DEI: Fuelling your competitive advantage 

  
 
In the era of Energy Transition, more jobs are shifting towards Artificial Intelligence (AI) and digital technology which leads to new talent requirements. Advanced technology reduces dangerous environmental impacts and increases employees’ physical and psychological safety, which is leading to the attraction of different talent to the industry. Even though the energy sector has been making a concerted effort to address diversity, equity and inclusion (DEI), the industry lags behind in building a workplace that reflects these values. Gender and racial disparities in the energy industry have been observed around the globe. As the energy transition continues and the demand for a low-carbon economy grows, embedding DEI into energy firms’ organisational models will determine the future shape of the traditional-, as well as the sustainable-, power chain.

Talent shortages in the transition to greener energy

  • Artificial Intelligence
    AI and other advanced technology help to automate unattractive hands-on work but also require new skills. The industry is in need of new young professionals yet 44% of Generation Y and 62% of Generation Z say a career in oil and gas is unappealing.
  • Balanced offshoring
    Doing more with fewer resources and gaining flexibility and innovation through offshore outsourcing has become increasingly important for companies that compete worldwide.
  • Reconstruction of work
    The new, agile approach towards how the Energy sector operates will determine the future of the business. Modern work design boosts agility, efficiency, productivity, attraction and retention - the right work operating system, combined with clarity on current and future skills needed, and offering flexibility can make a significant difference. Creating this speed and agility in a very rapidly changing environment is a must for the sector.
In the transition to a low-carbon economy, the energy sector needs to identify professionals with transferrable skills outside the industry and integrate talent with a wider range of skills. 

Psychological safety

  • Energy sector workers face challenges to mental health and well-being. Stigma and in some cases, a lack of psychological safety, remain a pervasive barrier to workers seeking and accessing support.
  • More than one in five (22%) members working in electricity supply feel overwhelmed or highly stressed most of the time or every day.
  • 40% of onshore and offshore remote rotational shift workers experienced suicidal thoughts while on duty, with nearly one-third meeting the benchmark for clinical depression while on rotation. Offshore workers are up to 15 times more likely to die by suicide than their counterparts onshore.
  • Fatigue, stress and mental ill-health are affecting energy employees and impeding individuals’ ability to make sound operational decisions and potentially increasing the risk of accidents.

Representation and inclusion

The Energy sector is one of the least gender diverse. Women make up 27% of the organisational workforce in the energy industry, with only 24% at the senior manager level. 

Women are statistically less satisfied with career development opportunities and the working environment.

Females [in the energy industry when compared with other sectors] are less satisfied with their overall career and development opportunities and have a less favourable view of having a safe working space.
Lea Lønsted

Mercer's Pay Equity Leader for Europe and the UK

In light of the talent scarcity crisis, bridging gender and other historically marginalised groups’ disparities will be key to a successful energy sector transition and post-COVID recovery. 
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The chart shows female vs male representation in the energy sector with females making up just 27% of the total workforce. The highest roles being in professional roles (32%) followed management and senior mangers (24%), then Directors at 22% and support staff at 21% female representation. 100% of Executives in the sector are made up of men.

Case study

The Energy firm wanted to create an innovative and inclusive employee value proposition

  •   Client challenge

    Mercer helped to build a picture of the current state through workforce analysis and employee listening, inspiring their leaders through innovative “as-is” and “to-be” workshops, and identifying concrete, priority actions to build a more inclusive and attractive employee value proposition in an action plan.

  •    Solution

    As an outcome, the company has introduced attractive and inclusive benefits (incl. family flex, real-time recognition, additional time off); revisited talent management processes (refreshed competencies; L&D programs; updated HRIS), and increased transparency – refreshed intranet; voluntarily sharing gender pay gap.

Impact

  • Leaders were engaged after being included throughout the process and are driving the agenda authentically.
  • Employee engagement scores skyrocketed in the months that followed and the firm sits above the benchmark in many employee listening metrics.

Why Prioritise DEI? 

Transitioning towards more sustainable models requires new ways of thinking which comes through having different minds. Employees with different backgrounds and life experiences bring their own unique strengths to help teams tackle problems, uncover new ideas and create the right environment for innovation to thrive.

According to Gallup Millennials and Gen Z are looking for organisations that: Care for their well-being; are ethical, with open and transparent leadership and have a diverse and inclusive culture.

Energy companies must make themselves attractive to younger generations, given that Millennials perceive oil and gas as one of the most unappealing industries to work in globally.

Safety has been a core strand of the industry DNA for many years. Mercer have observed a pivot to focus on mental health and wellbeing during the COVID years which look to continue for good reason. When people feel safe and supported, they become more confident and engaged in their careers, resulting in higher productivity and innovation.

With such severe statistics around mental health for the industry and recent desires from the UK to create an industry charter in this area, prioritising the employee experience, especially from a well-being and inclusion perspective will be critical. Workplace factors such as improved behaviours, inclusivity and sustainable work played a far greater role in supporting the mental health of employees than access to employee assistance programs alone.

  • Only 40% of energy firms train managers on how to build inclusive and equitable team arrangements
  • Only 40% of energy firms have a crisis management strategy or process

The time for energy to focus on the people agenda is now.

Clearer career paths and pay transparency are key levers for employers to attract, hire, and retain top talent in an evolving workforce.

  • Only 18% of energy organisations make career and pay band information available to all
  • The unadjusted gender pay gap in the Energy sector is 6.1%

To ensure career equity, organisations need a fair and unbiased career framework and talent management process to equip all employees with the same access to opportunities for growth, as well as inclusive and sustainable benefits that support all family structures and demographic groups.

What you should focus on

Progressive organisations embrace today’s challenges, seeing them as opportunities to prepare for a better tomorrow. Creating an environment where employees feel psychologically safe, with an inclusive culture and strong leadership is pivotal for the energy sector.
  1. To address representation and inclusion
    Mercer will help you analyse your hiring, promotion and turnover data by demographic group to create a talent flow map and identify the most impactful levers for taking action through Mercer’s proprietary ILM mapping. Mercer will also review and improve your 3 P‘s (policies, processes and programs) to make sure you are meeting the needs of all of your employees and challenging areas where bias may fall in. 
  2. To improve psychological safety and culture
    Mercer will help you to listen e.g. Digital Focus Groups or Employee Surveys to identify the pain points, concerns and challenges of employees and take action to improve the culture, from inclusive leadership, through to governance and accountability.
  3. To fill talent gaps
    Mercer will help you ensure career equity with a fair career framework and talent management process including reskilling, upskilling, and cross-skilling your employees, widening your talent pool and de-biasing performance management to provide opportunities for advancement and compensation, helping to support pay transparency conversations and help you to elevate your EVP.
  4. Measuring pay equity
    A tangible way of determining how a company values its employees. Mercer can conduct Pay Equity Analysis as a part of an annual compensation review process to limit legal risk, proactively prepare disclosure, support your pay transparency needs and accelerate workforce diversity.
  5. To ensure an equitable employee experience
    Mercer can also assess your health and wellbeing benefits through a DEI lens to identify gaps and opportunities for inclusive benefits.

To learn more contact:

Lucy Brown, DEI Senior Consultant
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