The past decade I have spent working in employment law in Aberdeen, primarily in the oil and gas sector, has seen sweeping changes in the way the energy industry deals with diversity and inclusion.
In the last four of those ten years, the focus, naturally, has been on the impact of the oil and gas downturn, subsequent downsizing, restructuring, and in many cases just simply surviving, and against that backdrop it is easy to lose sight of the major progress the industry has taken in employment best practice.
One very positive aspect I have witnessed is the increasing awareness and commitment to diversity and inclusion. There has been an awakening to the relevance of these issues, and some companies have not just become aware but have made a radical cultural shift in the way they deal with these matters. There is still a lot to be done, but what has been really noticeable about this sector, in particular, has been the speed of change of mindset and approach over the last couple of years.
Over those same years, there has been a much more transactional approach to HR-management and much less focus on strategic work, which ensures businesses have the right employment processes and structures in place to prosper.
By transactional HR, I mean it is apparent that HR teams have been forced to be reactive, dealing with the basics such as implementing existing policies, handling disciplinary and grievance issues, and, in some cases, rapid restructuring. This has meant strategic HR has suffered, with little focus on the holistic aspects of people-management such as talent-progression, rewards, recognition, motivation and engagement.
To say strategic HR was abandoned may be putting it too strongly, but those types of HR functions either diminished or were put on hold. This is understandable because of the massive challenges many firms faced in the downturn where actions were being taken just to ensure survival.
However, now it appears a recovery is under way and we are enjoying a more stable oil price, it would be helpful to see a resurgence in proactive and strategic HR.
In the longer term, it is important for the success of oil and gas firms to look at all these issues, to ensure they have the right skills in their organisations, to make sure they are engaged with their employees, that they are attractive as employers, and that they are developing talent all the time, otherwise we will compound the future problems of skills shortages, competition on wages and related factors that affect the cost base and efficiency.
With thousands of people leaving the energy sector over the last four years, the industry has to work hard to make a compelling proposition for workers to return, and the challenge for employers is to make themselves attractive to new entrants. Certainly, the younger generation will remember the volatility of the last couple of years and there must be major benefits if they are to embrace that and consider a career in oil and gas.
Longer-term challenges for the industry will be the way the workforce will have to be reorganised in the next ten years or so as technological advances bring increased digitisation, automation and robotic working. In theory, the oil and gas sector should be better-placed to deal with change as it is inherently entrepreneurial, good at adapting to technological improvements, and having gone through the downturn, many companies are now more open-minded about doing things differently.
As I prepare to move to Perth in Australia, to strengthen Pinsent Mason’s offering in Australasia and Asia-Pacific, I am confident I will have no trouble assimilating in a city that mirrors Aberdeen as a strategically important oil and gas capital, and the experience of working through the North Sea crisis will be put to very good use in supporting Scottish and UK businesses with Asia-Pacific interests.
Katie Williams, partner and employment law specialist at Pinsent Masons.