A rapidly changing job market will significantly alter the way we operate. Gone are the days where employees with his professional qualification could survive his entire career span with the same set of qualification. Concepts like lifelong learning / reskilling which are more of a theoretical notion today could soon become a reality.
Taking clue from Oil & Gas sector, the recent International Energy Agency’s “World Energy Outlook” report suggested that the advent of electric vehicles and more efficient fuel technologies will have a dramatic impact on transportation fuel demand, predominantly petrol and diesel. It is believed that there will be around 300 million electric vehicles on the road by 2040. Automobiles have always been a good predictor of consumer behavior. Analyzing the change in behavior can sometimes give us quicker insights than a long-term energy-modeling exercise would suggest. We can correlate this with Tesla Model 3 sales in the U.S. this year. The Model 3- Fully Electric Car is now more popular than the entry-level luxury offerings of Audi, BMW and Mercedes-Benz combined.
The World Energy Outlook also predicts that the demand for petrochemicals will grow to replace transport fuel demand. India’s petrochemical sector is one of the fastest growing with CAGR (Compound Annual Growth Rate) of 8%+ over the last five years. The sector is a key input for an array of vital substances, including plastics, solvents, fertilizers, and pharmaceuticals. The factors that have driven the industry forward include strong GDP growth, changing consumer pattern. India’s per capita consumption stands at 10kg compared to the global average of 30kg, indicating significant headroom for growth.
Diversification from transportation fuels to the production of niche petrochemicals will significantly alter the refineries landscape in India. This will eventually give a boost to a completely new set of industries like development of dedicated plastic parks to a promote cluster approach in the areas of plastic production and plastic recycling, R&D to synthesize a new and advanced class of polymers and alternative feedstock like biomass for 2G Ethanol production as method to produce cleaner fuel. Such auxiliary sectors would require a skillsets which are traditionally different from the existing skillset of refinery sector.
In order to realize these aspirations, it is pertinent to address the people & capability dimension appropriately. From the framework of Mercer Strategic Workforce Planning Model, refiners either have to ‘Buy’ i.e. purchase external talent through increased recruitment cost or ‘Borrow’ i.e. rent talent from contracting agencies or consulting firm. Both these options come with a cost which directly impacts the bottom line of the corporation.
The option which can provide a sustained competitive advantage to organizations is to ‘Build’ the talent i.e. develop talent from within, through increase in training interventions. However, relying heavily on one option would not fetch the desired results, a combination of strategies has to be evolved depending upon the organization demography and the industry context. In this light, one thing which is quite evident is that the oil industry requires reskilling at a massive level.
This fact is also substantiated by the World Economic Forum report on “Future of Jobs, 2018”, which states that 54% of employees of large companies would need to up-skill in order to fully harness these growth opportunities. Without reskilling, only 2% of workers would have an optimal opportunity to transition to new jobs – while 16% would have none at all. A huge reskilling task is required to safeguard workforces from an expected wave of automation brought on by the Fourth Industrial Revolution.
Founder and Executive Chairman Klaus Schwab said and I quote, “It is critical that business takes an active role in supporting their existing workforces through reskilling and up-skilling, that individuals take a proactive approach to their own lifelong learning, and that governments create an enabling environment to facilitate this workforce transformation. This is the key challenge of our time” said World Economic Forum
At the individual level, workers will have to engage in lifelong learning. For companies, reskilling and up-skilling strategies will be critical. For policy-makers, reskilling would be essential levers to fuel future economic growth, enhance societal resilience in the face of technological change and pave the way for future-ready education systems for the next generation of workers.
Owing aforesaid, there are two challenges which are coming up apparently and HR has to play a pivotal role. It is an effective HR strategy to balance all the 3 systemic pillars viz ‘Ability Enhancements’, ‘Motivation Enhancement’ and ‘Opportunity Enhancement’. Ability enhancement ensures the right kind of talent with the required competencies joining the organization. It deals with Recruitment & Selection, Learning & Development & Talent Management facets of HR. Motivational Enhancement System ensures the right kind of talent is retained and motivated enough to continuous improvement and it is addressed by managing performance, potential, Rewards & Recognition. The 3rd pillar is an Opportunity Enhancement System which facilitates an employee to reach his peak potential- this can be done through job design, diversity and inclusion, succession planning and career path.
Both Motivation and Opportunity Enhancement Pillars have evolved of late as a result of the strategic role of HR while Ability Enhancement is more of a traditional one. I believe there would be the tectonic change in a way we operate, Ability Enhancement system will again gain prominence with massive reskilling of the existing workforce, hiring talent with a completely new skillset like cybersecurity advisor, environmentalist, IoT(Internet of Things)/AI(Artificial Intelligence) experts etc.
The second conundrum is related to the sphere of Government of India undertakings i.e. all Public Sector Enterprises. India has a mixed economy where both the public and the private sector coexist together. It is imperative for PSEs to change with time and adapt to new technologies to remain competitive in the market.
At the same time, framers of The Constitution envisaged India to be a socialist, a welfare state, which place moral obligation on state to provide livelihood & jobs to its citizens. In a scenario where Automation / Artificial Intelligence is fast replacing humans and private sector embracing it to gain a competitive position in the industry – there is a conundrum, a dichotomy for all Public Sector Enterprises. A clear way forward balancing both the aspect of competitive advantage and employment generation is the need of an hour. It would definitely require clear policy intervention by the government in times to come.