Oil & Gas Industry: The Talent Conundrum
However, there is opportunity for organizations to invest on communicating the merits of
Total
Rewards
Effective communication helps ensure that employees ‘see’ and understand the value
proposition
of the organization’s Total Rewards package and creates realistic expectations among leaders, managers and
employees by
regularly communicating business results and its impact on pay. Communicating the true value of Total Rewards in
the right
way is very critical for talent retention. Employees only perceive the number in the pay slip as their total
rewards but the
reality is that many elements, apart from the fixed and variable pay are actually communicated to employees in
best-in-class
organizations; which is not the case with O&G organizations. Organizations spend heavily on communicating
retirement
benefits, perquisites, learning and development, career opportunities, etc. to all their employees. Only 3 of 7
organizations
in the O&G sector currently communicate their Total Rewards philosophy to their employees. Most organizations
in this
sector do not have a Total Rewards philosophy in place and therefore, communicate information on these elements
through
monthly meetings, or HR updates.
In conclusion
With economic reforms and new geo-political developments, the central government is planning new exploration
norms to woo
leading investors. The entry of new players will add to the already burgeoning “war for technical
talent”. With
the issues of ageing workforce, increasingly expensive extraction to reach the reserves, requirement of
increasingly
specialist skills, the cost of talent is likely to be pushed up further.
Figure 4: Communication of Elements of Total Rewards in Best-in-Class Organizations
The key focus of most of the oil & gas upstream players hence, remains on retaining critical talent. This has
prompted
organizations to adopt a focused rewards philosophy which is unique and
differentiated and at the same time aligned to business and talent objectives. Given the nuances of this sector and
given the talent implications, organizations will need to embrace more best-in-class HR practices to keep ahead of
the curve.
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