David Wilson, chief executive at Energy Exemplar, reflects on the talent war in the energy industry as the world moves towards a greener future.
- Although the oil and gas sector has been seeing an exodus of talent in recent years, the latest industry survey suggests that it is still a desirable area for candidates.
- Companies are now assessed by potential hires across a wider set of standards than before and, if fossil fuels cannot compete with renewables firms in one area, they can make up for it in another.
- The world of energy is showing how unpredictable it can be, and how myriad geopolitical factors can ultimately determine whether a single individual hands in their notice or not.
In March last year, a survey revealed that a whopping 82% of professionals working in the oil and gas industries would consider leaving for another sector within three years, and the majority of them (54%) would choose renewables. In fact, 28% of the new talent to go into renewables in the past 18 months before the survey was published had come from oil and gas.
Oil and gas sector resists talent exodus…
For at least a decade and a half, the oil and gas sector has stubbornly resisted a talent exodus to the growing and increasingly relevant clean energy space. There have been job losses due to automation, mergers and acquisitions, and capital discipline; but, by and large, the industry has held firm against the rise of renewables.
So what the March 2022 survey showed would seem to represent a major change. I have heard murmurings among my network that this might be the case: peers have noted in the last year or so that talent seems to be draining from oil and gas. It isn’t surprising, given climate change concerns and the broader societal focus on the green transition.
But not so fast. At the end of February, this year’s edition of that same survey showed not that the trend of jobs away from oil and gas to renewables was accelerating – but that it was reversing. In the renewables space, 87% said they would consider leaving their current role and 51% would move, if they could, to oil and gas. Bumper profits from recent rises in energy prices have given oil and gas the power to offer more generous salaries to new talent, and pay was cited as the biggest cause (59%) of dissatisfaction among renewables workers.
…and remains competitive against renewable companies
It isn’t just that. Companies are now assessed by potential hires across a wider set of standards than before. Fossil fuel firms have been working on their ESG performance, notably; but the simple fact is that renewables companies will have to compete with them across a number of different areas, such as social impact, workplace flexibility and others. If fossil fuels cannot compete with renewables firms in one area, they can make up for it in another, and this is proving to be attractive for restless talent.
What’s more, despite the need for the green transition, and despite the industry moving in that direction, building up a fully green energy supply is some distance away. And transitioning as such is not straightforward, which is why so many energy providers are kitting themselves out with advanced simulation software: they recognise that making the move quickly, safely and sustainably isn’t as simple as throwing a switch, and that there’s plenty of room for error.
Oil and gas, in the meantime, has a role to play, and will remain a desirable space for those with the right skills. Five of the largest energy companies in the Western hemisphere reportedly made nearly $200 billion combined in profits last year.
Talent war likely to favour green transition
Will this last? What we can say is that the trend towards cleaner energy is not slowing down, and a perfect storm of factors led to the surge in oil and gas prices (and the massive profits of oil and gas companies). The war in Ukraine and the sanctions subsequently imposed on Russia has created a massive shortfall in oil supply; oil demand has been rising back up to pre-pandemic levels with the increase in travel, and there has been less capital around to develop oil resources, due to investors losing money in oil and gas development over the past decade.
Moreover, the urgency of the climate crisis continues to create massive incentives for innovation in the renewables sector, and a corresponding need for those with the right skills and expertise to execute the various ‘green plans’ being drawn up in the public and private sector. If money is increasingly directed towards that sector, then remuneration for jobs will rise with it, and that will be a decisive ‘pull’ factor for energy talent. We can perhaps predict, therefore, that in the years ahead, we will see the renewables sector beginning to win this talent war of attrition against oil and gas. They have history on their side.
The world of energy is showing how unpredictable it can be, and how myriad geopolitical factors can ultimately determine whether a single individual hands in their notice or not. It’s a reminder of the fundamental interconnectedness of the modern world. The talent war, which is – perhaps understandably – less talked about than other aspects of the energy world, is nonetheless a crucial consideration as the world moves towards a greener future. Behind all the strategies, initiatives, deals, and, perhaps most important, technology, we need people.
The opinions of guest authors are their own and do not necessarily represent those of SG Voice.