Entering 2023, the oil and gas industry was expected to have its strongest balance sheet yet - in fact, a Deloitte report found 93% of oil and gas executives expressed positivity about the industry’s outlook in the upcoming year. The upside includes the fact the average oil and gas worker is 44 years old, and that the industry has mostly regained its 15,000 workers that were laid off during the 2020 crash.
Yet, despite recent upside, the industry remains plagued with challenges. For one, the oil and gas industry is still incredibly volatile, one factor that makes the industry relatively unappealing to younger talent. And then there’s the social impact: the growing concerns around climate change and the perception of the industry as threatening, destructive, and unsustainable.
In this blog post, we unpack the impact of the oil and gas industry on Generation Z and provide insights into how the industry can make small changes to better attract, engage, and retain this emerging workforce generation.
The state of early career talent in the oil and gas industry
For Gen Z, the oil and gas landscape is noted to have a “perception problem,” viewed as low-tech, unstable, blue-collar, dangerous, and harmful to society. A poll by EY found that 62% of Gen Z in the US found a career in oil and gas “unappealing,” blue-collar, problematic, and harmful to society…posing a significant obstacle in attracting, hiring, and retaining talent.
Universities are also experiencing a shift. Since 2017, the number of graduates from petroleum engineering programs plummeted 83%, causing some universities to suspend program enrollments altogether. With college students avoiding petroleum engineering programs (and, instead, gravitating towards areas such as high tech, arts & culture, healthcare, and financial services), a talent gap is growing as oil companies seek to replace retiring Gen Xers and Baby Boomers.
Focus on improving ESG practices
One-third of Gen Z report rejecting a job offer because they didn’t like a company’s ESG record, according to a recent KPMG survey. Put very simply, ESG is critical in recruiting and engaging Gen Z talent...and the oil and gas industry is no exception.
ESG, which stands for Environmental, Social, and Governance, is a framework for evaluating investments based on their environmental, social, and governance factors. It involves considering the impact of a company’s operations on the environment, its relationships with stakeholders, and its adherence to ethical and responsible business practices. Think: using cleaner energy sources, recycling, water conservation, promoting equity and diversity, supporting local communities, following ethical guidelines, transparency, etc.
And, with climate change posing a severe threat to global economies, with consequences like unproductive farmland, uninhabitable coastal cities, and rising sea levels, the understanding of ESG in the natural gas industry should extend beyond climate change and diversity programs. Energy exploration and production companies can align with ESG values well beyond their end product - such as utilization, biodiversity, pollution, waste, and the depletion of limited resources - and invest in renewable resources.
To truly showcase the impact of ESG efforts, it’s important to go beyond merely displaying a list of environmental credentials. Gen Z candidates seek transparent ESG reporting demonstrating how a company tracks its impacts such as emissions, water usage, and other social impacts. To revitalize the image of the oil and gas industry, it’s crucial for companies to establish a clear sense of purpose. By documenting the core principles that underpin their business, inspiring these values in leaders, and ensuring leadership effectively communicates these values to their teams, oil and gas companies can reinvigorate their appeal.
Commit to DEI&B
Numerous studies have consistently shown a compelling and statistically significant relationship between diverse teams and increased productivity, innovation, and improved financial performance. However, the oil and gas industry is notoriously known for being one of the least diverse industries. And, despite attempts at increasing the racial and gender diversity of the industry, there’s still work to be done. According to a 2020 report, less than 10% of the oil and gas industry is African American and women represent less than one-third of the workforce.
To make matters worse, oil and gas companies are experiencing a shift, colloquially known as the “Great Crew Change.” As older workers retire and Generation Z assimilates into the workplace, these organizations are confronted with a pivotal decision of either creating environments that appeal to young, eager, and diverse talent, or risk losing them to technology giants like Amazon, Apple, and Google.
Today, oil and gas companies must create inclusive environments where employees (of all tenure and experience) can be themselves, accepted, and valued for their unique skills. Reflecting diversity in employer branding and communication, celebrating heritage months, and partnering with diversity associations can help demonstrate a genuine commitment to DEI&B. Most importantly, an internal culture needs to align with an external image in order to genuinely and authentically promote this initiative.
Challenge existing corporate culture
For the oil and gas industry, nearly 50% of workers report feeling like outsiders at work and don’t consider their workplace to be a “community.” This is despite the majority of oil and gas workers (72%) wanting to feel a strong sense of belonging at work.
In an industry like oil and gas, which has a long history of independence and autonomous work, a positive culture can nurture shared values and beliefs and encourage teamwork alongside individual efforts. Commitment to culture rolls up many of the topics already discussed today, such as ESG and DEI&B initiatives. And culture is - unquestionably - the number one driver in attracting, engaging, and retaining Gen Z talent.
“We’ve always done it that way,” is one of the most dangerous phrases in business. Although it is mostly likely said with good intentions, they are not words an employee can embrace. Creating a culture of change requires listening to employees and empowering them to question, “How can we do this better?” –Yahoo Finance
For oil and gas companies, embracing feedback, challenging hierarchies, and adapting to the new tech landscape are key to facilitating a positive, inclusive culture. Employee feedback plays a crucial role in understanding and evaluating the prevailing culture within a company and can help leaders actively seek performance feedback from diverse groups to encourage a range of perspectives. When hiring, note cultural alignment alongside technical skills, define ideal candidate profiles that align with the organization's values, and conduct interviews that assess lacking soft skills within the current team. Visibility is also key in demonstrating the commitment to change, showing teams that efforts are being made to improve the culture. Ultimately, transforming the culture sets the stage for high-performing teams that align with the company's objectives, encompassing human, operational, and financial performance.
Key Takeaways
The energy industry’s ability to address the above issues and make significant progress in these areas will be crucial in rebuilding trust, attracting and retaining top talent, and adapting to the evolving employee landscape.
Companies need to invest in cleaner energy and technology and follow through on ESG initiatives to appeal to Gen Z workers, who value social and environmental responsibility. As workforce preferences continue evolving, the importance of aligning work with personal purpose, passions, and values is increasingly becoming a critical factor in energy job and career choices. And finally, as a global industry, it’s important for the oil and gas sector to embrace a culture of inclusion and diversity. Traditional rules and roles that may apply to regional or national industries are inadequate in a worldwide context where quick decision-making, anticipating future changes, and fostering a diverse workforce is imperative.
For more insights like these, consider Abode. Abode’s all-in-one platform combines every aspect of your engagement and retention strategies, giving candidates personalized experiences (at scale!) while building the community & connections they're yearning for. Learn more or book a demo with our team here.
