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Talent Management in Upstream Oil & Gas Industry 1.

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Presentation on theme: "Talent Management in Upstream Oil & Gas Industry 1."— Presentation transcript:

1 Talent Management in Upstream Oil & Gas Industry 1

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

3 Talent Management - Concepts 3

4 Talent High Potential Employees Succession Planning Leadership program Respecting Employees Organizational Capability to build Talent - Culture, Teamwork, Processes Leaders in Key Positions Talent Management means all of which requires a talent management process 4

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 for multiple stakeholders (employees, customers, investors) - Dave Ulrich 5

6 Talent Management – Essentials 1.Talent should align with organizational goals 2.Talent is not enough – teamwork is important 3.Talent has to be measured- Performance & Potential 4.Talent should match with position 5.Nurturing Talent requires investment 6.Talent elevates with contribution 7.Talent management is partnership between Line & HR function 6

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

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

9 Personal Proficiency Human Capital Developer Executor StrategistTalent Manager Leadership - Essentials 9

10 Talent Management Performance Assessment Potential Assessment Psychometric Tests Behavioural Event Interviews Coaching & Mentoring Assessment Development Centres (ADC) 10 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 11

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 12

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

14 The Test of Talent Material Visibility:Success or failure will be obvious Leadership vacuum: Requires aggressive “ take charge” Leadership Network: Work with unfamiliar people or a lot of different people, or both Pressure Cooker:Tough deadlines, high stakes,heavy travel, longer hours etc. Power Gap: Influencing people over whom you have no authority Novelty:High variety of work Scrutiny:Being watched & monitored Fix –it or start Up: Starting from scratch or turning something around Analytical complexity: Intellectual or problem –solving challenge with little or no history of guidance Significant Boss:Interaction with a positive or negative role model, or some one whose style clashes with your own Forced resourcefulness:An important element is missing Source : Centre for Creative Leadership 14

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

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

17 Line Manager’s View: HR Fails in TM % of interviewees in each category who agree HR Mgrs Line Mgrs Perception Gap(%) HR lacks capabilities to develop talent strategies aligned with business objectives 2558 33 HR is not held accountable for success or failure of talent- management initiatives 3664 28 Talent management is viewed as responsibility of HR 5836 22 HR doesn’t provide enough support to line manager 4358 15 17 Source:-Mckinsey Interviews, Analysis

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

19 Talent Issues in Oil & Gas Industry 19

20 Energy Scenario 20

21 West East 21 Energy consumption centre shifts from West to East due to demand from developing economies Energy consumption centre shifts from West to East due to demand from developing economies 19702008 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 22

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 23

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 Source – E&Y 24

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 25

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 26

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 27

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 28

29 How PSUs Compare in Compensation Level / years of experience Compensation Trend line for PSU Trend line for Market median 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 30

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

32 Employability Mismatch RequirementAvailability Drilling EngineerMechanical Engineers Electrical Engineers GeosciencesMsc Physics Msc Geology Msc Chemistry Reservoir EngineerPetroleum Engineers Msc Geology Production, Well EngineerMechanical, Petroleum Engineers There’s time lag of 3-7 years for fresher to become an oil man 32

33 ONGC A Case study 33

34 ONGC India’s integrated Global Oil & Gas Corporate ExplorationProduction Refining, power & value chainOverseas 34

35 ONGC: Strategic Business Units AssetsBasinsInstitutesServices Offshore Onshore 1.Mumbai High 2.Neelam-Heera 3.Bassein & Satelite 1.Ankleshwar 2.Mehsana 3.Ahmedabad 4.Karaikal 5.Rajahmundry 6.Tripura 7.Assam Plants 1.Uran 2.Hazira 1.KDMIPE 2.GEOPIC 3.IDT 4.IRS 5.IOGPT 6.IEOT 7.INBIGS 8.IPSHEM 9.ONGC Academy 10.SMP 11.CLS 1.Geophysical 2.Drilling 3.Logging 4.Well 5.Engineering 6.Logistics 7.Technical 8.HSE 1.Western Offshore 2.Western Onshore 3.Cauvery 4.KG & PG 5.CBM-MBA 6.MBP 7.AA&A 8.Frontier Support 1.HR/ ER 2.Finance 3.MM 4.Legal 5.Medical 6.Security Corporate Functions Planning, E&D, Infocom, Vigilance, Audit, Marketing, Commercials, JV&BD, PMBG KEYPOSITIONSKEYPOSITIONS 35

36 OVL: India’s Biggest MNC Venezuela 1 1 40 Projects in 15 countries 23 Exploration9 Producing7 Under Development 2 Cuba 5 Columbia 1 4 Brazill 1 3 Libya 2 Nigeria 1 Nigeria JDZSudan 2 Egypt 2 Syria 1 1 1 IraqIran 1 2 Vietnam 1 3 Myanmar 2 Russia 2 36

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

38 Manpower 38

39 Manpower 39 Geosciences 4083 Production, Drilling, Engineering 13761 Logistics, Finance, HR etc. 15256 Transformational Distinctive Advantage Support Staff

40 Ageing Manpower 40

41 Increasing Retirements year 41

42 Talent Management in ONGC 42

43 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 43 Acquire Build Promote Retain Outsource 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 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 44 Acquire Build Promote Retain Outsource

45 Building Talent -Training & Development - Well developed T&D Infrastructure & program -Training Calendar based on Requirement, ADC & Interaction with Line Managers ONGC AcademyExecutive Induction & Training Institute of Drilling Technology Certified training on drilling & Well Control Institute of Petroleum & Exploration Training on Geosciences & Basin Research Geodata Processing & Interpretation Centre Seismic Data Processing & Interpretation & Seismic Software Development Institute of Reservoir Studies Training on Reservoir Management & Modeling Institute of Safety, Health, Environment Management Safety Health & Environment Training Institute of Oil & Gas Production Technology Training on Production Technology Institute of Engineering & Ocean Technology Training on Geotechnical & Structural Engineering School of Maintenance Practices Certified training on Oilfield Maintenance of Equipments R T I sStaff Training 45

46 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 46 Acquire Build Promote Retain Outsource

47 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 47 Acquire Build Promote Retain Outsource

48 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 48 Acquire Build Promote Retain Outsource

49 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 49 Acquire Build Promote Retain Outsource

50 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 50 Acquire Build Promote Retain Outsource

51 Retaining Talent- Best in Class Welfare Facilities Medical Facilities for Self & Family, Retired employees & Spouse Post Retirement Pension Scheme (PRBS) Composite Social Security Scheme Sahyog Trust Liberal Maternity, Child Care & Paternity Leave House Building & Conveyance Advance Other Benefits like Leave Fare Assistance, Holiday Home etc. 51 Acquire Build Promote Retain Outsource

52 Retaining Talent - Work Life Balance Business Games for Executives – Conducted in three phases consisting of Online Test, Simulation Games, Case Study, Buzzer Round Fun Team Games for Staff – Consisting of Online test, Outbound Games, Group Activities etc. Gymnasiums at Offshore Installations & Colonies Sports Activities Cultural Programs for employees & families Training on Yoga, Meditation,dance for fitness etc Outbound Trainings on Group Dynamics & Leadership For the fairer gender, proactive management support to WIPS,WDF,WILL, Mahila Samitis Resident Welfare Associations 52 Acquire Build Promote Retain Outsource

53 Retaining Talent - Inclusive Governance People like working for organization which is responsible, ethical and inclusive Employee communications - ONGC- Reports - open to all employees to post comment, feedback, suggestions Grievance management System Corporate Social Responsibility – 2% of profit. Employees and families are involved Right to Information – Timely reply to information sought Vendor Invoice monitoring System Grant to SC/ST Welfare Association, component plan Employment to Sportsperson & Encouraging sports Employment to Physically & Mentally Challenged Brand Building for Corporate Image & Employee Morale 53 Acquire Build Promote Retain Outsource

54 Outsourcing -Well established outsourcing policy, rehabilitation and golden handshake. -Nearly 500 contracts for services involving secondary workforce of nearly 25000 -Partnership with consultants & domain experts including retired employees Acquire Build Promote Retain Outsource 54

55 Course Correction – Feedback Surveys To gauge the employees mood & to make course corrections organization wide surveys are made with help of outside consultants:- Employee Engagement Survey – Online Survey to find the magnitude of employees engagement. Results were encouraging as engagement level was more than industry average Climate Survey – 10.5 % of employees were covered, Questionnaire designed to cover all aspect. Interviews were also conducted. Outcome used for HR interventions and Course Correction 55

56 The Result - ONGC Group- Performance Value in Rs. Crores 56

57 The Result – arrested attrition Attrition reduced from 1.13 to 0.11% of total strength 57

58 58

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