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Talent Management in Upstream Oil & Gas Industry PowerPoint Presentation
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Talent Management in Upstream Oil & Gas Industry

Talent Management in Upstream Oil & Gas Industry

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Talent Management in Upstream Oil & Gas Industry

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  1. Talent Management in Upstream Oil & Gas Industry

  2. Agenda • Talent Management – Concepts • Energy Scenario • Talent Management in Upstream Oil & Gas Industry - Issues • ONGC – A Case Study

  3. Talent Management - Concepts

  4. Talent Management means all of which requires a talent management process

  5. Talent Management is a systematic process (not an event), to secure general and targeted individual competencies ( knowledge, skills & values) and organizing capabilities ( not just a person, the process) that create sustainable value formultiple stakeholders (employees, customers, investors) - Dave Ulrich

  6. Talent Management – Essentials • Talent should align with organizational goals • Talent is not enough – teamwork is important • Talent has to be measured- Performance & Potential • Talent should match with position • Nurturing Talent requires investment • Talent elevates with contribution • Talent management is partnership between Line & HR function

  7. Talent alone is not sufficient Focus on Goals 2 Group Think 4 True Diversity Focus on Goals 1 mindless 3 Chaos Value differences

  8. Talent alone is not sufficient Characteristics of High Performing teams Purpose Leadership Governance Learning Relationships Source : Dave Ulrich

  9. Leadership - Essentials

  10. Talent Management • Performance Assessment • Potential Assessment • Psychometric Tests • Behavioural Event Interviews • Coaching & Mentoring • Assessment Development Centres (ADC) Need for Measurement

  11. Ensuring the Right Fit • Recruitment – Attract talent to jobs that matches individual aspirations • Selection – should be a mutual process of discovery • Training & Development – Cross cultural training and aligning talent with organizational goals • Assignments – should be people – job fit • Promotion – Promoting the right people for the role • Attrition – Manage, but allow people who do not fit to go

  12. Talent – Needs Investment • Acquisition of Talent through from outside or inhouse • Building talent through Training & Development • Promote and Reward the right people • Retention of Talent by special interventions • Separation strategies for under performers • Outsourcing of Talent when required – short/ long term

  13. Talent evolves with Time High criticality Talent Evolution contribution commitment competence Time

  14. The Test of Talent Material Source : Centre for Creative Leadership

  15. Pay Attention to A s but Don’t Forget the B s (70%) Inclusiveness Nos. Performance C B A

  16. Partnership Between Line & HR Line Managers to take ownership & accountability for talent while HR professionals act as coaches & architects 2 4 Org value HR Professionals 1 3 Involvement Line Managers Source : The RBL Group

  17. Line Manager’s View: HR Fails in TM Source:-Mckinsey Interviews, Analysis

  18. Obstacles in Talent Management n=98 Business and Human Resource Leaders at 46 organizations Source:-Mckinsey Interviews, Analysis

  19. Talent Issues in Oil & Gas Industry

  20. Energy Scenario

  21. West East Energy consumption centre shifts from West to East due to demand from developing economies 1970 2008 Source: BP Statistical Review of World Energy-2009 21

  22. Oil & Gas Industry - Scenario • Oil Consumption - Crude Oil Consumption declined by 1.4% in 2009 from 85.04 mb/day to 84.04mb/day. In contrast non OECD countries led by India & China registered an 2.3 % increase in consumption - As global economy gains momentum crude consumption is bound to increase - In short term crude oil demand is projected to be 86 – 87 mb/d in 2011 • Gas Consumption - Gas consumption also declined by 3.3 % in OECD countries from 1488 BCM in 2008 to 1439 BCM in 2009. However, India and China registered significant increase in consumption. - Gas consumption is also bound to increase in future

  23. Oil & Gas Industry Development Oil & Gas Investments • In high Oil price regime total investment in the sector doubled in just 4 years from US$ 428 billion to US$ 864 billion in 2008. However due to volatile prices many companies slashed expenditure and investment in 2009 declined by 19% compared to 2008 Shale Gas & Bio Fuels • In short span of time shale gas revolution has changed basics of gas business in US. It now accounts for 20% of gas production which will increase to 50% in 2035 in US • In recent years bio-fuels has emerged as cost effective substitute in Brazil & US The Game Changer • The BP operated Deep water Horizon Rig disaster in the Gulf of Mexico raised grave concern about offshore drilling. Tougher regulations are expected

  24. Talent Shortage • India’s Oil & Gas Sector is likely to require around 25000 additional professionals in the next 5 years • 80% of the manpower required will be in core technical functions • Upstream Sector is expected to see a requirement of 7600 employees • Shortage will be due to high retirements & attrition

  25. Ageing Talent • Worldwide Industry average age is 49 • Average age of workforce in Oil & Gas Sector in India is following the global trend • This is inheritance from the past due to :- • Inconsistent oil prices • Cost cutting measures • Inconsistent recruitment • Hiring freezes

  26. Retirements • As a natural consequence to ageing workforce, employee retirements are going to peak in next 5 years in India • 11% of current workforce is estimated to retire in the next 5 year • 34% of the total retirements will be at middle management level • In PSUs like ONGC 47 out of 48 EDs will retire in next 4 years, 47 out of 56 GGMs will retire in the next 4 years

  27. Attrition • Estimated 7% will leave Oil & Gas Sector in the next 5 years • Significant reasons are lack of career opportunities and demanding working conditions. • In Upstream Sector most of the attrition will be at middle management level, who will leave for international opportunities • In Downstream & Marketing sector most of the attrition will be in junior management level Source : E&Y

  28. Issues in Talent Attraction • Absence of strong talent development strategy in organizations for attracting right talent • Lack of awareness about the sector in society • Hazardous nature of job • Working in Offshore and remote locations - isolation • Lack of adequate Career progressions, especially in NOCs • No differential pay for the Sector as per DPE guidelines

  29. How PSUs Compare in Compensation Trend line for Market median Trend line for PSU Compensation Level / years of experience Mercer Study-2004

  30. Inadequate Supply of Talent • Students even from traditional suppliers like IITs, NITs, ISM, IT-BHU preferring other careers • Lack of a structured internship process • Competition from global oil & gas companies • Faculty crunch • Lack of a strong Industry-Academia interface

  31. Declining Students Enrolment Petroleum engineering graduates, USA Geology students, USA ′000s Petroleum enrollment Bachelors Master's PhD Source:Energy Workforce Commission; American Geological Institute

  32. Employability Mismatch There’s time lag of 3-7 years for fresher to become an oil man

  33. ONGC A Case study

  34. ONGC India’s integrated Global Oil & Gas Corporate Exploration Production Refining, power & value chain Overseas

  35. ONGC: Strategic Business Units Assets Basins Institutes Services K E Y P O S I T I O N S Offshore • Western Offshore • Western Onshore • Cauvery • KG & PG • CBM-MBA • MBP • AA&A • Frontier • KDMIPE • GEOPIC • IDT • IRS • IOGPT • IEOT • INBIGS • IPSHEM • ONGC Academy • SMP • CLS • Geophysical • Drilling • Logging • Well • Engineering • Logistics • Technical • HSE • Mumbai High • Neelam-Heera • Bassein & Satelite Onshore • Ankleshwar • Mehsana • Ahmedabad • Karaikal • Rajahmundry • Tripura • Assam Support • HR/ ER • Finance • MM • Legal • Medical • Security Corporate Functions Plants • Uran • Hazira Planning, E&D, Infocom, Vigilance, Audit, Marketing, Commercials, JV&BD, PMBG

  36. 2 1 1 2 1 1 1 Egypt Cuba Iraq Columbia Brazill Myanmar Venezuela Iran Syria Nigeria Russia Nigeria JDZ Sudan Vietnam Libya 2 5 4 2 3 3 2 1 1 1 1 1 2 2 OVL: India’s Biggest MNC 40 Projects in 15 countries 23 Exploration 7 Under Development 9 Producing

  37. Manpower (Exclusive of 1722 term based/ deputationists)

  38. Manpower 38

  39. Manpower Transformational Distinctive Advantage Support Staff 39

  40. Ageing Manpower

  41. Increasing Retirements year

  42. Talent Management in ONGC

  43. Acquire Build Promote Retain Outsource Acquisition of Talent Regular Workforce – Each year ONGC is recruiting around 800 Graduate trainees through Campus Recruitment in reputed Institutes and all India competitive exams 1500 Staff level employees through competitive exams • This enables : Access to the best talent Equitable ditribution • Regular Workforce • – Each year ONGC is recruiting around • 800 Graduate trainees through Campus Recruitment in reputed Institutes and all India competitive exams • 1500 Staff level employees through competitive exams • This enables : • Access to the best talent • Equitable ditribution

  44. Acquire Build Promote Retain Outsource Acquisition of Talent Tenure Based Employment – Innovative Approach to induct positions in the field where fitness & agility is required • It infuses young blood • Meets fluctuating demands of the field operations • 1700 tenure based employees have been inducted so far

  45. Building Talent -Training & Development - Well developed T&D Infrastructure & program • Training Calendar based on Requirement, ADC & Interaction with Line Managers

  46. Acquire Build Promote Retain Outsource Building Talent -Training & Development Qualification Upgradation Programs • Mini Unnati Prayas – Multi - skilling for operation level staff through ITI • Unnati Prayas – Program for upgradation of qualification from Diploma to Graduate Engineers by class room & correspondence course through Punjab Technical University • Super Unnati Prayas – MBA program for executives with foreign exposure component through IMD, Gurgaon & IIFT, Delhi • Gyandhara – Certified Courses through e –Learning facility

  47. Acquire Build Promote Retain Outsource Building Talent - Leadership Development • Sangshaptak – Training of Senior Executives to prepare for Board level positions. Unique multi module program conducted at ISB for fast track employees. • Advanced Management Programs – This is a 4 week program for high potential middle management level executives. Program is conducted in IIMs, IMD Gurgaon with 2 week of exposure in Europe, America. • International Exposure through posting in OVL • Work associations

  48. Acquire Build Promote Retain Outsource Promoting Right People -Career & Succession Planning • Elaborate Job Rotation & Transfer Policy which regulates geographical transfers as well as change of assignments within the location. • Advancement is based on completion of prescribed job rotations • Inputs from ADC is also taken into account for higher level promotions/ placements

  49. Acquire Build Promote Retain Outsource Measuring Talent / Performance Management • e-PAR – Online Performance Appraisal System, Target Setting in the beginning, provision for mid term review, self appraisal, appraisal, review, co-review and acceptance. Rating is disclosed online. • Assessment Development Centres – Conducted for middle level managers. High potential managers are sent for advanced management program. Resource for identification Around 250 employees assessed last year • Performance Related Pay – Based on company, individual and group performance • Coaching & Mentoring – Through certified Mentors & Coaches

  50. Acquire Build Promote Retain Outsource Retaining Talent -Awards & Recognition • Annual Corporate Level Awards – Certificate from CMD and Holiday package for Manager of the Year, Professional of the Year, Young Execute of the Year, Innovator of the Year, Technician of the Year, Group Awards • Annual Regional Level Awards – Certificates from Key Executives on Republic Day • Performance Related Pay