The accelerating pace of people switching jobs in the energy sector in the past few weeks is the visible tier of a market that is being characterised by high levels of attrition.
Especially as we reach bonus season, we will be looking at a high level of replacement roles as well as new desk hires, even in the face of greater uncertainty caused by the pandemic and economic downturn.
We are seeing one of the busiest recruitment markets ever, as well as a shift in how and where people are moving to, which will have long term implications for the energy industry.
Many are already seeing their employee base under significant threat, with almost all firms having lost staff to competitors this year. The probability of companies losing even more employees is very high across the energy sector. We understand that turnover across the market is averaging at between eight and 20 per cent.
Market volatility has led to high deal flow, which means greater focus on trading and origination – the result is an increased volume in recruitment for these two specialist areas as well as in analytics, particularly within power, gas and LNG.
Many businesses are recruiting to enhance or expand teams, and there is also a focus on replacement hires.
A number of new funds and trading houses are investing heavily to set up or acquire entire teams leading to increased competition for the same talent pool in all the main global centres.
The effectiveness of working from home means that it is easier to approach key employees and to recruit cross-border. Businesses no longer need their workforce to be within commuting distance of their main trading centres.
Where typically many would wait until the annual bonus to make the switch, this does not seem to be a factor as hiring companies are offering buy outs of 2020 bonuses as well as guaranteed bonuses for 2021 as standard.
What is your plan?
Now more than ever, it is essential to have an effective plan in place to deal with employee churn. We are encouraging our clients to examine their workforce in detail, to understand the dynamics of the war for talent so that they can effectively reduce the impact of attrition.
The action plan addresses a number of areas:
- Review the need for across the board salary increases immediately and be prepared for these to be much more significant than previously. Even individuals who are happy where they are can struggle when they keep being called for mandates that are many thousands higher than they are currently earning. At the same time, review bonuses and benefits and consider how these can be framed to attract and retain key employees.
- Develop a succession planning strategy that is ongoing and looks beyond the obvious talent. Look at how succession planning can support diversity and inclusion, a better work culture and the creation of new opportunities for employees for whom finding the right fit is as important as the financial benefits.
- Invest in the right research so you make informed decisions on data. The situation is dynamic so review data regularly to ensure you have the most up to date picture.
- Don’t overlook the soft factors and the importance of career progression. The majority want flexible working and an inclusive culture that makes it easier to find the right work/life balance. Desk leads want to move into a more modern working arrangement where they can have a voice in the overall strategy. Many are looking for the opportunity to take an entrepreneurial approach within an established business by establishing a new desk or product line. Ensure there is a continuous development plan to stretch and grow your talent.
- Look beyond the usual suspects. There are people with highly transferable skills currently working in other sectors who may be ready to join a different industry that is making a positive impact at a time of enormous change.
- Look beyond your usual competitors in your succession planning. Technology and online businesses are hiring the same mathematical and analytical skills and they are able to attract talent by offering appealing packages.
Attrition is the new normal and it is likely to accelerate. A new generation of millennial talent now progressing to senior level isn’t looking for linear or vertical careers. They don’t have the traditional reservations about taking a sideways, downwards or completely lateral career step because their life goals are different.
Ensure you have a plan that anticipates the likely moves but equally think beyond previous experience and be open to the unexpected: employees moving to start-ups and other industries. Always know how you will fill every role should the need arise.
Succession planning is a continuous business strategy not an emergency measure when a major resignation hits your desk.