It is estimated that some 25-50 percent of an average oil and gas company's HR budget is spent on staff training, but few companies have the tools necessary to measure the financial returns of this enormous investment.
Company senior management is not always keen on realizing the necessity of such an expense. As some industry professionals ponder, "A whole separate department is needed to perform higher mathematics in order to calculate the effectiveness of training."
On September 20th, representatives from the oil and gas industry giants such as BP, Hydro, Petrofac, Shell, Schlumberger, LUKOIL Overseas, Rosneft and Sibur, among others, converged at a round-table conference titled "Training and personnel development at oil and gas industry companies," organized by ANCOR Energy Services, to share their knowledge of pressing human resource issues and that of training in particular.
The sporadic and isolated nature that training programs have traditionally bore, according to Oleg Sidomonidze, the Business Development Manager at Schlumberger, in combination with Russia's political and economic instability that cause company needs to change constantly, make it difficult to plan ahead and build a training system oriented on the future perspectives. "We're currently in a state of what I call 'partial knowledge deterioration,' where knowledge of the industry becomes outdated after five years. Before this, we paid a lot of attention to recruitment, to comp and benefits, to social aspects, to corporate culture, but we never paid any attention to training, thinking that we'll buy or find professionals, that they'll come to us. But it's impossible to 'buy' specialists," expounded Sidomonizde during a presentation he made on the Network of Excellence in Training (NExT) for his colleagues.
As company leadership's priorities tend to change swiftly and aim at maximizing immediate profits, long-term training schemes become difficult to implement. In order for any training program to prove efficient, according to Sidomonizde, questions of who gets trained on what, how, when, and for what purpose must be accurately answered before any strategy can be successfully implemented. However, as the difference of opinion expressed on this subject demonstrated, the issue of which employees should get trained is a rather complex one.
Although it is easy to calculate the ratio of trained employees to the number or accidents or mistakes in production or poorly serviced equipment, the same can hardly be done in the finance, legal, or management aspects of a company. "The higher the level of an employee, the more difficult it is to judge his or her role," said Natalya Pradedova, a specialist on personnel evaluation at Rosneft. In addition, although training can help expand everyone's horizons, many company employees spend all their time performing one single task, and may not justify training expenditures. "Is it worth training those who spend years performing the same function and don't aim for anything else?" asked Pradedova. "There should not be too many leaders in a company, not everyone should be a star, because someone has to perform mechanical work as well. We need people who would competently perform specific work only."
The question of training subject matter likewise proved controversial. When responding to a poll conducted by Sidomonidze on the most common training subjects, the participants named "leadership" among project management, risk management, new technology or professional training, and languages training. But as further discussion revealed, the Russian definition of "leadership" is different from the traditional one in the west - by "leadership" many of those present meant self-motivation, the ability to motivate others, effective resource allocation skills, and teamwork, but not the ability to issue orders, as it was noted that "there should not be two leaders on one team." Most did agree that the training process must begin with the "head" (top management), whose yearly evaluations could be a stimulant for better work, while other employees, from recruiters to administrators, should be able to understand and appreciate the profit that their work brings to the company. Realizing why they do the work that they do will help people be more efficient at filling knowledge gaps and more responsive to training.
On the issue of effective training techniques, participants agreed that factual application of knowledge should not be separated from theoretical study, as some attendees shared positive experiences of training projects intertwined with actual work on current projects. Mentorship programs, buddy-time, and coaching by professional staff for the sake of preparing successors were also deemed efficient if the coaches can remain on top of new technologies, and don't fear the competition that may arise when these apprentices feel ready to replace their mentors before the latter have retired.
Changing the geographical location of an employee also helps them to acquire experience, but presents a danger of that employee choosing not to return. "There is a lack of employees, Russian professionals, both here and abroad," noted Marina Kudryavtseva of Shell. "Russian specialists get sent abroad, but most never return." The likelihood of this scenario, however, appears to be much smaller for international companies, such as Shell or BP, than for locals such as Rosneft. "Employee rotation," when certain staff is sent to a company's regional branch office in order to develop that branch, is also a common element of "career planning" procedures that many companies use to provide their employees with opportunities for growth.
Training can also help resolve the issue of enormous salary increases in the industry. According to Pradedova, salaries have grown by some 20 to 25 percent in the last year alone because of the lack of competent specialists on the market. "We understand that if we continue raising salaries, we can crush the market. But what can you do? No specialists means no projects." Yet a good salary is mostly viewed as a purely "hygienic" factor on the market, as employees get more attracted by bonuses, benefits, and corporate culture.
Investment in training does bear certain risks, such as losing valuable employees who quit upon the completion of their training. It is estimated that some 50 percent of young specialists quit a company in their first year alone. "What's better, to teach employees and see them quit, or not to teach them and have them stay?" asked Anatoly Nabokov of LUKOIL Overseas of his colleagues. As unqualified personnel is likely to be "dead weight" for a company, it was generally agreed that employees should be trained regardless of the risk of losing them to another company, if only for the sake of the general level of the oil and gas market, which is rather narrow in Russia.
Another downside of training is that, according to Andrei Valyaev of Sibur, the more an employee is trained, the more his or her demands for career growth and ambitions grow. "The more I know, the higher I want to sit," he explained. In conclusion, attendees agreed that offering "motivation" packaged carefully tailored to every employee's needs and qualities can help minimize such risks.
While attempting to get to the root of the personnel shortage problem, the question of the government's social responsibility in supplying the industry with qualified professionals broached a patulous discussion on the current state of university education in the field. As the Russian education system becomes increasingly commercialized, the students' academic background weakens. Universities are forced to follow outdated government standards that are in great need of adjustments, but most universities and teachers are not ready to accommodate the companies' needs and demands, which are tougher than those of the government. "The problem is that in all the departments of all the universities, less than 1 percent of teachers is under 40 years old," elaborated Anatoly Nabokov of Lukoil Overseas. "60, 65, 70 year old professors continue lecturing using the same materials they used when they began teaching." Many companies are thus resorting to getting their own specialists and managers involved in university programs together with the teachers, or, in the case of large companies who can afford it such as Rosneft, organizing their own university departments lead by company executives, thereby replacing the state in its supposed educational role.
Although there was some disagreement on the best ways to stimulate employee interest in training and measure its results, one opinion was unanimously held - oil majors need to act quickly to attract student interest to the industry if they want to stay in business for another 25-30 years. As the general population declines and the industry's image deteriorates, competition with the fields of IT, advertising, marketing, and law for the best talent gets tougher by the minute. Thus, oil and gas companies need to collaborate in marketing the industry to students and children. "Promoting the image of the entire industry to school children will help us in the future," expressed his opinion Thomas Dowdy of BP. Collaborating in the area of producing informative documentaries to be shown in school classrooms may help to spark young children's interest in the industry.
As the discussion wrapped up, all participants agreed that such experience sharing events are useful and productive, and thanked ANCOR Energy Services for the well-organized conference. Konstantin Borisov, the general director of ANCOR Energy Services, promised that more events of such nature are to follow soon.
