international remote working has become an item at the top of many HR stakeholders’ agendas – even where additional tax costs and administration result.

Non-traditional global mobility models can provide benefits, without the costs associated with a large-scale assignment programme. Nonetheless, with the immigration and social security complexities stemming from Brexit for intra-European movement of workers, and against the backdrop of global economic volatility, businesses in the energy industry, like many others, are treading a fine line between their employee value propositions and talent retention, and the costs and complexities of their global mobility practices.

Key considerations for business leaders

Workforce engagement, communications, and corporate culture

HR professionals need to embrace sustainability as an HR issue and use their influence to champion the agenda within their organisations, this is particularly the case for the Energy sector. Every organisation’s sustainability journey starts with a small group of champions. HR as a values-based profession is well placed to drive cultural change. Companies in the energy sector should find themselves ahead of other industries with their employees likely to have more knowledge of sustainability and net zero. There should less need for “green upskilling” in the energy sector as an understanding of environmental and sustainability issues should be higher than for other sectors.

Performance management

When we think how performance management might change for the energy sector, a policy around flexible and hybrid working should be considered as this could become part of an organisation’s sustainable HR strategy; helping to retain talent as well as reducing the need for daily commuting. Technology is important, using audio-visual equipment enabling effective collaborative hybrid meetings, through electronic whiteboards. Additionally, a consideration is also reward schemes; the reward packages that companies can offer can help to contribute to sustainability goals, for example electric car incentives or cycle-to-work schemes.