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Lack of succession planning affects oil and gas industry leadership

Oil and Gas companies are failing to implement sufficient succession planning, a new report from Hay Group has found.

The paper, entitled ‘Enhancing your leadership reserves’ revealed that only a half of respondents said they had enough employees ready to take on leadership positions – jeopardising future business goals.

Speaking exclusively to Executive Grapevine, Hay Group Director and co-author of the report, Sherief Hammady, explained: “The reason we set out to do the research was because we noticed that a lot of oil and gas companies are not very good at engaging and motivating their staff.

“As well as this, in comparison to other sectors, Oil and Gas is not very good at developing leaders more broadly, so this was an obvious issue that we wanted to unpick.”

Hammady commented that the industry tends to focus on succession planning in terms of technical development – which means leadership planning experiences a ‘lack of focus’.

“Although the industry is very long-term in the way it operates, there are a lot of short term responses in terms of human capital,” he said.

“For example, human resources in this industry tends to focus on the short term, such as attraction of new staff, paying people more to bring them in, being able to poach good, skilled people from other competitors, etc. But there is a lack of focus on long term succession planning due to operational constraints.”

Hammady also suggested that the problem lies within investment, as developing technical capability takes immediate priority.

“Developing leadership pipelines is even more difficult than developing your technical capability because, within a very technically focused sector, developing leadership pipelines is about breadth, which is almost at odds with a lot of what companies need to do in terms of investing in people’s depth and expertise. There’s a bit of a challenge here because of that.”

Hammady explains that recruiting for a pipeline is different from recruiting for a job.

“I think a lot of the time it’s a case of recruiting for a job to fill a current vacancy, rather than a pipeline, which needs to look into more innate capabilities that would serve someone well over a long term period, rather than just for the next role.”

“Only the large, integrated companies tend to have better responses to leadership development, but the issue that they would then have is looking at it holistically and early on, so really looking at the leadership pipeline early on in people’s careers to be able to provide that breadth of experience.”

Ref: HR Grapevine

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