- PwC global and US energy leader Niloufar Molavi has published a report about the importance of upskilling initiatives in the energy, utilities, and resources (EU&R) industry.
Recently, PricewaterhouseCoopers global and US energy leader Niloufar Molavi published a report about how the setting up of upskilling initiatives can help companies address the skills gap. The energy, utilities, and resources (EU&R) industry is getting hit with a major skills crunch. And in PwC’s 22nd Annual Global CEO Survey, it was determined that 76% of EU&R company leaders expressed concern about the availability of skills especially digital skills.
In a separate PwC study, 70% of power and utility leaders said they were focused on either recruiting or retaining talent for digital. Since automation and other market factors threaten some legacy occupations such as truck drivers at coal mines, those same forces are birthing new industries and jobs that were inconceivable just a few years earlier like AI programmers for solar farms. Every EU&R sector is experiencing this inevitable pull.
And in oil and gas, forward-thinking businesses are implementing digitization and technology integration projects for boosting performance management across the upstream, downstream, and integrated gas business. Plus this trend is now pushing traditional roles towards digital specializations and knowledge of ‘smart’ tools.
However, a recent PwC study found that 14% of surveyed millennials said they would not want to work in the oil and gas sector due to its image and it makes it less popular than both the defense sector and the finance sector. Plus power and utility enterprises have different challenges as they face having to become smarter and more digitally savvy in an era of accelerating the energy transition and changing regulations.
In the broader resource extraction sector, there is an increasing number of occupations that is likely to be affected by digital change with analysts suggesting that driller, miner and machinery operators may soon be supplanted by intelligent machinery technician and even drone pilot as the jobs with the greatest growth prospects.
According to PwC research, about 52% of energy sector customer service roles and 38% of power distributor and dispatcher roles are likely to be automated or transformed in the next 15 years. Plus there is also a marked shortage of qualified talent for new EU&R jobs, many of which require competencies in AI, machine learning, and robotics.
In order to address this issue, businesses and governments have to bridge the gap between the capabilities of current employees and the skills that will be needed to drive future growth. And they must do this by upskilling the existing workforce.
In a number of industries, managers are now focused on upskilling as an opportunity for expanding the capabilities of its employees and fulfill the needs of a disruption in the jobs market. Reskilling is different from upskilling as it is typically shorter term and targeted to specific groups. And upskilling is about identifying the knowledge, skills, and experience that will be most valuable in the future for new roles along with the individuals who would excel in such roles.
Plus upskilling is about developing an effective way to support and inspire people to take action today and continue to adapt — which means understanding the evolving skills gaps and mismatches along with creating the right employee experience and buy-in for unleashing energy for change, developing engaging skills-development programs, and driving ROI with an appropriate learning organization. Upskilling will be a net positive if carried out in an inclusive way.
And analysts and economists suggest that a wide-scale transition of workers from old to new energy sectors would be straightforward with new jobs drawing from many existing skills. For example, organizations like Iron and Earth (a nonprofit led by Canadian oil sands workers) are upskilling electrical workers so they can work on solar projects.
While upskilling is a significant cost especially when the calculations extend beyond flat training expenses. And full-time training could take several weeks, during which beneficiaries would continue to receive a salary and their previous roles would need to be covered by colleagues.
And so those expenses must be weighed against the alternative, including severance costs as well as the time and expense of recruitment and on-boarding of people with in-demand skills. Plus the payoff for upskilling can be immense.
PwC’s ROI analysis for existing cases shows a yield of at least $2 in revenue or savings for each dollar invested in upskilling.
Besides the major cost that comes with rehiring, upskilling brings economic benefits to people and communities as well. And it allows people to move to new jobs that are better and more future-proof and helps preserve a nation’s taxation revenues and reduce social safety net expenses.
PwC’s Global CEO Survey noted that 45% of EU&R CEOs noted that upskilling was the preferred solution to a shortage of skilled talent. And these executives put a premium on developing specific skills in data science and analytics.
PwC US power and utilities leader Casey Herman, PwC US power and utilities human capital leader Karen Brennan-Holton, PwC US Power and Utilities Advisory Leader Dan Whigham, and PwC US Industrial Products and Services Advisory Leader Jenny Koehler recently published a research report called “The Utility Platform Player,” which is about electric, gas, and water company leaders understanding they must continue to evolve their role and actively take steps in that direction. To gain a better idea of how peers are preparing to move forward ahead, PwC conducted a survey of senior industry professionals across the US working in regulated and deregulated markets.
Molavi provided 6 tips for effective upskilling:
1.) Build a future-proof skills strategy
Companies need a focused approach for addressing their future skills needs and insufficient training targeted at the wrong people can result in a major waste of time and resources. So companies have to act rapidly and refresh their upskilling strategies and ensure their learning organization and technology are effective and inclusive.
2.) Lay the cultural foundation
Leaders have to communicate to employees and stakeholders that upskilling requires a new approach to jobs, training, and career paths. And these leaders should think intentionally about how to shift the corporate culture to encourage and reward learning and the behaviors that enable upskilling. Plus they should also consider tapping into the potential energy of employees who are eager to learn and succeed.
3.) The building blocks of effective upskilling
It is a challenge to design and execute effective upskilling initiatives. However, PwC developed a strategy for doing so. It requires a business-led approach for bringing together professionals from areas like human resources, IT, finance, innovation and operations to develop a blueprint for action.
Every year in nearly every organization, 5% to 10% of roles radically change, which creates severe skills mismatches. And organizations need to plan for this. Attempting to replace workers who are poorly matched to their jobs will be difficult, time-consuming, and expensive. However, everyone in the workforce can benefit from increased digital knowledge and understanding.
4.) Assess the current environment and identify skills gaps and mismatches
It takes precise planning to get any upskilling initiative off the ground. And companies need to define the future needs of their workforce and understand the impact of automation.
After that is done, they must assess current workforce capabilities and compare them to needs. And at the same time, companies have to understand their organizational culture — which will inform their assessment of their capacity to handle and promote upskilling.
5.) Develop and implement upskilling
As companies develop and roll out upskilling campaigns, they have to work deliberately to create buy-in. And one way of doing so is to align rewards and incentives so that they encourage and ratify the choices and efforts of those who engage in upskilling. Plus companies must recognize that upskilling requires a significant commitment of time and effort, and act by creating space in employees’ schedules for learning.
In order to ensure that this time is used well, they must design engaging learning experiences that focus on building digital understanding. Plus as they engage high-quality training providers, companies must clearly communicate the purpose and objectives of the upskilling initiative.
With these efforts, organizations should stress that upskilling has the capacity to be a transformational personal journey for employees.
6.) Evaluate return on investment
Companies should not have to simply assume upskilling efforts work. Comprehensive digital systems have to be developed to track the participation and progress of large numbers of workers functions. And tracking employee engagement and performance against objectives will allow companies to measure the ROI they are making in learning and the return that employees are gaining on the time and effort they invest.
The success stories should be communicated internally and broadcast to the broader community in order to sustain momentum, boost excitement, and bolster the project’s wider acceptance. And companies should benchmark their learning and development functions so they can have confidence in their efforts.
Upskilling at PwC
PwC is walking the walk and talking to the talk. In October, the company announced it is investing $3 billion to upskill its employees and develop share technologies to support clients and communities.
