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Strategies to Fuel the Energy Workforce

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  • Strategies to Fuel

    the Energy Workforce

  • 3Strategies to Fuel the Energy Workforce

    Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

    Report One: The Energy Workforce Crisis . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

    Report Two: Whats Working in Energy Workforce Development . . . . . . . . . . . . . . . . . . . . . 18

    Report Three: Rebranding Energy Jobs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

    Report Four: A Call for Collaboration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

    Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

    Table of Contents

  • Methodology: The Manpower Energy Workforce Study

    To capture stakeholder concerns about and strategies for overcoming the talent shortage in the energy industry, Manpower conducted a series of 17 one-on-one phone interviews with human resource executives, training and education experts and workforce development advocates in the U.S. and Canada energy industry. Interviews were conducted between September 6 and November 25, 2013 according to a predetermined questionnaire. In addition to the insights obtained, the interviews informed a subsequent online survey of 26 questions. The online survey was distributed via email to more than 6,000 energy company executives between November 5 and December 20, 2013.

    Responses (n=76) are equally distributed between upstream (exploration and production), midstream (transportation, storage and wholesale marketing), and downstream/utilities (refinement, processing and delivery). Sixty-five percent of respondents hold job titles of Manager/Supervisor or Director. Forty-eight percent work in human resources with the remainder in operations, technology or other functions. Twelve percent of survey respondents work for companies employing fewer than 250 employees, 18 percent with 250-1,000 employees, 44 percent with 1,000-5,000 employees, and 33 percent with more than 5,000 employees. While only five percent of survey respondents indicate their companys home office is based in Canada, 28 percent of survey respondents report operating in Canada.

    In addition to the primary research data, statistics from various secondary research sources were used in the preparation of this report to substantiate or contrast the research findings.

    Given the small sample size, only survey outcomes that show a significant and consistent majority of opinion are cited here. Survey outcomes in this report are not statistically projectable.

    Existing research data for the energy industry is compiled largely by sub-sector (e.g., oil and gas, solar, utilities) and cannot be aggregated to represent the diverse nature of the energy industry as a whole.

    5Strategies to Fuel the Energy Workforce

  • The energy industry in the United States and Canada is changing dramatically . It has the opportunity to transform from an industry in decline, to one of growth and opportunity . However, to fully realize its growth potential, the industry needs access to the right talent supply .

    Without that talent, billions of dollars in energy company investments and new technologies could go to waste . The potential to be a leading global exporter of energy could go untapped . Establishing a competitive advantage for talent above and beyond that of growing industries, such as information technology and health care, is essential .

    Talent is the new driver of growth for the 21st century . Manpowers new four-part series, Strategies to Fuel the Energy Workforce, examines todays talent shortage, the drivers behind it, mistaken perceptions about the industry, and the best practices of companies and educators . It provides a framework for understanding the workforce strategies that energy companies can use to gain competitive advantage and ready themselves to compete domestically and globally .

    OVERVIEW

  • 7Strategies to Fuel the Energy Workforce

    To understand what keeps executives up at night and learn more about the innovative workforce practices that are getting results, Manpower conducted a series of one-on-one interviews with energy company executives, educators and workforce advocates in North America. In addition to providing rare insights into this topic, the interviews informed the development of an online survey that helped quantify the scope and urgency of the talent shortage.

    What emerged is a sobering picture of immediate needs and a future with grave loss of opportunity unless proactive and cooperative action is taken. Business leaders must be able to make faster decisions with a nimble and agile workforce to get at the heart of the solution.

    The study is presented in four reports: Report One: The Energy Workforce Crisis, focuses on the drivers of the talent shortage,

    namely a double squeeze on workforce talent. High rates of retirement create a gap in the talent needed, while a broken education system and clogged pipeline of skilled entry-level employees give cause for increasing concern. Meanwhile, rapid technological change is reinventing the industry and simultaneously making it difficult to forecast talent needs.

    Report Two: Whats Working in Energy Workforce Development, examines the best practices of companies and educators working to overcome the talent shortage. Four strategies are discussed: 1) building the supply of skilled workers, 2) increasing access to talent, 3) mitigating the demand for new talent, and 4) forming cross-sector collaboration to scale best practices.

    Report Three: Rebranding Energy Jobs, looks at a largely understated problem: the need to rebrand energy jobs to better appeal to younger workers. Negative perceptions and misinformation about todays energy jobs among parents, students and career counselors have led to a generation of skilled workers steered toward information technology and healthcare jobs over good-paying energy positions.

    Report Four: A Call for Collaboration, proposes a path forward for the industry and outlines what executives, policy makers and educators can do today to ensure a brighter workforce future.

    The bottom line is that the talent shortage in the energy industry has become too large and complex a problem for any one stakeholder or group to solve. Collaboration between companies, educators and government is necessary to ensure that companies thrive, and the energy sector remains a key driver of economic growth for decades to come. Companies need to share their needs more openly while educators need to focus on early STEM education and build portable and standardized curricula customizable to changing needs and technologies. The series provides a blueprint for navigating the certain uncertainty that characterizes the energy industry.

  • The North American energy industry faces a unique double squeeze of its workforce with shortages of skilled workers at both the entry and the senior levels . Three factors are driving this trend including the aging out of the workforce, rapid technology and innovation advances, and a breakdown in education at every level . As a result, the industry finds itself lacking the talent it needs to capitalize on growth opportunities .

    The Energy Workforce Crisis Report One:

  • 9Strategies to Fuel the Energy Workforce

    The energy industry in the United States and Canada is changing dramatically. It has been transformed from an industry in decline to one of growth and opportunity. New technologies combined with increasing global demand for energy, positions the United States and Canada to benefit as two of the worlds leading exporters.1

    The energy industry is investing billions of dollars in new technologies, capital and reserves. By mid-decade, half the households in the United States will have a smart meter.2 The Canadian Energy Research Institute estimates that $253 billion will be invested in new oil sands capacity over the next quarter century.3 However, companies can only maximize their return on investment when they have the workers with the technical knowledge and expertise to leverage it. The industry clearly needs a new type of technology-savvy workforce to fully realize that value.

    Today, an energy companys ability to compete and realize economic growth relies on a skilled workforce. This is especially relevant for the energy industry since it is one of the most capital-intensive industries. Historically, that has translated into the use of traditional capital assets and investments to drive growth. The urgency today however is to transition to a focus on human capital that addresses the looming talent shortage. ManpowerGroup defines this as the Human Agethe era in which talent is the new driver of growth, eclipsing the importance of physical assets as the competitive differentiator.

    Some energy companies identify that a talent shortage is already putting the brakes on growth and expansion. As global demand for energy increases, particularly in Asia and India, the U.S. and Canada are poised to supply it if they can find the workforce to support the industrys growth. If they cant, the lost opportunity is high. Global energy markets will go untapped, and the industry that contributed significantly to the rebound from the recession of 2008 will not realize its full economic potential.

    Some companies are already investing in workforce development and training. A review of the larger landscape reveals that many are reinventing the wheel developing in isolation their own unique outreach or training programs. This report sheds light on what keeps energy executives up at night and the strategies that help companies maximize their return on workforce investment (ROWI).

    Talent Shortage =Lost Opportunity

    Impact of Gap in Skilled Workforce

    1994 2014 2024

    Energy

    Demand

    Talent

    Technolo

    gy

    Talent

    Technolo

    gy

    Talent

    Talent

    Shortag

    e

    Talent

    Shortag

    e

    Technolo

    gy

  • 10

    The Energy Workforce Crisis

    The magnitude and urgency of the talent shortageToday many industries are facing a shortage of skilled workers. However, few are facing a shortage of the magnitude and urgency found in energy. The North American energy industry is extremely large and diverse employing nearly ten million people.4 It includes both conventional and unconventional sources of energy. Job roles are as diverse as the industry itself from utility linemen, to drilling rig workers, to wind farm operators and research and development engineers.

    Global energy is a growing market. According to the U.S. Energy Information Administration, worldwide demand for energy is projected to increase 35 percent between 2015 and 2035.5 This is largely due to the anticipated industrialization of China and India.6 Therefore, in addition to supplying energy needs at home, there is significant opportunity for the U.S. and Canada to become the new exporters of energy. This export opportunity is also becoming a focus of regulatory reform in Washington.7

    While some subsectors like nuclear energy and coal production have been stagnant or declining, an explosion of growth in the oil and gas sector has driven demand for energy jobs to new heights.

    Demand for energy jobs soar The U.S. shale oil and gas industry directly and indirectly employs 1.7 million people.

    By 2015, it is expected to rise by 50 percent to 2.5 million jobs before reaching 3 million jobs by 2020.8

    In the utilities subsector, it is projected 100,000 new jobs will be created by 2020 when a substantial number of utility employees reach retirement age.9

    The forecast for renewable sectors (e.g., solar and wind power) is slower but steady growth by 2020.10 Jobs in wind power alone are projected to double by 2030.

    One of the reasons that the talent shortage concerns energy executives is because they are experiencing the early signs of it today. More than half of energy executives say their companies struggle to find needed talent, while nearly three-quarters expect the problem to get worse in the next five years. In contrast, only 34 percent of all employers globally have difficulty finding staff with the right technical skills, according to ManpowerGroups 2013 Talent Shortage Survey.11 Yet, the jobs employers report having trouble filling are similar to those in the energy industry: skilled trade workers, technicians, engineers and IT staff.12

    Nearly three-quarters of energy executives

    72 %believe the ability to attract

    quality candidates to the energy industry will have a significant impact on North American competitiveness

    in the decades to come

    Manpower Energy Workforce Survey

  • 11Strategies to Fuel the Energy Workforce

    Since Canada and the United States compete in the global marketplace for energy workers, the uncertainty of factors such as expanded hydraulic fracturing in Mexico, China or Russia could further increase demand and competition for energy workers here at home.13 Should this occur, exporting energy workers in North America could become a critical issue. Mexicos recent decision to open up bidding on foreign investment and energy exploration only makes the issue more intense.

    In summary, while the talent shortage for skilled workers is a critical problem for business, its magnitude and urgency is especially acute in the energy industry where the lost opportunity equates to a loss of global competitive advantage and untapped opportunity for growth. How did this shortage come about? Manpowers research identifies three drivers of the talent shortage in the energy industry.

    Factors driving the double squeeze Through years of tracking macro-economic forces, ManpowerGroup identified four current trends impacting the world of work.

    World of work trends

    Demographics / talent mismatch Rise in customer sophistication

    Technological revolutions Individual choice

    These dynamics continue to intensify and are playing out in the energy industry as well. The result is that the energy industry faces a unique double squeeze of its workforce with shortages of skilled workers at both entry and senior levels.

    * Job roles vary signicantly by industry subsector

    Job Categories* in Greatest Demand

    Field WorkersLinemen, technicians, plant operators

    Skilled TradesIron workers, pipe tters, welders, electronic machinists

    Highly Educated Professionals Specific DisciplinesTransmission and distribution design engineers,eld test engineers

    58% of energy executives say their company struggles to find the talent it needs.

    74% say the problem will get worse in the next five years. Manpower Energy Workforce Survey

    Percentage of Energy Workforce Retirement Within 10 Years

    Canada

    U .S .

    0% 20% 40% 60% 80% 100%Sources: U .S . Department of Labor14 and Petroleum Human Resources Council .15

  • 12

    According to Manpowers research, the talent shortage in energy is driven by three main factors, which support the workforce trends.

    1 . Aging out . The issue of demographics and the talent mismatch, which affects energy companies in particular in the form of a

    rapidly aging workforce, speaks directly to the agility that competitive organizations now require. At the same time, more sophisticated customers (including organizational customers) with a global mindset demand a higher quality, faster experience than they ever have before.

    2 . Technology and innovation . Rapid advances in technology impact not only the talent needed, but how employers compete for available talent. In addition to technological revolutions that change the way people work, this is also impacted by the concept of individual choice, which connects a potential employees motivations and preferences to the potential employer of choice.

    3 . Breakdown in education . In many ways, the North American educational system has failed to consider demographic and technological trends in the world of work as educational priorities are set. This is of special concern to the energy industry, whose growth is dependent on a pipeline of students with adequate preparation in STEM.

    Driver #1: Aging out

    The first driver of the double squeeze on the energy workforce is retirement and attrition.

    While the global recession slowed retirement somewhat, it merely postponed the inevitable. Shrinking 401Ks, reduced consumer confidence and concerns about new health care laws in the United States resulted in thousands of energy workers staying in their positions.

    The Energy Workforce Crisis

    The Double Squeeze

    EnergyOpportunity

    EntryLevel

    Talent

    SeniorLevelTalent

    Technology& Innovation

    Education

    Retirement

    Energy Leaders Rank the Issues of Most Concern

    Issue Average Ranking*Aging workforce 2 .24

    Lack of qualified workers 2 .80

    The missing middle (lack of middle-aged workers) 3 .37

    Wage pressure induced by competition for talent 3 .71

    Limited pipeline in energy-related educational programs 4 .43

    Lack of qualified front-line leadership 4 .45

    *On a scale of 1 6. 1 represents the most important issue, and 6 the least important issue. Source: Manpower Energy Workforce Survey

  • 13Strategies to Fuel the Energy Workforce

    Interviews with energy executives show the aging workforce is the number one concern, followed by the lack of qualified workers and the lack of middle-aged workers.

    The unintended consequence of the aging-out problem is that there is both an experience and a leadership gap at the management level. Compounding the situation, the recession curbed professional development and training activities for younger employees. Now those employees are being tapped prematurely for leadership roles. Interviews with energy company executives reveal missing skills including leadership, business acumen, organizational preparation and time management.

    A lot of the younger set is being pressed more and more often to take on leadership roles at an earlier age because theres that 15- or 20-year gap in labor between the 50s and the 30s crowd, describes Josh Hickman, president, Young Professionals in Energy, Pittsburgh and head of Hickman Geological Consulting. It is up to the company to figure out ways to make them readyor throw them into the fire and figure out ways to manage that.

    Driver #2: Technology and innovation

    The second driver of the double squeeze on the energy workforce is rapidly changing technology. In energy, innovation is necessary not just to remain competitive, but also because the industry as a whole is undergoing a fundamental shift in focus. For example, the move into unconventional resources and new environments such as ultra-deep water in the Gulf of Mexico and the Arctic are presenting new technological challenges.

    The wide array of potentially unconventional sources means that companies without immediate access to the right technologies risk being left behind. Similarly, using technology to reduce costs and extend the life of conventional production through enhanced recovery techniques, will be critical to future commercial success. The potential of these new technologies is dependent on the workforce that will need to use them.

    Urgency with Utilities

    46 avg age of utility worker1650% of workforce is over 401636%

    of workforce to retire in 2 years17

    60% of workforce

    to retire in 10 years17

    18,000+ could retire at any time18

    Center for Energy Workforce Development Survey

    86% of executives say todays energy workforce requires a more complex skill set than it did five years ago.

    90% say todays laborers and front-line workers require higher levels of technical competency than they have in the past five years Manpower Energy Workforce Survey

    Aging Out + Lack of New Talent = Leadership Gap

  • 14

    The development of emerging technologies and the integration of existing technology into the energy industry are game changers for nearly all job roles.

    The increased use and innovation of horizontal drilling and hydraulic fracturing is accelerating the need for technological skills. Concerned stakeholders are also demanding increased sophistication from these technologies regarding their environmental safety and reliability. However, for the existing workforce many of their skills are not easily transferable, and training is a relatively slow process.

    Executives articulate how technology now defines the skill sets of the workers. Technology has become part of every job that we have, explains Ann Randazzo, executive director

    of the Center for Energy Workforce Development. And in some positions, like those in transmission distribution operations, it has totally changed the jobs.

    One example is the installation of hundreds of thousands of new smart meters by utility companies that collect and transmit usage data. This fundamentally changes the role of meter readers from manual data recorders to workers in IT departments who manage the computers and data from those meters.

    The need for technology skills for front-line leadership jobs also make career transfers from the contracting, coal or construction

    industries difficult. Front-line leaders now use a laptop to report back with spreadsheet programs, and linemen often must troubleshoot electronic devices attached to equipment up on the lines. However, many career changers have limited computer literacy skills.

    Susan Whisler, director of the Southern Alleghenies Workforce Investment Board, paints a vivid picture of the challenges associated with training career changers. We realized that we were dealing with functional [computer] literacyespecially where dislocation has affected large numbers of older individuals. In some cases, they have no computer experience and have no idea how to even hold a mouse, let alone how to use one as part of their job.

    Industry and educators agree todays workers must be tech savvy, explains Dean Randy Pacheco of San Juan College School of Energy. Employers tell us future employees need to be able to work in a technology evolution a worker can be provided, wirelessly,

    The Energy Workforce Crisis

    It can take between nine and 18 months to train a worker who may already have seven or eight years of oilfield experience and shift them into work that involves hydraulic fracturing. These are generally not university gradsthese are people that were trained on the job. The technology used in hydraulic fracturing and the increased activity in this area is leading to significant new training requirements.

    Cheryl Knight, former executive director, Petroleum Human Resources Council, a division of Enform Canada

  • 15Strategies to Fuel the Energy Workforce

    real-time data on production that type of virtual environment didnt exist 20 years ago. So, we have to change our courses to provide the education necessary to meet the industrys expectation.

    In some energy subsectors, such as utilities, those schooled in newer technologies may lack the knowledge associated with the older analog infrastructure that remains in use today. They are caught in a technological no mans land that is exacerbated by the aging-out problem. Industry executives report that this can be a challenge for front-line leaders, with one saying: Young people coming out of college are well prepared in the 21st century technologies, but they dont have the practical knowledge of the 20th century technology that constitutes most of our electrical system.

    Technology-based skill sets associated with big data analysis are not among the top-of-mind concerns of energy executives in interviews. Unlike the manufacturing and healthcare industries, big data issues are nascent in the energy industry. However, they are sure to be central to the next frontier for innovation, productivity and growth.

    Growing environmental concerns that include the prospect of stricter carbon emission controls are incentivizing companies to invest in technology and R&D. Those companies with workforces best able to overcome these challenges will be the most successful companies of tomorrow.

    Driver #3: Breakdown in education

    The third driver of the double squeeze on the energy workforce is a breakdown in the education of young workers. Energy executives consistently express concern about the lack of fundamental skills in STEM (Science, Technology, Engineering and Math) fields. Often, young applicants dont have the basic STEM literacy skills they need and it couldnt come at a worse time for the energy industry.

    This problem is especially acute for the hiring of potential craft laborers, such as linemen, that requires a high school education and passage of a basic aptitude test such as the Edison Electric Industry (EEI) skilled trade aptitude exam. Executives report to Manpower average pass rates of 40-45 percent with the most problems seen in applied math.

    Executives report pass rates of

    40-45% on basic skilled trade aptitude exams. Manpower Energy Workforce Survey

    Half of the Squeeze Incoming Talent

    EnergyOpportunity

    EntryLevel

    Talent

    Technology& Innovation

    Education

  • 16

    One industry leader describes it this way, Fundamental skills, applied mathematics and some of it is simple such as being able to calculate the area of a square, or translate feet to inches and yards to miles. More simple scientific concepts like levers and pulleys are important in the type of work we do. In basic sciencebasic math [potential hires] come up short. The decline in STEM literacy exists on two levels, K-12 education and college.

    Statistical realities, combined with a lack of practical experience translate to a low degree of employer confidence regarding students level of preparation at the secondary school level. Of the survey respondents, 42 percent believe recent graduates are not adequately prepared for available jobs without additional training.26 More than a quarter of the executives indicate that they do not believe that educational institutions understand the immediate needs of energy employers.

    In sum, demographic shifts, the rise of technology innovation and a breakdown in STEM education at all instructional levels have driven a serious talent shortage in the energy industry for entry-level and senior-level positions.

    Screening tests are a stumbling block for many If the double squeeze wasnt challenge enough, energy executives now face a relatively new HR challenge: screenings. A significant majority of interviewed executives and other workforce stakeholders express concern about the inability of candidates to pass required drug tests, driving record checks and background checks. By one survey responders estimation, only 50 percent of the applicants for entry-level jobs at his job-training agency are considered qualified candidates due to their inability to pass background-oriented screening tests.

    Fifty years ago, industry drug screens were rare for employment, explains Randy Pacheco, dean, San Juan College School of Energy. Fifty years ago, companies didnt require that you have a good driving record. Today, thats all changed, and people are subject to these rules. It is mandatory. Its absolutely no DUIs. And these are some of the issues we face, trying to find our next workforce.

    The Energy Workforce Crisis

    42% of executives say recent graduates are not adequately prepared. Manpower Energy Workforce Survey

    66% of U .S . 8th graders are not proficeint

    in math19

    28% of U .S . 8th graders

    failed to score the basic level

    of competency19

    40% of U .S . 12th graders

    did not meet the basic standards of scienc knowledge20

    In Canada, less than

    50% of high school

    students graduate with senior

    STEM courses21

    Breakdown in STEM Preparation

  • 17Strategies to Fuel the Energy Workforce

    The energy industry is not alone in this quest. In a 2013 Pennsylvania Chamber of Commerce Workforce Study, 32 percent of their members surveyed said background checks and criminal records were an issue in hiring.27 This is one reason drivers rank eighth among the global top 10 jobs employers are having difficulty filling in ManpowerGroups 2013 Talent Shortage Survey, and why that particular job role appears on the list year after year.

    ConclusionThe shortage of skilled workers is a serious reality for the energy industry. The shortage is large, and it is also urgent, fueled by the double squeeze of unfilled openings at both the entry and senior levels. Specialized skill sets are increasingly defining job roles, and a breakdown in the STEM education system is widening the gap. Society must recognize that todays underperforming ninth graders in math and science are the entry-level front-line energy workforce of 2017-2019.

    Companies and other stakeholders have to be proactive in the development of short- and long-term solutions. Workforce agility is the appropriate response to rapidly changing technology now and in the future and key to maximizing return on workforce investment (ROWI). Employers cant inherently predict the dynamics that shape uncertainty (e.g., market volatility, compressed economic cycles, greater pressure for faster time-to-value, etc.), yet they can plan for workforce flexibility and agility. This requires simplification a streamlined organizational structure designed to boost empowerment, employee engagement and productivity.

    The energy industry has high growth potential as evidenced by the massive investments being made in new technologies. The key now is to prepare a workforce that is able to maximize that potential. If we fail to do so, the lost opportunity will be high.

    Huge Gaps in Higher STEM Education

    STEM bachelors degrees have been declining since 1985.22Women are less likely to pursue degrees in STEM than men.23

    Black and Latino students are less likely to pursue STEM degrees than white students.24

    Only 14% of engineers are women.25 U.S. Congress Joint Economic Committee, STEM Education: Preparing for the Jobs of the Future

  • Whats Working in Energy Workforce Development

    Despite numerous challenges facing the energy industrys efforts to develop the workforce it needs, some employers are creating innovative programs to realize their growth potential . Report Two describes whos doing this well and the strategies theyre employing .

    Report Two:

  • 19Strategies to Fuel the Energy Workforce

    The energy industry faces a skilled workforce shortage that is vast and urgent. While other industries such as manufacturing also face this problem, the talent shortage in energy is particularly acute. The combination of incumbent employees aging out and an entry-level workforce deficient in STEM education is resulting in a double squeeze. A breakdown of the educational system leaves a shortage of tech-savvy front-line workers, skilled tradespeople and professional engineers. In addition, there is keen competition for workers from industries with heavily promoted and glamorized corporate cultures. The result is the energy industry is being forced to play catch-up for the thousands of skilled workers it needs to fully realize the potential from billions of dollars in technology and capital investments.

    The industry also risks leaving billions of dollars in future global energy exports untapped. The United States and Canada are poised to benefit as the worlds leading exporters of energy to countries such as China and India, where demand is forecast to grow significantly during the next decade. But any energy companys ability to compete effectively and realize economic growth relies on a skilled workforce. ManpowerGroup defines this trend as the Human Age the era in which talent is the driver of growth and the most important competitive differentiator.

    The talent shortage is affecting large multi-national corporations as well as smaller operators. To date, talent strategies in the energy industry have been largely non-existent. Many initiatives are reactive instead of proactive, resulting in fragmented and uncoordinated workforce efforts. The reality is that the problem has become too big for any one group of stakeholders to solve alone. While there are issues that companies, educators and governments need to address independently, collaboration is the only viable long-term solution to address the systemic nature of these issues.

    Innovative strategies in energy workforce developmentInterviews with company executives, educators and workforce development advocates indicate effective strategies can be divided into four areas:

    1 . Build the talent supply.

    2 . Find new access to talent supply.

    3 . Mitigate the demand for new talent.

    4 . Develop future workforce capabilities.

    Develop Future

    Workforce Capabilities

    Build the talent supply

    Find new access to talent supply

    Mitigate the demand for new talent

  • 20

    Strategy #1: Build the talent supplySome of the most promising work to date in building the supply of talent is around the idea of a common educational core. These include portable, stackable credentials that respond to changing employer needs and maximize the agility of graduates. Making it easier for workers to build and port their credentials creates a more structured and practical career development path and attracts more workers. Employee engagement studies highlight the importance of career paths and career development as a key aspect of employee engagement.28

    One approach to developing a common technical core is to identify a few courses that are widely applicable and create a certificate program. A student can then move from one specialty or institution to another as demand necessitates. For example, the Center for Energy Workforce Development (CEWD) model calls for creating industry-wide credentials that allow students to demonstrate the skill level attained and build from the bottom of the pyramid upward from

    Basic Training credentials, to Industry Fundamentals, to Job-Specific Skills.29 The approach emphasizes standardization and helps overcome the challenge of portability discussed earlier.

    Employer involvement plays a key role in determining the common core and levels of standardization. Employers have the most current information about workforce skill needs and are best suited to realistically anticipate future requirements.

    Employers also play a role in building the talent supply by supporting STEM education at the K-12 level through corporate foundations and volunteer outreach programs. This can be done collectively with other STEM- related fields or through energy-industry collaboration.

    Whats Working in Energy Workforce Development

    We have to build a workforce that has a solid foundation, and then has the ability to adapt as quickly as technology in the industry is changing . The idea of snap-on credentialsyou can snap-on something in the last few semesters of a program of study that is very specific and matches companies needs immediately addresses needs that you cant anticipate in five years, but you can anticipate in one year .

    Ann Randazzo, Executive Director, Center for Energy Workforce Development

    Center for Energy Workforce Development

  • 21Strategies to Fuel the Energy Workforce

    Some companies establish individual efforts to create competitive advantage. As interviewee Lydia Evanson, president of LME Consulting shares: One of the things weve done is partner with the elementary schools to do field trips and take kids out to the [solar] plants. Give them hard hats and all thatlet them see what math and science really dowhat math and science create. In a classroom they dont feel it. You should see it when the kids are out there. Even in 4th and 5th grades, they ask great questions.

    In addition to cultivating excitement about STEM professions, local partnerships with elementary, middle and high schools can also have a positive impact on a companys community relations efforts.

    Another promising strategy is the development and implementation by educational institutions of branded, earned-revenue programs for incumbent worker training. Some institutions develop programs in subsectors like hydraulic fracturing and customize them with a corporate partner by including proprietary technologies. Then they brand them with the company name. Effectively outsourcing these programs to educational institutions, companies pay the colleges to put on the programs and bring people through them. This approach saves companies both time and money. For Canadian public institutions, operational collaborations are more difficult to navigate. They prefer capital-driven partnerships that fund learning environments (e.g., Suncor Lab, Calfrac Fracking Lab, Cenovus Center).

    Strategy #2: Find new access to talent supply Employers are making headway in increasing access to talent supplies by creating innovative outreach programs and making it a strategic priority in the executive suite. Educators and workforce development advocates are creating programs and partnerships that fundamentally change the way students are educated for energy jobs.

    One promising strategy is the alignment of armed forces job titles and energy job titles that translate veterans training and skill sets into the equivalent job requirements and ultimately college credit. This approach overcomes semantic barriers that exacerbate a perceived skills mismatch. Ann Randazzo, executive director, Center for Energy Workforce Development explains, Even though [veterans] have skills, it is very difficult for both veterans and employers to understand how those skills apply to civilian jobs. For the most part, these MOS [military occupation specialty code] translators that are at the national level, crosswalk military codes based on O*Net which has very few jobs defined for utilities. Most utility technician positions are combined into a job group called Maintenance and Repair. That title doesnt relate to job titles that a vet would see in an open job posting, so it is really hard for a veteran who may have exactly the skills we need. They have had the training that we need; it is just called something else So, weve spent much of the last two years getting into that translation.

    56% of companies are investing more in skills development and training than they were five years ago

    Manpower Energy Workforce Survey

  • 22

    In addition to programs created by educators, energy companies themselves have developed a number of initiatives to increase access to the supply of talent including internships, externships, employer branding and corporate culture programs. Some employers are recruiting from high schools, creating outreach programs to veterans, women and underrepresented populations.

    Executive interviews reveal that many companies pared back internship programs during the recession. As described by Paul Sanchez, HR manager, PNM Resources: Our formal internship program sunset in 2007 due in part to the economic downturn when many programs were realigned, changed, or even eliminated. The formal program instead was replaced with more targeted efforts, including an engineering internship program to attract Native American students to jobs at our power plants.

    One of the employer benefits of internships is pragmatic learning. According to one of the executives interviewed for this report, I think the biggest thing that we probably have not

    Whats Working in Energy Workforce Development

    Case Study: San Juan College School of EnergyProblem

    Companies need more skilled workers, yet training programs can be expensive for companies to implement. On the other hand, community colleges are facing declines in state-funding, intensifying competition for students and new revenue streams to ensure the schools sustainability.

    Solution

    Over the years, PNM Resources, the New Mexico-based energy holding company, built a strong relationship with San Juan College. Today the educational institution effectively manages the companys apprenticeship program. The PNM Industrial Apprenticeship Training Program is open only to PNM employees and offers three different tracks: Generation Plant Operator, Environmental Process Operator and Industrial Mechanic. It provides the student/apprentice the skills to advance to a journeyman position.

    The program, designed specifically for PNMs San Juan Generating Station, combines cooperative education and general education. Each apprentice must complete 2,000 hours of on-the-job training and a minimum of 144 hours of classroom training. To ensure continued relevancy, San Juan College teaches courses on-site at PNM and uses former PNM employees as instructors. The program ensures that trainees have the kind of practical experience and tailored training that makes graduates easily on-boardable for their new positions.

    Results

    PNM has created a productive pipeline of loyal workers. The apprenticeship program reaches about 20-35 people per year, and 80% of program entrants graduate. Our apprenticeship program is turning out well-prepared candidates for our job openings, explains Paul Sanchez, HR manager, PNM Resources, We have different apprenticeship calendars at San Juan, one is a four-year program, and the other is a five-year program. After the four or five years, a high percent of the employees remain with the company.

  • 23Strategies to Fuel the Energy Workforce

    done enough of both in secondary school and in college are internships. Or job shadowing, so that students get relevancy along with their technical studies so they can go out and see the real world and solve real problems and face real decisions.

    Internships are important at both the high school and college level because they occur during the years when students first begin to think about a career path. They also provide exposure to jobs and lifestyle considerations that will set realistic expectations and reduce turnover. Some employers take the concept a step further and create externships (i.e., summer programs for college instructors) that help bring real world experience and practical examples into classrooms).

    While some companies did away with internship programs during the recession, interviews with energy executives suggest that those who kept their internship programs in place are more likely to report satisfaction with current candidate quality and availability than those who did not.

    Another way employers proactively increase access to the supply of skilled talent is through employer branding and corporate culture programs. Energy companies recognize that they are competing for skilled professional workers and engineers with companies such as Google and Apple. As a result, some make an effort to align their corporate culture with the interests of younger workers and proactively market that culture to new hires.

    Although it is widely recognized that energy companies are not about wearing shorts and riding a scooter around, as one interview subject put it, adjustments that appeal to the core values of the younger generation can be made.

    Interviews with executives reveal widespread interest in recruiting from targeted talent pools. For entry-level workers, companies even describe efforts to recruit high school students prior to graduation, particularly in Canada.

    Increasing access to women, underrepresented populations and veterans are also high priorities for companies.

    Among energy executives, over half agree that their company works diligently to recruit women into hard-to-fill positions. Women and minorities are generally under-represented in STEM-related professions and executive interviews reveal that outreach to women consists of informal support and internal networking groups. Typically the impact of these programs is not tracked and success metrics are not applied. In fact, outreach to minority groups often is not formalized at all.

    In todays marketplace, to be able to successfully compete for quality talent graduating from our colleges, we have to come in [to job fairs] and make our booths and handouts look just as good as the competitions. Its all about getting a students attention and convincing him or her that you are an employer it would be cool and rewarding to work for. Were not Apple. Were never going to be Zappos, but we still have to recruit from the same population of students.

    Dean Woods, Senior Vice President and Chief Human Resources Officer, CenterPoint Energy

  • 24

    Whats Working in Energy Workforce Development

    Case Study: CenterPoint Energy Problem

    Many energy industry companies grapple with the missing middle managers syndrome an entire missing generation of workers. CenterPoint Energy was no different. A clash in leadership and management styles became evident when managers from the Baby Boomer generation began overseeing Gen X and Y employees. The company experienced higher than desired turnover rates for new hires at the 3-month, 6-month and one-year intervals.

    Solution

    Recognizing the undesirable costs of high turnover, CenterPoint Energy focused on creating a positive onboarding process, as well as its generational training curriculum. A two-year mandatory curriculum for new leaders or new employees focuses on helping managers understand the multigenerational issues of the changing workforce.

    CenterPoint started a program called Energized by You (EBY), a company-wide program that allows the company to convert its rewards and recognition efforts into a strategic advantage. The program combines the use of monetary and non-monetary rewards as recognition and acknowledgement of good performance. The robust system provides management the ability to closely monitor the use of all reward mechanisms. This allows the company to ensure that employees across the company are treated consistently, and that the funds expended in the program are being used to obtain maximum benefit.

    Our goal is to ensure our managers fully understand that it is their job not just to direct their employees to accomplish the work theyre trained to do, but also to develop them, and to provide them with a healthy and positive work environment. This is not only the right thing to do, but its the smart way to run the people side of the business. Doing so allows us to have a committed workforce that wants to stay with us for their whole career, explains Dean Woods, Senior Vice President and Chief Human Resources Officer, CenterPoint Energy. Weve been actively pursuing this philosophy for eight years now and its paying off in terms of very reasonable voluntary turnover and a good reputation in the marketplace as a great place to work.

    Results

    For the last 10 years, CenterPoint Energy has commissioned an employee engagement survey, performed every two or three years, to gauge employee satisfaction with their work experience, and to identify and track problems before they result in workforce turnover. The most recent survey yielded very positive results. The majority of employees (86%) believe workers are treated with respect at the company and have the equipment, tools and resources they need to do their job effectively. Almost 90% would recommend CenterPoint Energy as a good place to work. A very large percentage of employees indicated they plan to spend their entire career with the company and ultimately retire from CenterPoint Energy. CenterPoints survey results were compared against a set of peer utilities, as well as against a set of high performing employers. The company ranked in the top 10% of utilities, and did well enough to be included as one of the high performing companies in the survey providers data base.

  • 25Strategies to Fuel the Energy Workforce

    Due to a naturally aligning skill set, military veterans represent a promising new pool of recruitment candidates for energy jobs. Strong leadership and problem solving skills make veterans attractive candidates. Vets are one of our target audiences whenever we have a job to post, explains Paul Sanchez, HR manager with PNM Resources. We use Hero 2 Hired, attend vets jobs fairs, and use an outside search firm that helps place vets into jobs.

    Strategy #3: Mitigate the demand for new talentOne way to decrease the need for new hires is to better support and develop the talent you have already. Many employers are leading the way in programs designed to reduce attrition and recast jobs to make them more attractive. Innovative practices include knowledge transfer and succession strategies, incumbent worker training and development, and retention strategies, such as reward and loyalty programs and flexible work environments.

    Interviews with executives show the companies best positioned to weather the aging-out of retiring employees formalized their knowledge transfer programs and integrated them into organization-wide systems. Companies that have had programs in place for the past several years have not encountered the loss of institutional knowledge and productivity they anticipated.

    Knowledge transfer programs range from assigned mentorships between entry- and senior-level employees to archiving video interviews with long-tenured employees. The oral history approach features case studies of past problems solved. Printed transcripts are also transcribed and accessible to younger employees.

    Incumbent worker training, especially in the professional development and leadership areas, is another strategy businesses use to compensate for a lack of middle managers created by hiring declines in the 1980s and the recent recession. For example, some companies create their own management training programs for supervising Gen X and Y employees. Participation in these trainings is mandatory, and managers cultivate a better understanding of the workforce needs and motivations of younger workers.

    Other companies make leadership a core value of their corporate culture. In these cases, the integration of leadership, management and supervisory skills begins early in an employees tenure at the company and remains constant over time. This approach is largely dependent on a companys long-term view of its business goals, workforce and HR practices.

    The interviews also reveal the importance of career development as a differentiator for companies in the energy talent market place. Executives at large multi-national corporations partially attribute hiring success with new engineers to a long-term, structured view on career development. Small to mid-size energy companies are also able to brand themselves as career developers by providing hands-on opportunities for involvement in meaningful projects in the context of a career path. Executives are increasingly seeing the need to be skilled in having these career conversations early in order to hire and retain the best.

  • 26

    Employee loyalty and retention programs are largely underutilized relative to their potential impact. Executives often equate loyalty and retention programs solely with financial incentives rather than exploring other types of incentives that may be of greater appeal to younger workers. The use of retention bonuses, for example, appears to be highly selective and typically a reactive solution for a specific project or highly sought after employee.

    Lastly, to stem the tide of retiring workers, some companies are offering their retirement-age executives options for flextime, part-time or work-from-home arrangements. These strategies have the advantage of a more gradual transition period with more opportunities for knowledge transfer as well as access to experienced counsel. Some companies also recognize that flex-time or work-from-home arrangements are attractive options for a new generation of workers that place a high priority on work/life balance. While not applicable for all front-line positions, data analysis and management jobs may include more flexible work arrangements.

    Strategy #4: Develop future workforce capabilitiesAs certain uncertainty shapes workforce dynamics in the energy industry, rapidly changing technologies often prevent employers from being able to adequately or specifically define needed skill sets for employees in the future.

    Many of the strategies featured thus far have been the work of innovative employers and educators. While there are issues that companies, educators and government need to address individually, the magnitude and urgency of the talent shortage in the energy industry makes collaboration more than attractive. It is essential.

    Laura Fisher, senior vice president, Allegheny Conference, describes this moment of opportunity: I think were a little more poised to try some things here because companies are looking at our demographics and aging workforce, and recognizing that the state and federal government dont have immediate solutions. Thats really where the Energy

    Alliance of Greater Pittsburgh has been very helpful, creating a framework for bringing industry together, some of whom are competitors, around an issue where they all agree.

    Survey results also show executives are divided over whether educational institutions understand the needs of industry employers. Executive interviewees corroborated this finding. Weve been hiring people out of college and training them, explains Dan Boudway, director of Field Services, TRC Solutions, they dont come out of school 100 percent ready to do what we do because what we do is not part of the curriculum. Yet, employers working directly with colleges voice this opinion less frequently than those not working with academic institutions.

    Whats Working in Energy Workforce Development

    93% percent of energy executives agree that partnerships with academic institutions will be important to their ability to develop the workforce needed in the next decade. Manpower Energy Workforce Survey

  • 27Strategies to Fuel the Energy Workforce

    Another promising strategy that Canadian educators are employing to increase the talent supply is developing targeted, culturally competent oil and gas land administration training programs for Aboriginal and First Nations populations. Bringing training directly into the community, institutions like SAIT Polytechnic close the skills gap and enable a workforce in rural communities. These programs also assist employers in meeting the countrys Canadians First hiring mandate.

    The research reveals that the key to closing the gap is creating solutions that increase communications between community colleges, universities and companies. Established and agile cross-sector collaborations anticipate and build capacities for the future.

    Cross-sector collaborations are happening at a variety of levels: statewide consortia working within state-driven education, tuition reimbursement and incentives systems; regional

    Case Study: ShaleNETProblem

    The Marcellus shale play spans four states: Pennsylvania, West Virginia, Ohio and New York. In 2010, the U.S. Department of Labor, Employment and Training Administration funded a $5 million community-job-based training grant program to ready entry-level workers for natural gas jobs.

    However, state-driven workforce development plans were fragmented and lacked unity. Just within Pennsylvania, our Department of Labor and Industry wanted to do something in the eastern part of the state and something different in the west, describes Laura Fisher, senior vice president, at the Allegheny Conference on Community Development. Industry was telling us they were having extremely highturnover on some of these rigs ... because people didnt know anything about the industry but heard how good the money was.

    Solution

    The funds from the Department of Labor provided an incentive and framework for ShaleNET, a multi-state collaboration by industry, educators and the public workforce system. With partners that included the Pennsylvania College of Technology, Pennsylvania Independent Oil and Gas Association, the Westmoreland County Community College, and 15 workforce investment One Stops, ShaleNET created an industry-driven curriculum that was subsequently offered at community colleges in all four states.

    Results

    Between July 2010 and June 2013, over 5,000 people completed ShaleNET training and nearly 3,500 became employed in Marcellus Shale and other related jobs with an 80% retention rate. Starting salaries ranged from $60,000-$70,000 per year. In 2013, ShaleNET received an additional $14.9 million grant to expand the scope and scale of the program to allow interested individuals to continue their training and earn two-year degrees focused on job placement in midstream and downstream jobs.

  • 28

    consortia that transcend provincial or state lines to encourage skill building, mobility and portability; and national consortia through trade organizations (e.g., the Canadian Association of Petroleum Engineers or CEWD).

    Stakeholder interviews suggest several issues are particularly well suited for cross-sector collaboration. First is the establishment of energy technology centers and hands-on training facilities for learning. Second is the creation of standards, certifications and accreditations that establish the minimum knowledge and skills of recent graduates. Third is the establishment of community college curricula for up-skilling incumbent workers in rapidly changing technologies and ongoing professional development.

    In several locations, companies are partnering to create energy technology centers. These free-standing centers in visible areas showcase the latest technologies, provide laboratory environments for student learning and enable good public relations opportunities for the industry.

    In an environment where technology advances and worker needs are difficult to project, cross-sector collaborations in credentialing and curricula provide a platform for agile responses to a dynamic industry. The benefits of these collaborations include the ability to spread costs and risks across multiple companies, provide opportunities to test theories of change and learn from best practices. Small- to medium-sized companies with limited resources can especially benefit from the shared risks and resources that come with collaboration. To be effective, however, cross-sector collaborations rely on on-going communication and trust among business, academic and government cultures. Having these factors in place makes consortia more agile, responsive and focused on future outcomes.

    Whats Working in Energy Workforce Development

  • 29Strategies to Fuel the Energy Workforce

    ConclusionCompanies are ramping up workforce training and development programs to protect their investments in technologies, capital and reserves, and ready the industry to satisfy increased global energy demand. Challenges such as diverse technologies, unique skill sets by subsector, artificial geographic barriers that impact education standards, credentialing and portability, and a college education system that misaligns incentives for educators, students and employers, all make maximizing return on workforce investment (ROWI) even more difficult.

    Today, as companies and educators in North America struggle with how to adapt, a few innovators are employing strategies that build the supply of agile talent, increase access to it, mitigate the demand for new talent and enable capabilities for the future. This framework provides a blueprint for the entire industry. The reality is that the talent shortage problem has become too big for any one group to solve alone. Some of the most promising approaches involve cross-sector collaborations where companies, educators and government come together to develop dynamic solutions to employer needs.

    The stakes are enormous. Without investing in talent, billions of dollars in energy company investments will go to waste, and untapped market opportunity and economic vibrancy will be forfeited. For the energy industry, talent is the new driver of growth.

  • Rebranding Energy Jobs

    In competing for specialized talent, the energy industry lacks the cool factor that technology employers enjoy . In addition, despite the availability of good jobs at nearly all levels, there is an overall lack of awareness of available opportunities and misconceptions about what it means to work in energy . As a result, the industry finds itself in need of rebranding in order to attract the talent it needs .

    Report Three:

  • 31Strategies to Fuel the Energy Workforce

    The talent shortage in the energy industry is attributable to a mismatch of the supply and demand for a new type of energy workforce. It is exacerbated by underlying causes: a lack of awareness about job roles, wages and availability, and negative perceptions about the industry. A key strategy for improving access to an increased supply of talent is rebranding energy jobs.

    Some career counselors, educators and parents are unaware of the potential growth of the energy industry and the presence of high-paying jobs. The default is to steer students into IT or healthcare where rising demand has been forecasted for decades. However, rapid changes in technology associated with oil and gas exploration, hydraulic fracturing, smart grids and renewable sources like wind and solar are generating many more energy job opportunities. Add in the retirement of older workers, and hundreds of thousands of energy job openings are forecast over the next decade.30

    The lure of cool campus cultures and amenities such as those found at Google, Apple and Zappos are irresistible to a new generation of graduates who value work-life balance. Unfortunately,

    those same students may have negative perceptions of the energy industry or the jobs in the sector. Although these perceptions frequently are based on misinformation, it places the energy industry in a difficult position when it comes to recruiting the next generation of skilled workers. Today, an energy companys ability to compete and realize economic growth relies on a skilled workforce with the critical thinking skills to adapt to certain uncertainty. ManpowerGroup describes this trend as the Human Age; the era in which talent is the new driver of growth, and the primary differentiator of competitive advantage.

    A review of the larger landscape reveals that vocational education paths are often stigmatized as lesser options for students than attending four-year colleges and universities. This comes at a time when students are challenged to get into or even afford college. On top of that, its not only harder to get a degree in four years, but also graduate without accruing crushing student loan debt. Without a degree and/or without jobs, their debt burden is often overwhelming. On the demand side of the equation, energy employers continually struggle with filling positions in the skilled trades. As a result, a macro-strategy is needed to help companies, as well as students, maximize their return on investment.

    [Young people] dont really understand what the energy industry does . They dont understand all the types of jobs that are in those industriesand the opportunities .

    Lydia Evanson, President, LME Consulting

    Find Balance

    Employer Demand

    Workforce Supply

  • 32

    Negative perceptions exacerbate the talent shortage .One-on-one interviews with business executives, educators and workforce advocates make one thing clear: the energy industry comes with a lot of negative perceptual baggage. Generally, there is a lack of awareness about what todays energy jobs look like. Careers in the industry are often a hard sell to students whose opinions are informed primarily by negative media stories.

    That sentiment is echoed by Peggy Montana, executive vice president of Supply and Distribution, Shell Downstream, who says, After all, the energy industry is an extremely sophisticated, high-tech industry that makes a difference in peoples lives, although it is not often perceived this way. Students need to know this. If I were a marketer, Id like to rebrand energy.31

    Interviews with executives and educators suggest that the energy industry suffers from three common misperceptions. First, that it is not a good social or community partner. Second, it is environmentally insensitive. And third, it is composed of dirty, low-paying and disrespected jobs.

    Perceptions vary even more by energy subsector (e.g., coal, oil and gas, electricity, nuclear, wind and solar). Coal mining and hydraulic fracturing are widely perceived as environmental hazards. Oil and gas are seen largely as whipping posts a metaphor for the public flogging that the industry has taken in the media relative to hydraulic fracturing of oil and gas or fracking as it is often referred. Solar and renewables, on the other hand, are considered to have potential positives for building the industrys reputation. Yet skepticism remains about the viability of renewables as a growth sector without ongoing government subsidies.

    These findings are consistent with other studies on the topic. A National Academy of Sciences Report In Brief documents a negative public perception of U.S. extractive industries due to concerns over pollution, noise, environmental degradation and health issues [that] dissuades some from pursuing careers. With respect to renewables, the report finds issues such as questionable technology and market viability may be a deterrent.32

    Negative public perceptions of the energy industry are likely linked to media coverage: environmental disasters and emergencies such as the Milford, Texas, gas pipeline explosion in 2013 and the Deepwater Horizon Gulf of Mexico oil spill in 2010. Media-generated information and images contribute significantly to the perceptions of tomorrows potential energy workforce.

    Rebranding Energy Jobs

    Negative Perceptions

    Energy Growth

  • 33Strategies to Fuel the Energy Workforce

    With three million available energy jobs projected by 2020, students, parents and career counselors need a more complete picture of the industry and the opportunities it presents.

    The prevalence of the perception problem is underscored by a recent survey of Allegheny College faculty and students who sit on the cusp of the Marcellus shale play. In a community poised to economically benefit from hydraulic fracturing, the study found that opinions were generally against hydraulic fracturing. Respondents also feared the Colleges intent to pursue fracturing on Alleghenys Bousson Experimental Forest would damage the schools reputation.33

    The stigmatization of vocational training Interviews with energy executives and educators articulate widespread concern about the undervalued role of technical education, known to many by the outdated term vo-tech. Laura Fisher, senior vice president, Allegheny Conference explains, Our state investments and this is true in many states have not kept pace with the reality of constant innovation and the high skill levels required by technical occupations. We need to invest in, promote and properly value career and technical educationand allow it to become a pathway that people generally acknowledge as one with many educational outcomes, including two and four year degrees. According to a 2012 study of employers, students and educators by McKinsey & Co., academic pathways are valued more by society than vocational ones.

    Research points to this problem as a global dilemma one that Finland has taken the lead in overcoming. The country has shaken off the image that vocational training is for those who cannot qualify for a four-year university. Finland positions four-year universities as options for ongoing education after trade education, not an either-or choice. In fact, at age 16, 95 percent of students go to either a vocational school for specialized training or an academic high school.34 The country has also leveled the playing field by providing equal financial incentives for attending vocational schools as for attending universities. Now, more than 50 percent of students in Finland attend vocational schools.35

    Several interviewees point to Germany as a model for integrating high-quality, hands-on vocational education into the system starting as early as secondary school. Japan is another model for study. Manpowers 2013 Talent Shortage Survey highlighted Kosen colleges 57 state-run technology schools where Japanese students as young as 15 years engage in applied learning and specialize in skilled trades.

    Over the years, vocational training has been re-conceptualized as Career Technical Education (CTE) by heads of secondary, postsecondary and adult career colleges. This evolution is not

    There needs to be a collective shift in how society views Career Technical Education . We have to acknowledge that the university experience is not for everyone, and we have made the mistake of steering too many students in that direction in the past . We need to bring honor back to the skilled trades .

    Jorge Perez, Senior Vice President, Manpower North America

  • 34

    known or understood by the public. At the foundational level, the industry would benefit from a collaborative effort to promote STEM education in K-12 education and expose students earlier to the energy industry. This needs to be coupled with equal efforts to frame and promote benefits of vocational training: less time invested, less debt accrued and the presence of good-paying jobs/careers that can support individual growth, families and communities.

    While it is true that recruiting more people into the STEM pipeline is important, the energy industry also needs to compete more effectively with information technology and health care for the highest performing candidates. To this end, companies should place more emphasis on creativity, innovation and the R&D aspects of the industry. Changing the conversation about energy jobs is not just about educating the public about why their perceptions are wrong. It is about engaging them around the topic in a whole new way, then using the data to dispel negative stereotypes and myths.

    Its not your grandfathers energy industryAmong energy company executives, 54 percent report their companies work hard to recruit women. Among those interviewed, there is consensus that while male-dominated energy companies have historically been the norm, significant inroads are being made by women in all levels and that companies are dedicated to greater diversity.

    According to Dean Randy Pacheco of San Juan College School of Energy, There is this view out there that women cannot work in the energy industry. [They think] my boyfriend or my dad or my grandfather works/worked for an energy company but the energy company wont hire me because Im a woman. I really

    need women to understand this is not true. I think we are breaking down those barriers for women. Energy companies are looking for men and women. They are looking for hard-working responsible individuals.

    The competition that energy companies face in recruiting women is exacerbated by fewer women in the talent pipeline. It is well documented that women are less likely to pursue careers in science, technology and math (STEM) occupations than their male counterparts.36 One factor

    in this decision is the lack of women as occupational role models. Recent media coverage has exposed the l ack of women in information technology companies from programmers to management to the boardroom. By featuring women in the workforce, energy companies can differentiate and leverage that as a competitive advantage.

    Rebranding Energy Jobs

    54% of leaders say their companies work to recruit women. Manpower Energy Workforce Survey

    A Competitive Advantage

    Women Role Models

    More Women in the Talent Pipeline

    =

  • 35Strategies to Fuel the Energy Workforce

    The competition is fierce Energy companies are vying for promising tech-savvy talent with well-heeled, high-tech firms that have the cool factor to their advantage. Competition for skilled employees with companies such as Google and Apple is top-of-mind for energy executives.

    According to surveyed energy executives, work-life balance is a close second to salary on a list of other factors young people value most often when evaluating job opportunities. Interviews with executives articulate the need to look to innovative practices such as flex-time, working from home and job sharing to attract the new generation of workers and compete more effectively with the IT companies that have implemented such practices f or years.

    The technology used on a daily basis is an integral part of the lives of the coming generation of workers. The energy industry needs to make an emotional and cultural connection that goes beyond repairing negative perceptions about safety, corporate citizenship and working conditions. Making energy jobs cool and personally relevant will be a critical component of engaging the best and the brightest talent from the available pool.

    Changing the conversationCompany executives and educators point to research that demonstrates the importance of the industry to future domestic economic success, global security and energy equity for the developing world. Executives are endeavoring to provide accurate risk assessments for industry practices, forecasted job opportunities, average pay scales and transparent discussion about potential environmental impacts and safety implications. Yet, negative perceptions of the industry are often based on low probability but highly visible incidents that make headlines and generate extensive media coverage without full dialogue about complex perspectives.

    Solid paying jobs

    Reliable,safe,

    sustainable

    Accelerateglobal supply

    Make adifference

    Wage growth

    Socialissues

  • 36

    Many students, parents and career counselors also do not realize that the energy industry is a source of good-paying jobs. Historical images of dirty coal miners and oil fields support these perceptions. In 2012, however, the energy industry led the U.S. in wage growth; two of the five best industries for wage growth were mining, oil and gas exploration (5.8 percent) and utilities (4.1 percent).37 The situation is similar in Canada where The Conference Board of Canada projects the energy industry to have the highest wage growth (4.3 percent) of any sector.38

    Currently, workforce recruiters for the energy industry start the conversation in a deficit position. Executives need the skills to engage their stakeholders in open, transparent and engaging dialogue to win over supporters. The industry must rebrand itself in a way that is compelling to young people, college students, parents, educators and career counselors. In a 24/7 media environment fueled by sensationalism and controversy, the industry needs to seed compelling and positive messages that can begin to counter negative perceptions and reframe energy careers. Research suggests that the generation of workers entering the workforce care about making a difference on social issues. The energy sector provides a vast and complex playing field for addressing our accelerating global need for energy supply in ways that are reliable, safe, sustainable and equitable.

    Young image-driven audiences of today need familiar role models and interactive scenarios to embrace and make energy part of their generations and their individual identities. Cultivating peer examples and depicting women and minorities as skilled technology workers within the industry can be a powerful rebranding tool. Gamification, simulation and other technological tools can engage younger generations and transform perceptions of energy jobs to a higher level.39

    Rebranding Energy Jobs

  • 37Strategies to Fuel the Energy Workforce

    ConclusionCompanies and other stakeholders must be proactive with short- and long-term communications efforts that rebrand the energy industry, de-stigmatize vocational training and persuade students, parents, career counselors and others that the best and brightest work in energy. The energy industry is a source of stimulating, high-paying, socially responsible jobs where diversity and work/life balance are valued.

    Rebranding energy is another example of a talent strategy that has become too big for any one group to implement alone. Cross-sector collaboration between companies and educators will make rebranding efforts more effective and efficient. Leveraging communications also has the power to yield a greater return on workforce investment for individual companies.

    For the energy industry, talent is the new driver of growth. Making energy jobs more attractive will ensure that the billions of dollars companies have invested in technologies, capital and reserves are optimized. U.S. and Canada are poised to be global leaders in energy exports and support a healthy economy in North America. Without talent, however, that economic and social potential will remain unfulfilled.

  • A Call for Collaboration

    The energy industrys talent shortage is driven by a number of factors education, innovation, demographics and no one sector is in a position to solve the problem on its own . The potential of the industry to shape American and Canadian economies for decades to come calls for collaborative efforts among employers, educators, workforce advocates and governments to maximize the return on workforce investment .

    Report Four:

  • 39Strategies to Fuel the Energy Workforce

    The energy industry in the United States and Canada is changing dramatically. It has transformed from an industry in decline to one of growth and opportunity. New technologies, combined with increasing global demand for energy, position the United States and Canada to benefit as two of the worlds leading exporters.40

    However, many energy companies are reporting that a talent shortage of skilled workers is already putting the brakes on growth and expansion. The energy industry needs a new type of technology-savvy workforce to fully realize the value of billions of dollars in current technology and resource investments and keep pace with future developments. The magnitude of the shortage is significant and the need is urgent. By some estimates, there will be 2.5 million energy sector jobs by 2020. It has been estimated that 100,000 of those net new jobs will be in utilities a subsector where 50 percent of the workforce is already over 40 years old.41

    ManpowerGroup recognizes this as representative of the Human Age, in which talent is the new driver of growth and the primary differentiator of competitive advantage.

    Energy companies are feeling the double squeeze for talentTodays energy industry is a dynamic global marketplace that reflects the condition of certain uncertainty, where economic and workforce conditions remain in flux and demand agile action. Certain uncertainty is fueled by rising demand and production, increased competition for reserves, price volatility, mergers and acquisitions, joint ventures, investments in new technologies, cost escalation and control, policy changes and pressures and the ongoing rise in influence of the national oil companies.42 All of these global factors impact the supply and demand for skilled workers in the domestic energy industry.

    One thing that can be said with certainty is that retirement, aging out and a lack of skilled workers at the entry level (i.e., the double squeeze) can prevent companies from being adaptive, limiting their return on investment. Potentially, it can restrain economic growth and leave untapped market opportunity in its wake.

    We have to be creative to attract the technical talent needed to run our business. The pool of

    qualified staff is in high demand, so we have to show them that if they come work for SWN, they will be

    challenged, they will grow as technical experts, and will have the opportunity to work in an environment

    that values culture and the right fit when selecting and retaining employees. We screen for technical

    skill and hire for cultural fit which will help us sustain our unique culture into the future.

    Jenny McCauley, Senior Vice President of Human Resources, Southwestern Energy

    The Double Squeeze

    EnergyOpportunity

    EntryLevel

    Talent

    SeniorLevelTalent

    Technology& Innovation

    Education

    Retirement

  • 40

    The energy industry talent shortage is the issue of greatest concern to executives. Among surveyed employers, the aging workforce is the number one concern, followed by lack of qualified workers, and lack of middle-aged workers. The problem is particularly urgent given anticipated growth in industry jobs by 2020.

    A breakdown in education is feeding the problem. K-12 students consistently underperform in Science, Technology, Engineering and Math (STEM) skills. The workforce pipeline narrows again when high schools turn out candidates without the applied math skills to pass aptitude tests or the skills for new technology-driven energy jobs. Career changers are often at an additional deficit in technology skills, due to generational differences or a transition from jobs that did not require computer use. Finally, the number of engineers who make their way through the pipeline is small compared with the need, and the energy industry is forced to compete for them with information technology companies, many of which are considered todays ideal employers.

    In fact, among the next generation of potential employees at all levels, the energy industry suffers from perceptual challenges about the nature of its jobs and its corporate citizenship.43 Add mandatory drug testing and background checks to the list of challenges for qualified candidates, and the pool for potential employees narrows even further.

    Talent pipeline issues are exacerbated by todays changing technologies. Dynamic technology makes it difficult for educators to anticipate, and employers to forecast, exactly what skills will be needed a few years from now.

    A strategic framework for addressing the talent shortageAnother point of agreement for energy executives is investing more resources in workforce development programs. Interviews with stakeholders (e.g., energy employers, educators and workforce advocates) identified four types of strategies for navigating and overcoming the short- and long-term talent shortage for skilled workers.

    Top Priorities for TodayTo realize the energy industrys growth potential, there are four needle-moving priorities that all sectors should work to advance.

    1 . Give vocational training value . STEM education efforts can have broader implications than just the energy industry. Stakeholders should look to removing the perceived stigma

    A Call for Collaboration

    In the energy industry nationwide, there are 516,000 people in electric, natural gas and nuclear energy . Fifty percent of those are retirement eligible in the next 5-to-10 years and were finding the people coming out of the education system dont have the skills necessary to fill the jobs that will be available .

    Paul Sanchez, HR Manager, PNM Resources

  • 41Strategies to Fuel the Energy Workforce

    of vocational training versus four-year college degrees. A communications campaign to restore pride in the trades supported by employment, and wage data can slowly but surely change perceptions among career counselors, teachers, educators, parents and students and policy makers.

    2 . Market to the future pipeline . A critical component of increasing long-term access to the talent supply is rebranding the energy industry as a great place to work. Energy companies from all subsectors need to come together to make jobs and careers in energy compelling to todays high school and college students, parents, and career counselors, as well as plant the seeds for future generations. Awareness and education are important, but cultural and personal relevancy is critical. A transparent dialogue about sustainability and reliability issues is an important component to shift emotional connections from negative to positive. The rebranding effort also has to meet young people where they live using gamification, social media, interactive technologies and experiences.

    3 . Develop an agile workforce . Two of the most important capabilities for the future are agility and critical thinking. Finding the right balance between a common core and the ability to effectively up skill students for changing technologies is key. Standardization and portable credentials are critical. Although the energy industry is among the most diverse in the technological needs of its subsectors, national standards can be established with local, customized training modules and/or incumbent worker programs to address individual company needs. Ongoing, multi-stakeholder collaborations at the national, regional and local levels are important to establishing agile responses to changing educational needs. Companies should also look to the idea of Teachable Fit to maintain agility. Teachable Fit recognizes the reality that no worker will come prepared with all the skills necessary, but there are aptitudes for learning, agility and critical thinking that can be harnessed.

    Build the talent supply Portable, stackable credentials STEM education Employers and schools aligned for in-demand

    technical education Rebranded energy jobs

    Energy Workforce Strategies

    Find new access to talent supply Student outreach programs Alignment with veteran skill sets Student internships and employee externships Outreach to underrepresented populations Cultural fit with younger generations of talent Rebranded energy jobs

    Mitigate the demand for new talent Knowledge transfer Succession management Career management Retention programs Flexible work models Training and development

    Develop future workforce capabilities Regional and state/province consortia Standard accreditation for core minimum skills Applied STEM education Energy technology centers Vocational school rebranding

    Rebranded energy jobs

  • 42

    Hiring the best skilled, and the most nimble and coachable candidates will be key to a companys agility.44

    4 . Go back to STEM basics . STEM is critical to the foundational skill of critical thinking and applied learning. Investing in national, state-wide and local initiatives to support STEM education is essential not only to the success of the energy industry, but to global competitiveness as well. Interventions need to be made early in K-12 education with curricula that both teaches the skills and engages students in real- world applications of science, technology, engineering and mathematics. Emphasis should also be given to energy industry applications not just information technology and healthcare.

    A Call for Collaboration

    Case Study: Be Bold 2 Problem

    Anticipating talent shortages or surpluses and predicting demand for the right-skilled talent is key to economic growth, business growth and lower unemployment. Typically, however, communications between stakeholder groups is sporadic and limited to the specific occupations needed, rather than a detailed discussion of required and projected skills.

    Solution

    In Wisconsin, ManpowerGroup and Competitive Wisc