July 15, 2024

Bridging the Energy Sector Skills Gap

Regardless of where your organization sits in the ever-expanding energy value chain — operator or service provider in upstream, midstream, downstream, traditional, non-traditional, or renewables — competency assurance and operational skilling are critical in closing the energy sector skills gap and ensuring the safety, competence, and capability of your workforce. Using a competency management system to streamline this validation process can have massive benefits for the top and bottom lines of your organizational performance.

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Equip your energy workforce with the right skills for current and future demands

Build a skills framework that fully reflects the needs of your business today and in the future so your energy workforce can meet the demands of the ever-changing industry landscape. 

Frequently asked questions about energy competency management

What is skills and competency management in energy?

Why is competency assurance important in oil and gas, and energy organizations?

Why is there a skills gap in the oil and gas industry?

How can competency management help close the energy skills gap?

Why is traditional competency assurance not sustainable in energy?

With regulatory requirements, societal expectations, and tech advancements causing increasing change within the energy sector, validating a worker’s proficiency level is essential. Without this validation, initiating reskilling, upskilling, or cross-skilling programs to advance your workforce or guarantee that employees have the skills to operate safely is nearly impossible. 

Traditional competency assurance programs track operational skills in files, folders, or spreadsheets. Eventually, these all end up in boxes or binders in a closet or filing cabinet. This documentation is not easily accessed by employees or managers, making onboarding, training, development, and scheduling difficult and time-consuming. 

This old way of tracking compliance and competence is impossible to continue at scale. It will be costly to your operational budgets, compliance scores, the safety of your teams, and your organization’s ability to evolve with the industry. Let’s take a closer look at turbomachinery and how a modernized operational skilling approach to competency assurance can impact your organization.

How do you close the energy sector skills gap?

Field service organizations are facing difficulty with the number of engineers and technicians retiring versus the number coming into the industry. Field Service News reports that 73% of organizations have identified an aging workforce as a potential threat to their field service operations, illustrating the departure of knowledge and the increasing gaps in experience and skill levels across the workforce. Field Service reports, “Not only does the industry need to bring in the new younger workforce, but it also needs to make sure the older engineers and technicians are still around to transfer their skills and train their incumbent peers.”

  • KPMG found that eliminating outdated skills processes can materially positively impact employee retention. One oil and gas company lost many of the millennials it had recruited using the same onboarding and training procedures as it had for 20 years. Switching from paper-based to automated processes, they saw an increase in retention rates. 
  • Deloitte suggests that developing agile workforce structures can help match skills to projects, launch training and development programs to reduce the skills gaps, and positively impact employee retention. 
  • In a study conducted by the Society of Petroleum Engineers, 53% of respondents said a lack of training and development opportunities would lead them to consider leaving an employer, and 75% said training and development was important in their choice of role.
  • Mercer found that 14% of companies have instituted a skills-based talent strategy, such as a pay-for-skills program to compensate and help attract, build, and retain critical skills and talent.

As exemplified above, skills-based strategies, such as operational skilling, tremendously impact how organizations attract, retain, and develop talent. Operational skilling helps you understand the exact skills and abilities across your workforce, construct teams based on the availability of skills, and reduce unnecessary training with personalized development plans. Employees gain insight into their potential career paths with the organization and how they can improve their skills to achieve that goal. Ultimately, they’ll feel more invested in as an individual, and the organization will build and put more qualified teams in front of the customer. Competency records reflect skills, knowledge, and ability and provide your organization with insights to better reward and recognize your engineers, technicians, and front-line workers.

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Lack of skills gap data is fueling the burnout fire in energy

60% of employees working in oil and gas admit they don’t feel in control, and 46% confess there are times they’ve felt like running away. With these high percentages of burnout affecting employees throughout your organization, it’s essential to build balanced teams based on validated experiences and skills through operational skilling

Let’s paint a picture. You have a team of employees ready to deploy to a job site. Some members are only 30% competent in the skills required to complete the job. This means they lack 70% of the skills required, yet they’re still deploying to the job site. Conversely, other team members are 100% competent. With this high level of incompetency across the team, not only are the more experienced employees doing their part of the job, they’re completing others’ work as well, and likely, without recognition or extra pay.

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Without operational skills documentation, this scenario will continue to be your organization’s operating environment. Experienced technicians and engineers will continue to experience burnout. At the same time, those who lack the required skills and competencies will go without the training they need to close skill and experience gaps. Ultimately, this results in more time wasted and less productivity, job completion, and revenue generation. Operational skilling gives you accurate skill insights to deploy teams based on the right mix of skills and upskill employees to achieve the required proficiency levels based on organization and job needs.

Excel as the energy sector transitions to new technologies and energy sources

A shifting focus on renewable energy, the incorporation of AI, VR, and AR for predictive maintenance and on-the-job training, and collaboration tools and cloud platforms used for analytics and on-site operations are changing how your technicians and front-line workers operate. These new technologies will enable field service organizations to take a quantum leap forward regarding efficiency, effectiveness, productivity, and customer experience. But navigating the new heavily relies on your organization’s ability to adapt your workforce skills to the new operating environments. Strategically build out the skills your workforce needs with operational skilling and treat these changes as the catalyst for performance that they could be.

In an international energy survey, 64.7% of companies cited that training and developing their existing workforce is how they plan to overcome skills gaps associated with industry advancements. To do so, a complete understanding of current skills and abilities is essential. This visibility enables you to:

  • Plan strategic upskilling, reskilling, and cross-skilling programs. 
  • Quickly transition your workforce to meet new regulatory or client-related requirements.
  • Track workforce development targets for emerging skills and technologies.
  • Capture market share, win work, and retain customers with a competent, qualified, and deployable workforce. 
  • Prove to customers your workforce capability with validated employee skills profiles.
  • Increase prices with a more in-demand workforce.

Regardless of the services you offer today or in the future, focusing on operational skilling is crucial to maintaining business operations and managing the risk that naturally occurs with industry and market changes.

Think of skills management as a complete business program made up of 4 processes: Curate, Assign, Assess, and Develop.

Prioritize health, safety, quality, and compliance

Strategic ESG efforts are increasing due to the growing attention from customers, governments, investors, and executives on organizations’ environmental, social, and governmental impacts. Research from McKinsey shows that ESG creates value in five ways: top-line growth, cost reduction, reduced regulatory and legal interventions, increased employee productivity and uplift, and enhanced investment and asset optimization. To achieve this value creation, organizations must have plans to maintain the commitment to ESG standards and mitigate the potential risks.

The ESG Industry Report Card ranks oil and gas organizations at the highest level of exposure for environmental risk, nearly the highest level for social risk, and an above-average level for governance risk. In an industry that is changing rapidly and at such high levels of risk, organizational plans should center around keeping the workforce skilled and compliant at all times. 

As a strategic plan, operational skilling gives you visibility into compliance levels across your workforce. Deploy the right resources to the right jobs and when compliance levels don’t meet requirements, understand what training and development programs to initiate to target these lapses in compliance. Without strategic skills data, you increase the likelihood of violations and potentially catastrophic damages occurring on the job site. Operational skilling embeds compliance and safety into every aspect of your organizational culture, ensuring a continuous approach to training and development and keeping your organization adept in accomplishing organizational goals or adjusting to changing regulations.