INDUSTRY BREAKOUT SESSION ENGINEERING, ENERGY AND …

INDUSTRY BREAKOUT SESSION ENGINEERING, ENERGY AND MINING

Helena Wennberg

Nordics

Ellyn Karetnick

UK

3-4 APRIL, BUDAPEST, HUNGARY

MERCER 2014 EXPATRIATE MANAGEMENT CONFERENCE 1 1

Today’s Speakers

Ellyn Karetnick

UK [email protected]

Helena Wennberg

Nordics [email protected]

MERCER 2014 EXPATRIATE MANAGEMENT CONFERENCE 2 2

Agenda What We Will Cover Today

• Talent Outlook: Setting the Scene

• Key Mobility Challenges

• Sharing Experiences

• Tops Tips and Strategies

Section 1

TALENT OUTLOOK SETTING THE SCENE

MERCER 2014 EXPATRIATE MANAGEMENT CONFERENCE

Understanding the Talent Market

Industry Labour Market

Employee Engagement

Labour Availability

Workforce Practices

Employment Proposition and Cost

4 April 4, 2014

STRATEGIC WORKFORCE

INSIGHTS

Global Employment Costs

Internal labour market analysis

Workforce Practices

Engagement Analysis

External labour market analysis and forecast

Compensation and benefits globally

Prevalence and good practices on: • Talent Challenges • Sourcing and selection • Contractors/Contingent Staff • Rewards/Employment

Proposition • Training and development • Performance management • Retention • Workforce Planning

Employee preferences

Insights drawn from multiple regions, With labour flows and workforce-planning implications

• Demand: job-families and “hot” jobs

• Supply: country/region and 5-year and 10-year

• New entrants • Quantity and staffing

benchmarking • Mobility


Talent Outlook Global Headwinds

Global Workforce Challenges of 2030

• To maintain historical rates of GDP growth, “aging advanced” economies will need to increase productivity growth by 60%

• The growth rate of the global labour force will fall by nearly a third

• A shortage of 16 to 18 million high-skilled workers in advanced economies (13% of demand)

• A shortage of 45 million medium skilled workers in developing economies (15% of demand)

• “Aging advanced” economies have the highest GDP per capita and educational attainment and also the oldest populations, making it more difficult to supply high-skilled talent from domestic sources

• China and India will supply nearly 60% of the new net workers added to the global labour pool and largest suppliers of college educated workers

• Unemployment is not a good barometer of available talent when unemployment for the least skilled are 2 to 4 times those of the most highly skilled workers whether the economy is in recession or recovery

Innovation

Human capital

Global political / economic risk

Government regulation

Global expansion

Cost optimisation

Customer relationships

Sustainability

Corporate brand and reputation

Investor relations

Primary Business Challenges

Source: McKinsey Global Institute Source: Conference Board CEO Report

5


Global Workforce Challenges of 2030 Energy Workforce Challenges

The growth rate of the global labour force will fall by nearly a third

A shortage of 16 to 18 million high-skilled workers in advanced economies

(13% of demand)

A shortage of 45 million medium skilled workers in developing economies

(15% of demand)

China and India will supply nearly 60%of the new net workers added to the global labour pool and the largest suppliers of

college educated workers

The U.S. will need 1M additional STEM graduates in the next 10 years -- an increase in STEM degrees of +33%

In NA by 2020 as many as 600,000 new energy jobs will be created and 1.1 million

in related industries

45% of workers are above age 45 and nearing retirement with no adequate

replacement for this knowledge / expertise

25% of Energy CEOs say a lack of qualified personnel is already impacting operations

6

Talent Outlook Global Headwinds


Talent Outlook What’s on the Minds of Energy CEOs?

Source: Ernst & Young

Top Business Risks

Access to reserves

Uncertain energy policy

Cost containment

Worsening fiscal terms

Health, safety and environment

Human capital deficit

Unfamiliar environments

Climate change

Price volatility

Competition from new technologies

Industry Human Capital Risks and Challenges

1. Aging workforce, bimodal workforce

2. Scarcity of skilled technical talent

3. Scarcity of skilled trades talent

4. Sourcing talent and mobility

5. Turnover in critical roles

6. Career development ‘choke points’

7. Accelerated compensation & benefits competition

8. Inadequate leadership succession pipeline

9. Creating a unique and compelling value proposition

10. Inadequate training & development processes

11. Motivating and engaging the workforce

12. Sector brand image

7


Talent Outlook Market Intelligence

• Engineering itself requires innovation and transformation in order to generate more interest

and enrolment. New approaches must be developed in education and training, notably hands-

on, problem-based learning that reflects engineering’s problem-solving nature (UNESCO)

• Not enough engineering graduates are entering into long-term employment in the sector.

Three years after graduation, just under 70% of male and 50% of female graduates from

engineering and technology programs are working in their chosen fields (Royal Academy of

Engineering, UK)

• Employers continue to rely more on “buying” over “building” talent to fill open positions

(Mercer Talent Outlook and Workforce Survey)

• Immigrants already constitute 20% of engineering professionals in the UK, across

sectors that include oil and gas extraction, aerospace, and computer, electronic and optical

engineering – but more are still needed to fill the shortage of engineers (Royal Academy of

Engineering, UK)

8 04 April 2014


Talent Outlook Market Intelligence

• Oil and gas companies are facing a talent shortage across all critical occupational groups

(Mercer Talent Outlook and Workforce Survey)

• Only 28% of oil and gas companies believe they have an effective workforce plan in place

(Mercer’s Talent Barometer Survey)

• Nearly 90% of senior HR executives at 22 top international oil and gas companies believe

their industry faces a talent shortage and call the problem one of the top five business

issues facing their companies. 88% of respondents cited increasing compensation as their

primary solution to attracting and retaining talent (E&Y/Rice University survey)

9 04 April 2014


Section 2

TALENT OUTLOOK KEY MOBILITY CHALLENGES


• Definition and types of mobility

• Flexibility vs. consistency and fairness

• Mobility analytics

• Project-based assignments

• Managing costs

• Dealing with Fx rate fluctuations

• Housing allowance data (Middle East)

• Localisation of expatriates

• Social security and pension for rotators

• Governmental demands for expatriates to contribute to local social security

and pension schemes (Latin America)

11 04 April 2014

Talent Outlook What’s on Your Mind?


Section 3

TALENT OUTLOOK SHARING EXPERIENCES


Based on early input from today’s participants, the key focus areas below

have been compiled for our group discussions:

1. Operational assignment management

– Managing expatriate costs and local benefits

– Specific assignment type issues (eg. rotators)

2. Developing and using mobility analytics

– Is your organisation tracking and reporting data?

– Is there co-operation and alignment between overall Talent

Management and Global Mobility practices in your organisation?

What are your organisations doing? Considering?

13 04 April 2014

Talent Outlook Sharing Experiences


Section 4

TALENT OUTLOOK TOP TIPS AND STRATEGIES


• Strike the right balance in “building” and “buying” talent. Create a more

integrated approach to global workforce planning that is scalable. Recognise local

realities – nationalisation strategies can help grow talent pools.

• Define assessment criteria. Tighten your focus on talent sourcing. Effectively utilise

existing planning tools to identify critical talent groups.

• Leverage gamification and social media. Innovative sourcing and selection of the

right talent for assignments is critical in managing a multigenerational workforce.

• Match global mobility programmes to talent management strategies. Define

your global mobility philosophy. For each assignment, consider whether it is growing

the business, developing global leaders, or filling a critical skills gap – do not leave

talent mobility to chance.

• Embrace cross-functional collaboration. Key to managing and optimising a global

workforce.

15 04 April 2014

Talent Outlook Top Tips and Strategies


QUESTIONS

Documents

INDUSTRY BREAKOUT SESSION ENGINEERING, ENERGY AND …