Reacting to tumbling oil prices, E&P companies have been forced to cut costs by shelving or postponing projects and implementing major cost cutting programmes. The direct result has been the loss of many thousands of skilled and experienced staff. This loss of skilled people has exacerbated the effects of the much discussed “big crew change”.
As the upstream oil and gas industry consolidates and looks towards recovery from the latest downturn there is one important element that must be addressed – employee skills. One of the biggest challenges facing the industry will be ensuring that an appropriately qualified and experienced workforce is available to meet current and future operational requirements.
Companies need be able to understand how their workforce skills can meet current requirements and how to develop and nurture these skills to meet increasing demands during the upturn. Failure to meet these requirements will mean additional technical and operational risk and missed opportunities.
Recognising the challenge and preparing for the future will require a broad approach to attracting, assigning, developing and retaining the right skills. The combined impact of the current downturn and the big crew change mean that it will become increasingly difficult to have the right people in the right jobs in the right numbers.
Competency management allows companies to understand their staff and skills requirements and how they relate to the their current staff demographic. A competency framework can be used to assure that staff have the correct level of skills and experience, particularly in safety critical roles.
For the employee, competency management also offers a means to managing their careers and technical progression. It provides clarity and consistency in progression and reward as well as offering a structured technical career progression.
The “Baby Boomer” generation of skilled staff are approaching retirement
Skills and knowledge are being lost due to successive downturns
Demand for skills expected to outstrip supply by 30% in 2020
Competency Management will be a key differentiator for companies successfully managing the skills shortage
KEY FEATURES OF A COMPETENCY FRAMEWORK
A competency framework defines the technical and behavioural attributes required to perform given roles within an organisation. The framework defines Assurance, Management and Development of staff skills.
Competency Assurance can be applied to new hires as well as mid-career staff to ensure that education, training and experience combine to provide a minimum level of competency to safely and effectively undertake a given role.
Competency Management allows for skills mapping across an organisation to ensure the most effective use of staff and supports longer term development of skills to support organisational development. It can be used to address skills gaps to ensure that the business has the right balance of skills at all levels. Technical and behavioural skills are defined for specific roles.
Competency Development provides a structured training and development programme for staff. Parallel technical career paths can be defined.
- Provides an auditable standard of technical and behavioural competency for each technical discipline. This can be independently assessed and certified and backed by recognised professional bodies.
- Mitigates risk and enhances reputation for the organisation. This can provide a clear differentiator in developing new business and attracting new staff
- Underpins technical and operational excellence by ensuring verifiable minimum standards of competency are met.
COMPETENCY MANAGEMENT AND DEVELOPMENT
- Succession planning and structured training programmes can be better managed.
- Staff retention is improved through better clarity and transparency of performance and progression requirements making them more structured and less arbitrary.
- Each staff member can take ownership of own their own long term career development plan with training requirements clearly understood and agreed. An employee is required to demonstrate that they can meet a minimum level of required competency to undertake fundamental aspects of their role. Experience does not necessarily demonstrate competency.
- Competency Assurance and Development can be recognised as leading towards Chartered Engineer status.
- Permits a parallel technical career path to be developed to allow non-management progression to be recognised and rewarded. Not all technical professionals wish to follow a general management career path.
BUILDING THE BUSINESS CASE FOR COMPETENCY
Established wisdom combined with E&P research, has identified that a competency model can improve productivity and drive bottom-line results in 3 primary ways
Performance expectations and role clarity. By aligning the competencies and performance measures with the expectations of the organisation, employees set better goals and perform more of the “right” behaviours.
Improve retention. The results of clear goals and targets are better development plans, employees with a clear indication of their strengths and development opportunities who will more likely remain in such an environment. Understanding what improvement looks like and what is expected by the organisation ensures the employees’ engagement and fosters their intent-to-stay within any company.
Ensure the quality of new hires. The organisation’s recruiters and hiring managers make more informed decisions with clear criteria and more accurate talent profiles. Understanding what represents a high performer, allows the selection of more successful resources.
COMPETENCY MANAGEMENT LIFECYCLE
Competency management seeks to integrate a number of related activities. Like most management systems it involves designing, planning, implementing, monitoring and reviewing.
In the model opposite we show that competency management can be viewed as a cycle defined by a number of principles, linked in five steps. This cyclic process approach leads to continuous improvement in competence.