The evolution of the Internet, iPhones, and other portable devices has created a marvelous opportunity for companies in the oil and gas sector to train, certify, recertify and otherwise upgrade the skills of their employees so as to train them more efficiently, increase productivity, improve safety, lower costs and increase profits to a significant degree, much more so than ever before and at a lower cost.
Current Challenges to the Petroleum Industry in Regard to Employees
Notwithstanding every effort by the management of large and small corporations to attract and retain good employees, the following challenges currently persist in the energy sector.
- Low cost of oil
- Higher turnover rates that are perhaps not justified.
- Valuable employees leaving for very small pay differential.
- Cost of employee replacement, can be upwards of 20% of the employee’s annual salary
- Employee certification and recertification process posing administrative difficulties higher than desired with associated workplace safety issues and lost days due to injury.
- Concern over compliance that the company may be facing unnecessary risks including environmental risks of spillage, leakage or accidental discharge.
- Recognition of a lack of employee engagement and even disengagement affecting productivity.
- Task performance pressures on managers / supervisors have compromised the time necessary to adequately train and mentor employees.
Defining the Metrics of the Challenges and Opportunities
A recent (2011) survey by Deloitte Canada for the Petroleum Human Resources Council of Canada (40 companies, 32,000 employees) showed the following 5 issues as being of great concern and priority.
- Labour and skills shortages (57%)
- Attraction and retention of workers in hard-to-recruit locations (63%)
- Benefits and compensation expectations (50%)
- Productivity and employee engagement (31%)
- Managing employee turnover/retention (52%)
The majority of survey respondents (84%) were reportedly recruiting for new positions as well as vacant positions due to attrition. At the same time, they are challenged with employees not sufficiently engaged and productive. Not an easy task to say the least!
The Petroleum and Labour Market Report states, “In particular, there is high demand for engineers, technicians, technologists, trades, operators, supervisors, specialists and business and operations support personnel in the petroleum services, exploration and production, and oil sands in-situ sectors. While all levels of experience are required, companies consistently noted increased demand for workers with intermediate- to senior-level experience.” One solution is better training programs.
Let’s assume that a company’s turnover rate is at 25% and the cost of replacing those positions is 20% of the annual salary. Now calculate the effect on this company’s payroll – 25% x 20% equals a whopping 5% additional payroll cost, which translates into millions of dollars. Compare this figure with the company’s pre tax profit and see if this isn’t an area that should be attended to?
Not only is there a problem with the costs of losing people and having to replace them, there may be an even bigger problem with the folks who stay and either fail to engage or totally disengage thus negatively impacting productivity.
The Gallup organization has been measuring employee engagement for a number of years and reporting it under the heading, “State of the American Workforce.” The latest is for 2013. They have time series data going back several years, but in general the patterns are similar and disconcerting.
In general, across a wide range of industries and states, and for both large and small companies the percentage of employees come out as follows:
- Actively engaged and inspired at work 30%
- Disengaged: They’re just kind of present, but not inspired 50%
- Actively disengaged: they roam the halls spreading discontent 20%
On the upside, the Gallup organization found some companies have extraordinarily high ratios of engaged employees versus the ones disengaged. “Organizations with an average of
9.3 engaged employees for every actively disengaged employee in 2010-2011 experienced 147% higher earnings per share (EPS) compared with their competition in 2011-2012. In contrast, those with an average of 2.6 engaged employees for every actively disengaged employee experienced 2% lower EPS compared with their competition during that same time period.”
So for companies who take the time and effort to develop managers and do all the right things to secure employee engagement, the financial rewards to the organization are substantial.
What is an owner, senior executive or senior Human Resources person to do?
Historical Workforce Advancement
From the depression of the 1930’s to the early 1950’s businesses were completely in the drivers’ seat. A vast pool of unemployed or underemployed people were happy to toil at almost anything in exchange for a steady job. Just ask some old timers. In the 1950’s you had to ask your boss if you worked at a bank for permission to get married. You ask around. Anecdotes will not be hard to find.
Then came a loyalty phase. Businesses in the 1950’s voluntarily began to dramatically increase pay and holidays, and hired and promoted managers with good ‘horse sense’. Many families did just fine with one breadwinner raising several children. “Leave it to Beaver” and “Father Knows Best” pretty much covered the typical family unit accurately.
Businesses tolerated the less than perfect employee and the employee tolerated less than perfect companies. Both were loyal to the other. The defined pension benefit plan arrived for union and nonunion employees.
This lasted until the early 1970’s. Next, things got even better for both companies and employees. Many companies developed very sophisticated systems for evaluating employee performance and increased pay significantly, tying it to performance. Many CEO’s had their personnel departments and senior executives develop excellent managerial development programs. Many called their internal training departments ‘Development Institutes’ or other similar names. Some had programs built by outside training development companies and then their own executives delivered the courses.
This phase lasted until the recession of the early 1990’s. Two gyrations occurred over the course of this decade. The oil booms caused employees to quit great jobs in search of greener pastures. The recessions caused the companies to have to cut to the bone, sending away even the loyal, the dedicated and the competent.
The end result was a rendering to pieces of the loyalty equation and to a job market still affected by boom or bust, but wherein the companies, in the name of cost cutting, had eliminated a great deal of their once prided and generally quite successful training and management development programs.
The Additional Strain of the Electronic Age
Added to this cutting down of classroom and other training, additional pressures occurred. Technology arrived which both enabled and disabled great management. Computers and the internet created great opportunities for people to type and send their own words electronically. Companies cut down on the secretaries and support staff that once created the memos and sent them in the mail. The companies had another kick at the can and eliminated the intermediate levels of management and support staff thereby saving even more money. It was deemed that these intermediate levels were no longer necessary as people could get more work done with computers. Lot of the displaced ‘doing work’ went up the chain while the rest went to front line personnel or fell off the table.
Whatever the savings at the time, the net result was that where once many managers might send out and receive less than a handful of correspondence per day they now could send out dozens and sometimes receive over 100 emails in a day. Often it was and is difficult to differentiate the truly important from the merely urgent or unimportant.
With these activities and busy tasks being pressed down upon people, is it any wonder that many in management feel hard pressed in general and short of the time managers may once have had to train, develop, coach and mentor their subordinates effectively?
The Specific Technical Challenges to Training in the Field
Senior executives in the Oil and Gas field, or just generally in the energy sector, have a great responsibility to ensure their people in the field have all the knowledge, tools and skills to meet health, safety and environmental standards and practices. They need to:
- have the proper technical qualification certificates
- know when they must be recertified
- seek a plan to grow their certificate base if it would help improve their productivity and that of the company.
- understand the importance of managing the proper maintenance of their specific equipment so as to ensure its safety and longevity
- ensure that they are driving safely on the roads and highways (many company employees drive thousands of kilometres in a year in challenging conditions like roads covered with black ice, off road driving etc.)
- want to be confident that their employees and contractors are working safely on sites.
The Additional Constraints of Instructor-Led Employee Training
- It is more difficult than it once was to pull people into a classroom to be trained. They don’t have the time and while they are in the classroom who is to do their work? If it is others, there may be a double cost involved.
- The hard costs of travel and possibly lodging are significant and are scrutinized carefully.
- People are more reluctant to be away from home and family than they were some years ago.
- If it is a company expert who knows how to operate the drilling equipment properly, how expensive would it be to have them away from the field?
- How well are they trained to put on a great course?
- Some learners in the class will find the lessons moving too quickly and will not be able to keep up, while others will be bored to death.
- How will you test the learning?
- And how will you know that this learning session has resulted in real changes to behavior by your people in the field?
How Online Training Solves Business Issues
Much of the important part of the answer is online training. You can have a established company create tailor-made courses that are specifically designed for your employees. Typically these finished courses run from 30 minutes to 3 hours. They make use of:
- your existing manuals
- any videos you may already have
- the expert knowledge of your employees
- the experts on safety
- the experts specialized in avoiding spills or environmental risks or who know how to clean up spills
These courses take time and effort to produce, but once developed, can have the following features:
- accessible from laptops, workstations, tablets, or smartphone
- available anywhere, anytime
- resumable from where it last left off
- measurable results through a learning management system (LMS)
- measuring behavioral change after the course
- easily track employee progress on a course by course basis
- recertification reminders
- engaging, easy to use and navigate
The courses can come in a variety of qualities, but the very best have the following attributes:
- Effective graphics
- Professional look and feel
- Engaging, consequence-based activities
- Scenario-based ‘role play’ or ‘real play’
- Effect real changes in behaviour
- Resumable and replayable
You can have these courses developed for you by a quality online training development company, whereby you only need to provide some guidance and direction with regard to your expectations.
Elearning is a highly effective means of ensuring your employees gain the type of training that you feel is important to improve your company’s on the job safety, increase the life of your vehicles and machinery and increase the productivity of your employees and labour force.
By increasing the engagement of your employees, your profitability will improve. Further, if you combine the formidable benefits of elearning with the below mentioned learning delivery mediums, you would have a formidable arsenal of advantages and value for your employees that might tip the scale in many instances and keep your employees from heading off to greener pastures.
- on site training;
- instructor-led training;
- coaching and mentoring;
Even a 1% or 2% reduction in the employee turnover in your company would exceed the cost of your online training courses.
- Can the use of online training improve the results or outcomes of employee performance? Will it result in increased employee engagement?
- Can online training be effectively combined with in-class training, one on one training and mentoring?
- For those companies already using online training effectively, can the bar be raised to even higher standards?
If implemented correctly, the answer to those questions is yes.