The energy industry has a problem. Every time cyclical swings in energy prices or changes in tax credits dries up revenues leading to downsizing, female workers face greater risk.
“Many of us are in non-technical roles that are considered support functions,” one senior woman leader explained at a recent seminar we led on future workforce at Columbia University’s Center on Global Energy Policy. “When budgets get cut, we are the first to go.”
But even technical women in front line roles – which are more likely to get a person promoted into upper management and the C-Suite – say they are having trouble advancing their careers. They say men still bond with each other through sporting events or client dinners that have led to male camaraderie over the years and make it harder for women to break in.
The danger of women using the same kinds of networks to build bridges to each other is that they will accidentally cordon themselves off even further.
Today, many industries face the challenges of recruiting and retaining a diverse and inclusive workforce, but the energy industry has found itself with unique problems. Almost a quarter of U.S. employees in the natural gas and electricity utilities sector will be approaching retirement within five years, necessitating a large recruitment of new talent.
An IHS Market Study for the American Petroleum Institute found that by 2025, millennial workers will make up 41 percent of those employed by the oil, gas and petrochemical industry and that more than half of the Americans in this generation in 2016 were Hispanic, African American and other people of color.
That’s twice as diverse as the emerging workforce in the 1970s. These demographic changes mean that companies have had to get more proactive about how they recruit and attract diverse talent, especially as energy companies are discovering that with the digitalization of the sector, they are competing with companies like Google and Facebook for potential employees. Further exacerbating the situation, research has found that only 2 percent of U.S. college graduates view working in the oil and gas industry as a top viable career choice.
What does this mean for the future of the industry?
In the utility sector, firms have tried partnering with industry and labor unions to establish apprenticeship programs, targeting students in underserved communities and creating educational programs that reach out to students as early as middle school. Companies say they have also been adjusting their recruitment processes to ensure that diversity is built into the pipeline of candidates being interviewed on college campuses. Some senior women executives say that they join women’s networking groups to give them visibility toward available talented younger women to recruit.
All this raises the question: If recruiting a diverse workforce is difficult, does it make sense to the bottom line to spend time and money to successfully do it? For example, companies admit that diversity programs are often scaled back during business downturns.
But business professors warn that such actions will hurt performance over time, because adding diversity to teams improves their success, especially in this period of rapid technological innovation and change. Columbia University Graduate School of Business professor, Katherine W. Phillips, who studies the dynamics and successes of small work teams, says that diverse teams promote more openness to new ideas and creative thinking, resulting in statistically measurable better outcomes for analysis, problem solving and management decision making. As the energy industry faces rapid change, new ways of thinking will be critical.
Research also shows that having women in upper management contributes to long-run performance by lessening the chances of risky, damaging strategies being adopted – something the oil and gas industry has seen a lot of. But it can be harder to reach consensus in non-homogenous groups – a real circumstance that some industry managers have difficulty adjusting to.
So, what should companies do to ensure the retention of diverse talent? Formal programs such as resource groups, CEO-sponsored task forces, child care subsidies or on-site programs and “returnship” programs for employees who chose to stop working for a period of time – to care for a sick relative or for a child after birth or adoption – have helped improve retention and promotion of high-performing women and minority employees.
To increase diversity in the pipeline for upper management and executive positions, companies have developed programs at different career stages that identify top talent and focus on developing them through formal management training and leadership programs, while ensuring program participants are diverse across functions, gender and ethnicity.
More frequent positive feedback can also make a difference. Such actions have been shown to be statistically more effective than more commonly used programs, such as mandatory diversity training and hiring test assessments, which can stimulate unintended backlash effects. But, as one of our seminar participants noted, continued positive feedback without being offered promotions can lead to confusion and frustration.
Self-managed teams and reverse mentoring programs where knowledge sharing flows in both directions for mutual training in the new automated, digital age can mitigate perceptual biases by demonstrating the knowledge and skills of younger workers to older leaders and speeding the process of cross training.
Then there is the most obvious of actions: Provide positive feedback so that top performers know their efforts are appreciated.
One senior woman summed it up well: “I left a company I really liked because I couldn’t see how my career could progress there. After I left, everyone was shocked. They told me how disappointed management was because they believed I would have a great future in the firm,” she explained at the seminar. “I had no idea.”
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