Why the energy industry is failing to retain talent

Kim Pullinger, Contributor · 02 May

Average staff turnover was 9.7% in the energy industry for 2017, making it the eighth highest industry for turnover that year.

With hourly contract workers costing between 30–50% of their annual salary to replace, and executives up to a staggering 200–400%, HR professionals need every inch of help in an industry which employs 181,000 in the UK.

The issues with staff retention in the energy industry

1. People’s perceptions

From increasing costs to poor customer service and tax breaks to environmental disasters, many people have a negative image of energy companies. And this outward impression can result in talent going elsewhere or not wanting to join in the first place.

Finding ways to break through this image is key to making the industry more attractive to graduates and aligning with the changing environmental perceptions of current employees.

Environmentally polluting chimney

2. Outdated HR operating models

Nevermind the last decade, in the last year, the HR industry has changed rapidly – with some criticising the energy industry for not keeping up. Having a friend who works in oil & gas who often says: “They’d never consider that at my place,” whenever I talk about Perkbox’s employee benefits, makes me agree with those criticisms.

HR departments need to make sure they’re up-to-date with employee expectations.Leave it too late and talent will feel unappreciated and move elsewhere.

3. Losing experience through retirement

Vital knowledge and experience is being lost from the energy industry as it’s ageing workforce retires and is replaced by younger employees. While their millennial replacements may be technically proficient, it takes time to develop industry-specific knowledge required to the job efficiently.

Tempting retirees to stay on part-time and mentor new employees will help to keep their knowledge in the industry, as well as making it a more attractive proposition to graduates who may fear making mistakes.

Retirement party for female employee

4. Lack of STEM talent

Science, technology, engineering and maths (STEM) graduates are vital to the energy industry but their transferable skills are also extremely attractive for almost every other sector. And there’s a lot of companies in those other sectors who’s employee benefits packages are above and beyond.

A lack of appealing benefits combined with the perception of the industry, and it’s easy to see why the energy sector is struggling to retain their talent.

3 ways HR can solve this

1. Embrace diversity

White males are the largest group represented in the energy industry’s demographics – BAME (black, Asian, and minority ethnic) backgrounds are seriously underrepresented. This can lead to much of the new BAME talent choosing to work for employers who they believe will take a greater interest in their input and ideas.

Taking positive steps to redress this balance can go a long way to solving the energy industry’s talent retention problems. As well as making an effort to recruit a more diverse workforce, the industry can also take steps such as promoting an inclusive environment. For example, it can do this through diversity training and focussing on organisational and systemic changes that benefit everyone – rather than just the white male demographic.

Young woman on energy apprenticeship

Diversity can also come in the form of recruiting. Apprenticeship programmes have proved successful for some in the energy industry as companies can train them in the way which they choose. Especially important when looking to replenish knowledge gaps which might be being lost to retirement. Apprenticeships also encourage employment from diverse backgrounds as they’re a welcome alternative to going to university. An easy way to bring in different perspectives to the industry.

2. Keep up with HR developments

How employees are treated can play a huge part in staff retention figures and offering a decent salary isn’t enough anymore. Employees want to see that their employers care about them and are taking steps to make their working environment is as good as it can be. Offering generous holiday allowances, wellbeing schemes, private medical insurance, and flexible working hours, are all ways that employers can prove to employees that they care about them on a human level.

3. Expand focus

The environment is possibly one of the biggest causes of concern for young people. Looking to work for energy companies who don’t align with those values will be low on their agenda.

Wind turbines on water

While there are political and business factors which govern the current focus on fossil fuels, having conversations on this topic now can greatly improve the chances of hiring the best talent within the next five years. While it will have profound effects on the Earth, it will also help companies in the energy sector from becoming extinct.

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