Talent Management | Energy | Oil

Business was booming at “Big Oil Enterprises” (BOE), one of the world’s largest integrated energy companies. The company’s plans for growth and its global activities meant there was plenty of work to be done. But finding the people to do it was becoming a challenge – and executives knew that the problem, if not promptly addressed, would only get worse.

Going global with talent management
BOE’s Human Resource (HR) leaders began to recognize that the company’s decentralized approach to talent management, structured in a manner that required each business unit to do its own recruiting, training, performance management and succession planning, was becoming increasingly outdated. Because the activities of the traditional “upstream” (production) and “downstream” (refining and distribution) business units were starting to overlap, BOE needed to be able to quickly identify specific resources and effectively move them to other business units. BOE also wanted to be able to meet its younger workers’ expectation to be able, if they wished, to work in a variety of different environments. In addition, improved visibility of talent across the enterprise would make it easier to identify and cultivate future leaders, who would need to understand both upstream and downstream perspectives to be effective.

To address these issues, BOE’s corporate and business-unit HR leaders resolved to manage talent in a more integrated manner across the global enterprise. Two business units that needed the most help, the global energy trading business and the global IT organization, were addressed first.

Trading on the future
With the price of crude soaring, BOE wanted to expand its energy trading business to take advantage of the opportunity it saw in the energy trading space. Unfortunately, BOE’s trading apprenticeship program wasn’t producing enough qualified traders to meet management’s growth targets. Recruiting efforts were also failing to yield traders, analysts and other key employees in the necessary numbers. In addition, BOE’s most effective traders were being poached by industry competitors as well as by higher-paying investment banks and other companies outside the energy industry.
In collaboration with global HR, the energy trading organization created an Organizational Talent (OT) function to overhaul the energy trading organization’s talent recruitment, retention and training programs. Deloitte provided services to help the OT group in its efforts to:

Understand the organization’s needs: To better define the employee skill sets required by the energy trading group, the OT group identified five “critical work force segments” – traders, analysts, operations schedulers, trading leaders and business development/origination specialists – and developed a detailed competency framework to describe the required skills for each segment.
Recruit the right people: Once the competency framework was built, recruiters received competency-based recruiting toolkits, including interview templates, career ladder information and evaluation criteria for behavior-based interviews, to enhance their talent sourcing efforts.
Improve training: A competency-based curriculum has helped to better align the energy trading group’s trader training and development activities with the business’ objectives in the energy trading market.
Pay competitively: BOE implemented a variable pay plan that made the company’s compensation packages more competitive.
Engage the work force: As part of the change process, the energy trading organization invited its top-performing traders to advise those in the OT group on the capabilities needed to do their jobs as well as their own career expectations, helping to boost the traders’ interest in remaining with BOE to experience the future they had helped
to create.

The OT group’s efforts have enabled BOE’s energy trading organization to increase its head count utilizing both internal and external sources. BOE’s leaders are confident that the energy trading business unit now has the talent management capabilities to meet the company’s business objectives of better leveraging oil price volatility and expanding its activities in the energy trading space.

Tech talent
BOE’s global Information Technology (IT) organization faced its own set of challenges. An estimated 700 to 1,100 employees, representing nearly one-fourth of the work force, were projected to leave the organization within the next three to five years. Low campus recruiting numbers and the changing needs of the IT organization further exacerbated the problem. In addition, BOE’s business units were in need of IT personnel who could quickly understand the business units’ needs and develop customized solutions to meet those needs. This required employees with a blended background of business and technical skills. Moreover, BOE’s decentralized organization made it difficult for IT leaders to coordinate talent initiatives across business units. Finally, the “pay your dues” culture was not supportive of Generation Y hires expecting immediate access to meaningful work and varied experiences.

BOE’s IT leaders decided to mount a coordinated global attack on their shared talent dilemma by establishing an IT Global Talent Management (IT GTM) organization. Deloitte provided services to help IT GTM’s and the global IT function’s efforts to:

Understand its talent needs: IT GTM created a strategic staffing plan that helped IT functional leaders identify emerging skill needs and critical talent gaps, including the need for blended business and technical skills as well as “hot” IT skills such as information management and architecture.
Accelerate people development: To accelerate the professional development of new college hires, IT GTM launched a competency-based learning and development program. The program offers new college hires 20 hours of training in each of their first five years of employment and rotates them through at least two different job roles during that five-year period.
Improve campus recruiting efforts: To improve campus recruiting results, a series of process improvement efforts were put in place. A campus recruiting video was developed to showcase the interesting IT work at BOE, and recruiting collateral was revamped to better articulate the employment opportunities available at BOE.
Monitor talent needs: A newly developed “People Agenda Scorecard,” including such metrics as head count growth rates, attrition rates and employee diversity, now allows IT leaders to monitor talent needs and the progress toward the attainment of the global IT function’s talent goals.
Reorient the culture: Flash video presentations, high-quality new marketing collateral, an “Intro to IT” course for new hires and town hall meetings in the business units reinforced the message that talent was of vital concern to BOE’s IT leaders and essential to the future of the business.

As a result of these initiatives, the IT GTM organization is now providing the global talent management solution envisioned by BOE’s IT leaders. In the spring 2007 campus recruiting season, BOE’s IT recruiters in the United States surpassed their hiring target by 10 percent, while the employment offer acceptance rate increased to 76 percent compared with 61 percent in the previous season. In addition, the IT organization’s attrition rate, originally projected to reach 6-7 percent, has been maintained at about 3 percent during IT GTM’s first year of operation.

The bottom line
With the initiatives taken in the energy trading business and the global IT organization, BOE has the ability to more effectively recruit and retain talent in the areas it needs to fuel its future growth. At the enterprise level, BOE in now taking the lessons learned from its two initial projects and applying them to the rest of the enterprise, working toward a unified talent management strategy that can help the company take its people issues in hand across its global operations.

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