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Saudi Aramco: Public Saudi Aramco: Public
Talent Challenges: Labor Market Perspective
Mohammed Al Sellemi, Director of Human Resources,
December 2014
Saudi Aramco: Public
Global HR Model
Emerging Challenges
Current Strategies
Strategic Recommendations
Outline
Saudi Aramco: Public
Global HR Model
A Holistic View
Saudi Aramco: Public
PTP Definition
Petro-technical Professionals (PTP)*: is a term which includes geoscientists (geologists, geophysicists, petro-physicists) and petroleum engineers (reservoir, drilling, completion, production engineers)
Definition and Data Sources
Disclaimer: All workforce insights and industry practices data in this presentation are developed and provided by:
Schlumberger Business Consulting Mercer Hays World Economic Forum International Labor Organization
Data Sources
Saudi Aramco: Public
On-Boarding Acquisition
& Selection
Continuous
Learning
&
Development
Skills
Training
Career Path
Definition
Measurement &
Appraisal Achievement
Advancement
& Recognition
Corporate Vision, Mission, & Goals
Corporate Competencies ( B & O Plans)
Continuous
Improvement
Job
Rotation
Coaching Mentoring
Counseling
Supervisory
Input
Job
Competencies
Succession
Planning
Evaluation
Performance
Planning
Compensation Labor Markets Corporate
Culture - DNA Benefits
Retirement
Global HR Model*
Corporate Workforce
Analytics and Planning
*Sellemi’s HR Model
Engagement
Saudi Aramco: Public
Criticality Classification
Critical A
Plant, equipment and/or technology specific. Not widely available.
Critical B
Industry specific. Available within O&G.
Critical C
Non-industry specific. Available within energy and industrial sectors.
Identifying PTP Talent
Saudi Aramco: Public
Emerging Challenges Current and Future States of the PTP Market
Saudi Aramco: Public
Emerging Challenges in Oil & Gas
Oil & Gas
LNGs
Petrochem
Mining
PTP talent acquisition is no longer limited to Oil & Gas.
A B C
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At a global level, supply exceeds demand of graduates.
There is, and will continue to be, a deficit in the number of experienced PTPs ( Mid-Career ).
As a result, there will be a very high demand resulting in extreme industry competition for talent.
Realities of The Current PTP Market
Emerging Challenges in Oil & Gas
Saudi Aramco: Public
0
2000
4000
6000
8000
10000
12000
PTP Graduate Global Recruitment Targets 2005 - estimated 2018
Global Demand for Graduates
Actual Demand Estimated Demand
Emerging Challenges in Oil & Gas
Source: SBC
Saudi Aramco: Public
Geology/ Geophysics
Petroleum Engineering
North America
849
2127
Latin America
1217 1547
Middle East & N. Africa
1087 1225
N.E. Asia
5766
7862
S. Asia & Australia
2245 2224
Europe
1900 2141
Global Supply of Graduates 2012, Number of Graduating Students (Excluding China)
Sub-Saharan Africa
633 167
Russia & Caspian
1589 2195
Emerging Challenges in Oil & Gas
Saudi Aramco: Public
Geology/ Geophysics
Petroleum Engineering
North America
35%
85%
Latin America
46%
71%
Europe
55% 62%
Graduate Willingness to Enter the E&P Industry 2012, % of Graduating Students
Russia & Caspian
66% 71%
Sub-Saharan Africa
65%
90%
Middle East & N. Africa
65%
90%
N.E. Asia
52% 59%
S. Asia & Australia
65%
85%
Emerging Challenges in Oil & Gas
Saudi Aramco: Public
Regions with Shortages
Net graduate supply Petroleum Engineers
Net graduate supply Geoscientists
Ongoing vacancies Petroleum Engineers
Ongoing vacancies Geoscientists
895
18
(250) (1065)
North America
680 875
(220) (500)
Europe
875 725
(225) (695)
Russia & Caspian
645 480
(100) (465)
Latin America
(840) (1025) (1505)
Sub-Saharan Africa
(1345) (275) (580)
(1330)
Middle East & N. Africa
130
(510)
575
(125)
(1045)
AsiaPac
Net Supply of Graduates vs. Vacancies 2012, Number of Net Supply of Graduate Students (Excluding China)
Emerging Challenges in Oil & Gas
Saudi Aramco: Public
40% of Petroleum Engineers are Production Engineers 215,500*
Petroleum Engineer
4,300 Project
Engineer
32,300 Completions
Engineers
56,000 Drilling/Well
Engineers
79,700 Production Engineers
43,100 Reserves Engineers
Emerging Challenges in Oil & Gas
Petro-tech Drilldown
Source: Mercer
*Estimated based on a 2013 sample of 215,500 PEs out of 1.6mm oil and gas workers.
Saudi Aramco: Public
Emerging Challenges in Oil & Gas
Total Global PTP Population in Upstream
138,400 PTPs
Source:SBC
62%
38% Petroleum Engineering
Geosciences
Discipline Age
26%
43% Over 35 Experienced
57% Below 35
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Emerging Challenges in Oil & Gas
In 2018, the global pool of experienced PTPs will decrease by
4% While global recruitment plans
require 40% more…
Saudi Aramco: Public
Emerging Challenges in Oil & Gas
0% 10% 20% 30% 40% 50% 60% 70%
Shipping/Maritime leaders
Sales and traders
Finance managers
Upstream technicians
Upstream project managers
Geoscientists
Plant/Operations technicians
Plant/Operations managers
Plant/Operations Eng.
Petroleum Engineers
Experienced
New
Both
65%
61%
55%
53%
50%
49%
42%
32%
31%
18%
Upstream Anticipated Talent Gaps by Job
Source: Mercer
Saudi Aramco: Public
Emerging Challenges in Oil & Gas
8%
8%
12%
15%
15%
15%
19%
23%
23%
35%
38%
38%
46%
50%
69%
69%
77%
Cement Technician
Subsea Technician
Drilling Fluid Technician
Cement Engineer
Junior Completion Engineer –office based
Junior Completion Engineer –rig based
Junior Drilling Engineer –office based
Drilling Fluid Engineer
Junior Drilling Engineer –rig based
Subsea Engineer
Drilling Manager
Senior Completion Engineer –rig based
Senior Drilling Engineer –rig based
Drilling Superintendent
Drilling Supervisor (‘company man’)
Senior Completion Engineer –office based
Senior Drilling Engineer –office based
Drilling Jobs at Risk of Shortage
Source:SBC
Saudi Aramco: Public
Emerging Challenges in Oil & Gas
Local Content in Drilling Positions Among Majors
29% 30% 28% 42% 43%
64% 62% 71% 80%
71% 70% 72% 58% 57%
36% 38% 29% 20%
Local Expat
Source: Mercer
Saudi Aramco: Public
Current Strategies
A View of the Industry’s HR Strategies and Practices
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Current Strategies
3.5
2.0
North America
3.5
8.0
3.0
8.0
Young National Graduates
Young Expatriate Graduates
2.8 2.2
Europe
3.0
2.0
Young National Graduates
Young Expatriate Graduates
2.8 2.8 3.5
4.0
Middle East & N. Africa
3.5
Young National Graduates
Young Expatriate Graduates
6.0 6.0
3.2 3.0
Asia (without China)
3.2
Young National Graduates
Young Expatriate Graduates
3.0 3.0 3.0
5.3
2.0
Sub-Saharan Africa
5.8
Young National Graduates
4.5
Latin America
5.8
Young National Graduates
5.0
Youth Average Duration of Recruitment
2010 2011 2012
Saudi Aramco: Public
Current Strategies
Midcareer Average Duration of Recruitment
North America 4.7
2.8 4.0
Midcareer Nationals
Midcareer Expatriates
2.5 2.5 2.5 2.9
3.3
Europe
Midcareer Nationals
Midcareer Expatriates
3.3 3.9 4.0 3.6
3.5 4.0
Middle East & N. Africa
3.5 5.0 5.0
Midcareer Nationals
Midcareer Expatriates
4.0
Sub-Saharan Africa
6.0 5.0
Midcareer Nationals
Midcareer Expatriates
2.3
4.7
2.5 3.0 3.2 3.0
Asia (without China)
3.4 3.7 3.8
Midcareer Nationals
Midcareer Expatriates
4.0
2010 2011 2012
Saudi Aramco: Public
Current Strategies
0.7
1.2
0.7 0.7 0.7
1.1
0.3
1.5
1.2
0.7
1
1.5
1 1 1.1
1.4
0.9
1.4
0.9 1 1
Lack of structureddevelopment program
Lack of coaches Senior PTP mindest Lack of job rotationopportunities
difficulty planning jobrotations
Lack knowledgemanagement/transfer
Lack of seniormanagement gudiance
Independants Majors NOCs
Barriers to Reducing Time to Autonomy 2= Highly Critical, 1= Critical, 0= Not Critical
Source: SBC
Saudi Aramco: Public
47%
22%
13% 9%
6% 3%
Current employeesfrom other oil and gas
companies
Experienced hires fromoutside oil and gas
industry
Contractors/Temporaryworkers/Outsource
function
Colleges/Universities2 Retirees from other oiland gas companies
Retirees from yourorganization
.
% of external hires
Expected to increase
Expected to remain unchanged
Current Strategies
Current and Planned Sourcing Strategies
*Mercer Source: Mercer
Saudi Aramco: Public
Strategies for Filling Open, Experienced Positions
Current Strategies
% of open positions filled
44% 33% 28%
56% 67% 72%
0%
100%
2006 2013 2014
Build
Buy Buy – hire workers
from outside your
organization
Build – promote,
train, or transfer
existing employees
Saudi Aramco: Public
Main Attraction and Selection Strategies Adopted by The Industry
Current Strategies
Expanding recruiting channels (online, career fairs, social media, etc.)
84% Improving
competitiveness of employment package (higher compensation,
benefits, etc.)
61%
Online job boards
56%
Using a recruitment process outsourcing
provider
41%
Changing perceptions of company or industry
via marketing and public relations
33%
Increasing recruitment efforts across other
countries
22%
Expanding contract recruiting
18%
other
7%
Saudi Aramco: Public
29%
36%
43%
46%
64%
76%
Peer best pratices sharing
Mentorship for new employees
Developing IT systems for knowledgetrasnfer/management
Developing alternative career paths orexpanding options
Expanding training and educationalinstructionavailable to the workforce
Targeting T&D plan to individual needs
Training and Development Strategies by Industry
Current Strategies
Saudi Aramco: Public
14%
16%
23%
34%
38%
45%
63%
Rehiring retirees as full-time employees
Prolonging time to retirement
Re-engaging retirees on a non-full-time basis
Offering dual career paths —technical/nontechnical
Implementing retention bonuses
Developing more flexible work schedules
Improving job quality
Retention Strategies by Industry
Current Strategies
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Strategic Recommendations
Transforming Challenges to Opportunities
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Strategic Recommendations
Collaborative Model Establishment 1
Industry collaboration among peers
• Talent Sharing: Retain talents within industry.
• Industry Practices and case sharing (e.g., HSSE).
Industry collaboration with educational institutions
• Curriculum Design: Strategically align educational content with professional and managerial applications by incorporating practical and realistic curriculum elements (e.g., field work, visiting instructors, etc…).
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Strategic Recommendations
2 Strategic HR Focus
Robust Workforce Planning
Time to Autonomy Acceleration
Hiring Standards Leveling for Graduates
• Quality Input Data • Proactive and Intelligent Planning
• HRD (e.g., Mentorship) • Collaboration with universities
• Moving away from high-GPA and top school based evaluations to competency based.
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Strategic Recommendations
3 Complementary Technologies
Human Capital
Advanced Technological
Enablers
.
• Automation where applicable.
• Eliminate non-productivity due to talent shortage.
• Increase accuracy and minimize errors.
Saudi Aramco: Public
At a global level, supply exceeds demand of graduates.
There is, and will continue to be, a deficit in the number of experienced PTPs (Mid-Career) which requires increasing the pool of talents and improving Time-To- Autonomy.
Retaining talents within the industry is critical for long term success (reduce turnover rate in systematic and proactive fashion).
There is a need to work collaboratively at regional level among peers, academia and training institutes.
Summary- Collaborative Model
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Thank You