In 2019, McKinsey identified that companies with a significant proportion of female leaders consistently outperform their peers. So why is it that industries such as Oil & Gas still struggle to attract, retain, and promote diverse talent?
As an industry, there are fewer women working in Oil & Gas than almost any other industry according to research Catalyst. This is further compounded the higher up the executive ladder you climb, with just 1% of CEOs in the sector being female.
This is not a new challenge. The Oil & Gas sector has consistently suffered in terms of attracting diverse talent, resulting in a lacklustre pipeline which lacks diverse candidates in the traditional technical positions which so often facilitate career advancement in such organisations.
So why is gender diversity so important in business? This goes far beyond just creating equal opportunities in an organisation. It is widely reported that organisations with a greater diversity amongst their executive leadership team – gender, ethnic, or diversity of thought - are much more likely to achieve above-average financial performance vs those with a much more homogenous exec.
This is something that senior leaders in the industry are very aware of. According to a recent survey conducted by EY focussing solely on the Oil & Gas industry, 94% of respondents agree overwhelmingly that diversity of thought and experience are key to navigating the disruption in the industry and that by developing diversity across a company isn’t a quick fix but is long term business imperative.
In the same survey, 61% of respondents said that diversity does impact financial performance; a further 77% said it affected non-financial performance. Yet there still seems to be a grey area between the understanding of the importance of seeking greater diversity – and the practicalities of putting a solution into place.
The industry is facing multiple ‘people problems’ from an ageing workforce and a significant skills shortage. These challenges have only been compounded by a global pandemic which almost brought the industry to its knees. The traditional Big Oil companies are additionally trying to navigate the Energy Transition, likely to be the single most significant transformation in the sector. Taken altogether, it seems there has never been a better time to enhance diversity in the workforce, perhaps beginning by looking to redress the gender imbalance.
From the research conducted to date it is clear that as an industry, Oil & Gas still has some way to go to achieve the gender splits achieved by many of its peers in other STEM industries. This has been attributed to a range of factors – some cultural, some based on the outdated idea that women can’t or don’t want to, work in an industry which can be physically challenging. However, there are signs that as an industry Oil & Gas has recognised the need to have greater gender diversity across their organisations and particularly at Senior Leadership and Board level.
In the UK alone many of the industry’s biggest names have signed up to the Axis Pledge, an independent body which is committed to attracting, retaining, and developing a diverse workforce in the Oil & Gas industry. However, a commitment is only as powerful as the actions taken thereafter. Fundamentally there needs to be a change in mindset from entry level and up to promote and retain women within the industry to create the foundations of a sustainable pipeline of female talent. In addition, the industry should consider programmes investing at an early stage in encouraging girls to pursue STEM subjects at school and university – this approach has been successful in other sectors and would undoubtedly contribute towards encouraging women into Oil & Gas.
Most critically, as an industry there needs to be a significant cultural shift to ensure these commitments are not simply taken as ‘lip service’ to the idea of diversity. Leaders must commit to an “unlocking” of the conscious and unconscious bias that is still present in many Boardrooms in the sector. The Axis Pledge is a great place to start – after all, admitting there is a problem is the first step on the road to recovery. But a few simple high-profile placements, promoting women into Senior Leadership and Board positions will not solve the problem. Without a sustainable pipeline of female expertise, the industry faces a talent crisis on the horizon, which will dwarf the current skills shortage.
To find out more about how we can help with you your people or organisational challenges, or to talk through a challenge or potential assignment, please do not hesitate to contact Mike Wallace via mike.wallace@normanbroadbent.com for an initial confidential discussion.