Chemical companies are finally starting to see the light after a decade of struggling for survival. The future is looking bright with forecasted growth rates the highest the industry has seen in more than 20 years. Billions upon billions of dollars have been pledged in support of new chemical plant projects around the world and Exxon Mobile Corporation chairman, Rex Tillerson predicts, “Global chemical demand will grow at a faster pace than GDP” (ExxonMobile).
With the chemical industry back in the game, so to speak, executives can finally start to relax and enjoy the ride, right? Wrong. A new threat is looming on the horizon with the potential to seriously jeopardize projects and the progress of the industry as a whole. The issue now keeping chemical CEOs up at night is the limited supply of skilled labor.
Availability of Talent is a Top CEO Concern
In its 17th annual global survey of CEOs, PricewaterhouseCoopers (pcw) found that the availability of key skills was one of the top five most pressing concerns of CEOs in the chemicals industry. (Other concerns were volatility in economic growth, capital markets and exchange rates, as well as energy costs.) Skilled labor is becoming increasingly difficult to find. Market drivers affecting the availability of qualified talent for chemical companies include:
- International Competition. As chemical companies continue to expand globally, they now face competition for skilled workers from across country borders. For example, Canada's Oil & Gas Industry is competing for the same workers as United States companies and they are willing to pay well to attract qualified talent. As a result, the labor shortage is no longer just regional but global as well.
- Worldwide Operations. International chemical companies often must establish operations in close proximity to their customers. This requires hiring from the local talent pool or relocating existing workers. In both scenarios, addressing cultural diversification and differences can increase the complexity of workforce management.
- Aging Workforce. In many of the world’s developed countries, retirement-age employees from all types of industries are exiting the workforce at a faster rate than qualified workers are being hired to replace them. According to Ernst & Young, both Japan and Europe have more people exiting the workforce than there are workers prepared to enter it. More specifically, by 2030, the labor gap in Europe is expected to reach 8.3 million, and by the end of this decade, countries such as Russia, Canada, South Korea and China will also have more retirees than new hires. This labor gap not only leaves companies with a lack of manpower, but older workers take with them valuable, tribal knowledge gained from years on the job. Again, according to the survey by pcw, more than 50 percent of chemical CEOs are concerned about the impact pending retirements will have on their workforce.
- Evolving Skill Sets. Despite a growing number of college-educated workers, many global chemical companies are having a difficult time finding employees with the needed skill sets. This is partly due to the rapid and continuous deployment of advanced technologies throughout the company. For example, the explosion of data and its real-time application at a plant site requires a different level of knowledge than needed by workers just a few years ago. Another factor in the labor shortage is that although educational access is growing worldwide, not enough students graduate with the skills desired by global employers.
Technology-Based Strategies for Closing the Talent Gap
The long-term success of chemical companies depends on finding effective ways to attract, retain and grow a skilled workforce. One way to do this is to implement the latest technology solutions, allowing employees to work in an environment that is familiar and comfortable. For example, Gen X and Gen Y workers have grown up in a world of instant communications, 3D graphics and open system architectures that provide access to information how and when they want. By offering a work environment featuring the latest technology systems, companies can give themselves an important edge over competitors trying to recruit the same talent.
Effectively collecting, storing and using data is another strategy for maintaining a strong workforce. To begin with, having an integrated, high-speed technology platform allows companies to process information quickly in order to match skill sets to needs. From there, putting data in the hands of employees, at the time they need it, empowers them to make informed, real-time decisions and leads to high levels of improved job satisfaction.
A third opportunity to retain and grow talent is by creating a work environment focused on collaboration and information sharing. Giving employees access to one integrated technology system ensures everyone is working from a trust single source of information. When content is changed in one location, such as the layout design of a new plant facility, it is updated throughout all other departments. Integrated processes also have significant implications for ongoing employee training and growth. When systems are integrated, maintaining updated training and compliance materials is less of a challenge.
A final benefit of a connected, collaboration environment is that it allows companies to capture and store the knowledge of long-term employees so that it can be accessed at a later date by the next generation.
The above mentioned strategies are just a few of the solutions chemical companies can use to help address the growing labor shortage. Whether it is due to competition, demographics or job skills, the demand for high-skill labor is growing faster than supply. Chemical companies must find a way to hire and retain workers if they are to take full advantage of positive market conditions and reach their maximum growth potential.
It is not an easy problem and there are no easy answers, which is why it’s no wonder chemical executives are not sleeping easy at night.