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HR PERSPECTIVE The Need for New Recruitment Strategies By Manoj Parmesh Country HR Manager, Weatherford India Business Unit ecruitment has become the most challenging human resources (HR) function across all industries today. For a specialized field such as oil and gas, the challenges are enormous. Why is it so difficult to attract new talent? There are three main reasons. First, industrial activity across the world is at an all-time high, which has created more jobs and thus shrunk the availabil
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  Talent & Technology   » 21 HR PERSPECTIVE The Need for New Recruitment Strategies By Manoj Parmesh Country HR Manager, Weatherford India Business Unit R ecruitment has become the most challenging human resources (HR) function across allindustries today. For a specialized field such asoil and gas, the challenges are enormous. Why is it so difficult to attract new talent?There are three main reasons. First, industrial activityacross the world is at an all-time high, which has createdmore jobs and thus shrunk the availability of personnel.Second, the oil and gas industry has been hurt over the past20 years because of its cyclicality and public perception.Third, the “baby boomer” generation is approaching retirement and the younger generation is not in sufficientnumbers or experienced enough to fill the gap. NEED FOR A NEW STRATEGY  Considering the above realities, there is a dire need fora completely new recruiting strategy to ensure that thatthe industry’s aggressive growth targets are not choked bythese challenges. The need of the hour is to shift fromtraditional reactive recruiting toward more proactiverecruiting, clearly understanding the various factors of the job market. This recruiting strategy must take intoaccount the following realities. 1. Aggressive growth plans. The entire oil andgas industry is poised for major growth, particularlyin the Middle East/North Africa region, Russia/CIScountries, and the Asia Pacific region. This calls foraggressive people-planning strategies for both theshort- and long term. 2. Retention. The oil and gas industry is bleeding from high attrition. In the service sector, the averageattrition rate for 2006 was 23%. There are severalproblems which crop up if attrition is not addressedproperly. 3. Recruitment costs. It is estimated that thecost for an oilfield services company to replace anemployee is USD 60,000. For an organization with25,000 employees and a 20% attrition rate, that wouldcome to the astronomical figure of USD 300 million.Recruitment costs are not always apparent but, if notcurtailed, can have a huge impact on a company’sbottom line. 4. Time factor. Attrition results in hugeexpenditures of time for management, supervisory,and administrative personnel, not to mention lostproductivity. 5. Intellectual property. Many research &development-based organizations, as well as softwareand pharmaceutical companies, are facing the seriousissue of intellectual property leaving the company along  with departing employees, which affects the wholeorganization. Of late, this has become a serious issue inthe oil and gas sector as well. 6. Impact on quality and safety. Many serviceorganizations and rig providers worry that frequentchanges in staffing and the increase in less-experienced personnel will cause safety hazards. Inaddition are the costs of training all these new peopleto mitigate safety concerns.  22 »   Society of Petroleum Engineers TABLE 1—NEW REALITIES CALL FOR NEW STRATEGIES Old RealityNew Reality Recruiting is like purchasing.Recruiting is like sales andmarketing: the organization isthe product.Recruit from traditional sources.Look at diverse pools of talentand be prepared to train anddevelop.People accept offers.People demand much more.Recruit to fill today’s vacant positions.Hunt for talent all the time,every time and plan ahead,much further ahead. ELEMENTS OF THE NEW STRATEGY  The oil and gas industry’s unique challenges beg theneed for a new approach when it comes to recruiting.Past recruiting strategies derived from old realities thatare no longer applicable. What is needed is a new strategysrcinating out of the new reality (Table 1). Specialized Recruitment Managers.   To develop asuitable strategy for the organization, a recruitmentmanager must have a good overall understanding of the industry as well as a good understanding of hisown company’s procedures, policies, products, andservices. Strong personnel-oriented managers shouldknow the right kind of people for the company and beable to develop strategies to attract them. This positionshould be an integrated part of a global and regionalHR team working to implement a strategy across regionsand countries. The position should be considered adevelopment role for high-potential managers requiring more exposure to other aspects of the business to moveforward in a career. Consolidating Recruitment Effort. This should bealigned at the global, regional, and country level toderive maximum benefit for the organization. Thisparticularly applies in the case of promoting anorganization by making the brand more visible at careerfairs and other activities. Raising the Company’s Profile.   The challenge hereis to market the organization by understanding themain things that people want out of a career thesedays, among them opportunity for development, travelopportunities, to be part of a great culture, to work witha great manager, and to make money. The money isnot necessarily the most important, but you do have toensure that your salary and benefits offer is competitive.In addition to the products, services, and opportunitiesthat an organization offers, if you can get the offerpackages right, develop your own people to be greatmanagers, create a strong culture, and market yourselvesaggressively, you can be an employer of choice. Thesedays, a company must be able to attract talented young professionals and train and develop them; attract mid-career hires from the oil and gas industry by being anemployer of choice; and attract mid-career hires fromother industries. New Talent Pools.  We need to promote our companiesboth inside and outside of the industry and in new places that have not been tapped into heavily. Thatincludes looking at the supply of rotational expatriateemployees from places such as Eastern Europe, India,and China, instead of North America and WesternEurope because those locations contain plenty of available, highly technically trained engineers and theycurrently come at a cheaper cost and often with a better work ethic. Another idea is to look at ex-military personnel in various places around the world and work to successfullyintegrate them into the organization. In general, theyare good at taking direction, have a good work ethic,and are used to traveling away from home for extendedperiods of time. Organizations also need to obtainimportant information regarding the mobility of certainnationalities. We must be certain that any new talentpools that we select are mobile. An important talent pool that most companies donot tap into very well is the “passive candidate” talentpool. This generally accounts for more than half of the labor market, which means if we can tap into it THE NEW RECRUITMENT STRATEGY SHOULD INCLUDE THE FOLLOWING ELEMENTS ✔   Specialized recruitment managers ✔   Consolidating recruitment efforts on a  global scale ✔   Raising company profile and aggressively brandbuilding ✔   Identifying new talent pools and countries whereyou can recruit massively ✔   Building  long-term relationships with universitiesand technical schools ✔   Identifying and developing good headhunters ✔   Developing strategic workforce planning ✔   Looking for new recruitment technologies ✔   Improving candidate-selection methods  Talent & Technology   » 23  we double the size of the candidates available. Passivecandidates are people that may be interested in making a move but are not aggressively promoting themselvesin the job market. If they can be reached, there is lesscompetition at the selection stage and studies show thatthey are significantly more loyal than active candidatesand also slightly better performers. How do we reachthem? Marketing, referrals, headhunters for startersbut we need to work further on developing ways toattract them. University and Technical School Relationships. Weneed to start looking at who is going to manage our fieldoperations, who is going to represent as to our clients,and, ultimately, who is going to manage the companyin the future. Graduates are raw potential talent thatcompanies can develop in-house due to their ability andproven appetite to learn quickly. They are cost-effectivelabor at the start, bring a fresh perspective, and providefuture leadership talent. All service and operating companies should be aggressively recruiting and training this talent pool now. We must also begin working on developing relationships with technical schools in countries aroundthe world. We want students in their early years of studyto know about our organization and have them want tobecome part of the company long before they graduate.Developing relations can involve attending careerfairs, conducting company or technical presentations,providing internships, awarding scholarships,conducting joint studies, donating software, andregularly making visits to ensure that faculty membersknow the company. Recruitment Resources. Most oilfield service companiescurrently rely heavily on recruitment agencies to help fillpositions. This must continue because it is a great way tofill difficult positions. We need to ensure that we identifythe best sources for talent and give them the majority of our business. We must also establish good relationships with agencies in places where talent pools exist but wherethe company may not have operations. We must also work on developing relationships with a wide network of top-notch headhunters and keep track of our successes with them. This is a good way to tap into the passivetalent pool. Workforce Planning.   To properly implement a new and more aggressive recruiting strategy, we must firstunderstand what our long-term requirements are going to be. Many of the positions that we recruit for (e.g.,engineers) will not actually contribute to the businessfor a year as their training period is extensive and theymust work alongside a supervisor. Graduates we hire this year are not actually for 2008 but for 2009. How can werecruit graduates for 2009 if we don’t have any idea of  what our needs are going to be?To predict personnel and equipment requirementsfor the long term, overall business (revenue) growthneeds to be understood first. It is important that HRpersonnel become involved in the budgeting process tohelp management develop long-term workforce plans. Recruitment Technologies. Once a candidate has beenattracted to the company, you must ensure that he caneasily apply for a position and that his informationis professionally managed. Current systems utilizing email and spreadsheets are not considered suitable for acompany with thousands of employees and an aggressivegrowth plan.Recruiting software that allows applicants to applyonline, be prescreened, and have data held online arebecoming more popular than ever. This allows applicantsto apply for as many opportunities as they like oncetheir data has been entered into the system. It allows acompany to prescreen candidates according to presetquestions, track candidate flow, and share CVs globallyfrom a database. Selection Methods. Every time an organization losesan employee it costs it an average of USD 60,000.In the case of a graduate, where a year is spenttraining, the cost can be USD 150,000. It is costlyto select the wrong candidate for the job. It is alsoimportant that all personnel who play a role in theselection process are properly trained in the art of interviewing and selection. Shifting the approach from the old reality to fit thisnew reality will be very significant for companies going forward. The success of the HR function is going todepend largely on the ability to come up with creativeand innovative solutions regarding every subfunction of HR and, in particular, recruitment. ❖ MANOJ PARMESH is Country HR Manager for Weatherford’s India Business Unit, overseeing500 plus employees across 25 nationalities.Prior to his current position, he was head of HR for VKL, an exporting company based inCochin, India, and began his career with ThejoEngineering Services in Chennai, India. Parmesh graduated with a degree in physics fromVictoria College, Palakkad, University of Calicut,Kerala, and has done post-graduate work in personnel management from NIPM in Calcuttaand in management at the Indian Institute of Management.  Introducing OnePetro, the new upstream oil and gas industry online library. OnePetro brings together specialized technicallibraries from multiple professional societies into one easy-to-use website. You can streamline your research by searching morethan 60,000 technical papers and download integrated results. Log onto OnePetro.org. It’s the next frontier in E&P.  A UNIVERSE OFKNOWLEDGE IS JUST WAITINGTO BE EXPLORED  A constellation of libraries. An astronomical number of papers. Stellar search results.
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