The Middle East energy sector:
A global powerhouse in transition
The Middle East energy sector: A global powerhouse in transition
The Middle East has long been at the heart of the global energy industry, playing a critical role in ensuring energy security with some of the world’s largest oil and gas reserves. National oil companies (NOCs) and international firms in the region have historically focused on large-scale hydrocarbon production, making the Middle East a powerhouse for global energy supply. However, as the global energy landscape evolves, the region’s energy companies are evolving their strategies to remain competitive, ensuring long-term growth and contributing to a more sustainable future. Specific shifts are driving greater focus on having the right skills in the organization, with skills being the third topmost priority for HR leaders in both the oil and gas and power, utilities and renewables (PURE) sectors. Research shows that leading with skills pays off, as of those that are further ahead on the journey to becoming skills-powered organizations, 92% in the oil and gas sector and 92% in the PURE sector have already reported seeing a positive impact, with 40% or more in the sectors seeing the following benefits:
- Better sharing of talent across departments
- Faster talent development
- More relevant employee development opportunities
- Improved employee retention
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1. Shifting from operations to asset management
A key aspect of this transformation is the international expansion of Middle Eastern energy firms, particularly NOCs, as they seek to diversify their portfolios beyond regional hydrocarbon revenues. This shift requires a fundamental change in how these companies operate. Traditionally, they have been operationally focused, managing large-scale production sites and refining operations. However, to succeed on a global scale, they must transition into asset managers, placing greater emphasis on commercial acumen, strategic investment decisions and risk management. To achieve this, employees will need to develop skills beyond engineering and production, encompassing financial expertise, deal structuring, market analysis and stakeholder engagement. -
2. The impact of technology and AI
Technology and artificial intelligence (AI) are reshaping the future of work in the energy sector. Automation, predictive analytics and AI-driven decision-making tools are streamlining operations, reducing downtime and enhancing efficiency. While these advancements create new opportunities, they also demand a shift in workforce skills. Employees must be equipped with technological proficiency, ensuring they can leverage AI, data analytics and automation tools effectively. Not only will this impact the operational workforce, but it will also include those in areas such as finance, procurement, human resources and communications. This transition will require a collaborative effort between industry players, governments and educational institutions to design training programs that build future-ready skills. -
3. Engaging and empowering the workforce
Expectations are also changing within the workforce. Mercer’s research shows that only 40% of employees say that their current role aligns with their motivations and makes the best use of their skills. Engaging and empowering the workforce will be crucial to ensuring success. Organizations must foster a culture of continuous learning and innovation, encouraging employees to take ownership of their professional development. Providing clear career pathways, mentorship programs and incentives for skill enhancement will be key to maintaining a motivated workforce. Not to be underestimated is the role of leadership in communicating the vision for becoming a skills-powered organization, including explaining how AI will impact jobs and the plans for upskilling. By equipping their workforce with the necessary skills and fostering a culture of adaptability, Middle Eastern energy firms can strengthen their global position and drive the sector’s transformation in an increasingly competitive and technology-driven world. -
4. From planning for headcount to planning for output
Historically, across energy organizations in the Middle East, growth has often been associated with an increase in workforce size. However, driving sustainable efficiency today requires a different approach. Instead of simply expanding headcount, companies should focus on broadening how work gets done — leveraging the full-time workforce, AI agents, project-based teams and contractors. Investing in workforce development programs such as cross-training, leadership development and advanced planning enables organizations to build a more agile and versatile workforce. This allows employees to take on multifaceted roles without proportional increases in headcount.
It's also important to recognize that revenue in the energy sector isn’t always directly linked to workforce size. For instance, when energy/oil/gas prices rise, revenue tends to increase regardless of staffing levels. This highlights that productivity — doing more with less — is often a more effective growth driver than simply adding staff.
Despite the adoption of sensors, advanced analytics, and other technologies, many energy companies have yet to fully reimagine and redesign their work processes. The core responsibilities and workflows often remain unchanged, even as technology provides new tools. This presents a significant opportunity to rethink work responsibilities and optimize operations more strategically.
Looking ahead, long-term workforce planning must incorporate the integration of new technologies. As automation and digital tools become more prevalent, developing the right skills and capabilities will be essential. By proactively aligning workforce development with technological advancements, energy companies can stay agile, innovative and competitive in an evolving landscape.
Career pathing challenges in the energy sector
One of the biggest workforce challenges in the Middle East energy sector is career progression. Many companies still rely on a lock-step, tenure-based progression model, where advancement is based on years of service rather than capability or readiness. As a result, employees often reach a ceiling in their roles with limited visibility into future career opportunities, leading to stagnation and disengagement. Mercer’s data has long shown that career development is an issue for employees across the energy value chain with only 55% of energy employees saying they have the opportunity for advancement at their current company and only 62% have a good understanding of the possible career paths for someone like them at their firm.
This issue is particularly pronounced among national employees, who are increasingly seeking career growth and skill development rather than remaining in static roles. Companies need to rethink their engagement strategies to provide clearer career pathways, mobility opportunities, and skill-based advancement structures that align with employees' aspirations.
Additionally, the way roles are structured within organizations presents another challenge. Many job positions are tied to specific departments rather than broader job families and sub-families, which limits employees' ability to transition into similar roles requiring comparable skill sets. A more flexible, skills-based approach to job structuring would allow greater workforce mobility and adaptability in the face of changing industry needs.
Furthermore, most skills frameworks in the sector remain heavily focused on technical expertise, neglecting behavioral and future-ready skills such as leadership, digital literacy and strategic thinking. Many organizations also rely on competency frameworks rather than a granular skills-based approach (see Figure 1), which fails to provide the agility needed to keep pace with rapidly evolving job requirements, particularly as AI and automation transform work environments. To compound the issue, job architectures and job descriptions are often outdated, failing to reflect new strategic directions and emerging roles in the industry. Addressing these issues will be key to building a more dynamic, future-ready workforce.
Figure 1. Examples of shift from competencies to skills
| Competencies | Skills | Competencies | Skills |
| Fuel pricing | SQL Economics Tableau Advanced Mathematics |
Drilling | Directional drilling Safety standards Mechanics Geology |
| Production operations management | Process Improvement Forecasting Purchasing Quality management |
Production
|
Equipment Inspection Lock out/tag out Problem solving Process improvement |
| Extraction plant operations | Boilers Water treatment Laboratory testing Turbines |
Derrick operations | Hydraulic jacks Drilling fluid Well control Solids control |
To modernize career progression, companies need to move from unstructured career paths, where employees rely on informal networks and limited visibility into career opportunities, to structured career paths powered by skills-based job architectures. A well-defined job architecture creates consistency and transparency in career progression by mapping skills to jobs, ensuring clear definitions of job families and sub-families, and standardizing the skills required for various roles. This structured approach allows organizations to align jobs based on the type of work and skills rather than arbitrary departmental structures.
A critical component of this shift is the need for a governance framework to ensure consistency in defining job roles, linking them to skills and providing a structured approach to human capital management. This approach allows employees to better understand their career options and how their skills align with potential future roles.
Implementing a structured job architecture brings significant benefits to both employees and organizations:
- Career ownership and empowerment: Employees gain visibility into different career options, enabling vertical, horizontal or diagonal moves within the company rather than being confined to rigid career ladders.
- Transparency in skills and career progression: Employees can assess their current skills and proficiencies against the requirements for desired roles, making career progression more predictable and merit-based.
- Precision in learning and development: A structured job architecture enables organizations to offer targeted learning and development programs based on skill gaps, ensuring employees are equipped for their next career moves.
- Enhanced global mobility: Employees can access and apply for roles across the organization, regardless of location. Prioritizing internal hiring and mobility based on skills allows companies to optimize their workforce before seeking external hires and adding headcount.
By implementing a skills-based job architecture, Middle Eastern energy firms can create a more dynamic and agile workforce, ensuring that career progression is transparent, skill-based and aligned with evolving business needs.
How to get started?
- Skills-powered strategy — develop your ‘north star’ or vision for skills, metrics, guiding principles, glossary of terms and key definitions for skills, governance, and roles and responsibilities.
- Job architecture foundation — review and refresh the job architecture to ensure that it is designed around common skills, rather than departments.
- Skills frameworks — building skills frameworks, skills libraries and mapping skills to jobs. Evaluate your technology providers and develop skills measurement strategies.
These foundations will facilitate skills-powered career pathways for employees, which can be enabled by your HRIS or technology partners.
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