The economic downturn we experienced in the GCC over the last few years has impacted various sectors of the economy, but unsurprisingly, none was hit worse than the oil and gas industry – where it all originated. This led many organizations to “rightsize” and implement pay freezes, but we are finally seeing signs the energy industry is picking up, albeit in an environment where lean operations and “the bottom line” remain top priorities. Unfortunately, this also means that pre-2014 human capital challenges are beginning to re-surface, urging the industry to re-evaluate its Employee Value Proposition (EVP).
Compensation expectations and a new generation of talent
The energy industry has historically dominated the pay charts in the UAE, providing compensation and benefits well above market standards. This pay strategy was the result of the lack of technical talent required by the sector, and high salary expectations are still a major draw for employees in the industry. However, other industries, such as technology and life sciences, are taking over the top spots when it comes to pay, and compensation specialists in the energy sector are therefore looking to develop packages that go beyond “monetary” to attract top talent.
Another important issue we need to consider is that, Western expats form a large part of the skilled workforce in the GCC energy sector, however, this group is ageing rapidly and the topic of talent shortage is back on the agenda. This older generation will need to be replaced by younger employees, who often have a more skeptical view of the industry, due to its economic volatility or the increasing concern over the environmental impact of the sector. At the same time, this millennial generation often possesses the digital skills required in the so-called 4th industrial revolution. In order to attract and retain these highly sought skills, oil and gas companies therefore not only compete with peers in energy, but also with other sectors. To enhance the appeal of the energy sector, companies must explore a culture and work environment that aligns more closely with the new generation.
Re-evaluating Employee Value Propositions (EVPs)
To address talent-related challenges in the energy sector, companies are now turning their focus towards reviewing and repositioning their EVPs. There are several initiatives that are currently being explored in the region, ranging from relatively quick wins, such as segmentation of pay strategies across different groups of employees, to solutions that go beyond financial compensation, like defined career development paths, flexible working and gender diversity.
These challenging times provide a unique opportunity for energy organizations to re-think what they offer employees and how to connect better with them. In today’s competitive and dynamic talent market, reviewing or repositioning your EVP and linking it to the organization’s purpose is a requirement for sustainable employee attraction, retention, satisfaction and performance.