Women in energy: Oiling the wheels of talent
And perhaps rightly so.
Given the oil price headwinds in recent years, companies absolutely have to harness and select the best talent-male and female-across the industry for all types of roles, commercial, technical and administrative.
Those price headwinds may also threaten the significant strides that have been made by women in the oil and gas sector.
Scan the room at an oil and gas industry function or event today, and, despite significant strides in gender diversity, female representation on an oil and gas panel is still only an occasional phenomenon.
This example is just a microcosm of how it plays out in the oil and gas corporate world.
Finding global data on women in the energy industry (combining hydrocarbons, power and renewables etc.) is an uphill task, and more especially, data specific to the African oil and gas industry.
However, there are global trends and data points that we can infer from.
According to a 2017 report by the Boston Consulting Group (the BCG) and the World Petroleum Council (WPC), women account for about a fifth of the workforce of global oil and gas companies including national oil companies, a much smaller proportion in almost every other sector (including, Agriculture, manufacturing, health, etc.) surveyed in the report.
Perhaps unsurprisingly, the oil industry is not immune from what I call “the pyramid effect” of the corporate ladder i.e. on average, the proportion of women in the corporate workforce shrinks as you begin to move up the management ladder.
The BCG-WPC survey underpins this trajectory; the percentage of women in the oil and gas industry’s workforce drops over time and falls particularly sharply-from 25 per cent to 17 per cent- between the middle-management and senior-leadership career stages in the oil and gas industry.
There is even more interesting data out there. A recent LinkedIn analysis found that women only made up just 26.7 per cent of all oil and gas industry profiles on the site, the lowest percentage of about 12 dozen industries analysed.
One would also be hard-pressed to find any differences in the oil and gas gender balance between regions, suggesting that the global oil and gas corporate culture is so consistent that it dilutes any regional variations that might exist.
This may be good news for women in Africa’s oil and gas industry, in that Africa fares no worse than any other region, though it also fares no better.
However, in the past few years, several industry dynamics have contributed to shrinking the recruitment pool for African women professionals in the oil and gas sector.
The rapid oil price tumble that began with the shale boom, has resulted in industry-wide cost cutting measures that may have disproportionally impacted women in energy.
This would be particularly true of business support roles, particularly in administration, human resources and operations.
In reality, the level of flexibility in organizations may tend to reduce in times of crisis, as executives and managers will hunker down and may be less accommodating of certain styles of working, which is part of diversity.
African oil and gas independents and oilfield services providers, faced with sliding revenues, lower service contract values, and tighter restrictions on or the limited availability of capital and credit, rationalized workforces across the board between 2016 and 2017.
Nigeria’s growing pool of independent E&P firms who may have suffered cash-flow squeezes and have had to make cuts through the crisis, may have experienced some of this.
At the early stages, there is of course a need to persuade more women to pursue technical training and STEM subjects.
This would minimize some of the recruitment barriers that exist in the oil and gas industry.
Globally women make up about 55 per cent of those in tertiary education, but in Africa, women make up only 26 per cent of those in STEM programs, a trend that will ultimately filter through those who may end up being suitably qualified for technical roles in Africa’s oil industry.
Perhaps the stickiest issue affecting female recruitment is the industry’s poor reputation as a suitable career option for women.
At entry level, recruitment and retention levels of women into the oil and gas workforce, globally, are almost on par with that of men.
However, at middle management, senior management and executive levels, recruitment and retention become problematic.
These days, it is hard to point to a lack of ambition as the key driver. Companies may sometimes cite the lack of qualified female candidates, but perception may be a factor.
In offshore operations, the gender balance is even more skewed. Women in the oil and gas sector may be perceived as perhaps being more inflexible than men, and thus less suited for certain roles such as those requiring work on offshore rigs, or in the field.
Almost 500,000 oil and gas workers were laid off globally during the oil price downturn of the past two years, and the industry now has to begin to replace some, if not all, of this number as oil prices gradually begin a steady – albeit uncertain – climb towards $80/bbl.
Technology, specifically technological advances in Shale tell a large part of the oil supply story in the past 10 years.
It may also be certain types of technological advances that make it possible to reverse the lack of retention of women on the oil and gas management ladder.
As digitalization advances, it may be possible for more types of roles in the industry to be carried out remotely, making it easier for women who seek flexibility to sustain careers in the industry over a longer period.
The importance of visible representation cannot be overemphasized; women tend to be inspired by other women pursuing high-ranking careers in the oil industry, because of its historical dominant macho image.
The less gender diversity there is at technical and senior levels of the industry, the less other women are likely to see themselves pursuing careers in oil and gas, and consequently, firms will find it even more difficult to recruit women. The reverse is also true.
The goals of equality and inclusive development call for the greater inclusion of women in Africa’s oil and gas industry, either as retained members of the workforce (as earlier highlighted) or as entrepreneurs profiting from supply-side and supply-chain possibilities offered by the sector.
In Nigeria, where the oil and gas industry has honed local content so well, some consideration of “gender content” in the oil and gas value chain may not go amiss, if such policies are well targeted and periodically monitored.
The Nigerian Content Development Act 2010 defines the minimum level of Nigerian content required for each sub sector of the oil and gas industry, thus providing a number of opportunities for local SMEs – implicitly including those owned by women – to create linkages to industries where their participation has been historically insignificant.
There is a real economic and business case for encouraging the recruitment of more women into the oil and gas sector, and more so at senior levels of management.
Some may call it PR, but when in late April 2018, Saudi Aramco, the world’s top oil company, appointed five new members to its board including a female executive, a milestone for that country, there was widespread speculation that the appointment was intended to herald the imminent plans by the government to float 5 per cent of Aramco in an IPO by early2019.
Aramco’s appointment of Lynn Laverty Elsenhans, the former chairwoman, president and CEO of U.S. oil refiner Sunoco, who also had previous high-ranking roles at Baker Hughes and Shell, will not be lost on diversity-sensitive investors.
Regardless, Elsenhans’ superb industry credentials leave us in no doubt about her well-deserved qualification for the role.
But it also speaks to the recognition that perhaps, just perhaps, diversity is a key driver of value at the highest levels of the oil and gas corporate world.
Corporates may sometimes miss out on the rich diversity of views, higher quality of teamwork and soft skills needed for deployment in areas such as problem-solving and commercial negotiation, all benefits of a more gender-balanced and diverse workforce.
Today’s global energy sector is already faced with a major talent crunch – especially in STEM fields – and this will only worsen as the baby boomer generation (those born between 1946 and 1964) who make up a significant proportion of the current global oil and gas workforce begin to retire in the next decade or so.
Several studies have been published in recent years about the correlation between gender diversity and financial performance of firms.
For some, the link may be tenuous, nevertheless, diversity more broadly defined should be an even bigger goal for the global oil and gas industry.
Diversity ultimately promotes differences in the way that we see and perceive the world, the way we solve problems and make predictions (often referred to as ‘cognitive diversity’).
Energy companies, who want true diversity, should look at recruitment of staff from different backgrounds who do not all think alike.
An oil and gas company today could hire 50 per cent women, but if they are clones of existing management, in terms of how they think, then in reality that is diversity only on paper.
Women are untapped reserves, in the diverse pool of talent out there.
Akinkugbe-Filani is the Head, Energy and Natural Resources, FBNQuest Merchant Bank