Pay equity in the energy industry
In this episode, Mercer’s Global Energy Leader, Milan Taylor interviews Lea Lonsted, Mercer’s pay equity leader for Europe and the UK about the DEI and pay equity…
DEI: Fuelling your competitive advantage
In the era of Energy Transition, more jobs are shifting towards Artificial Intelligence (AI) and digital technology which leads to new talent requirements. Advanced technology reduces dangerous environmental impacts and increases employees’ physical and psychological safety, which is leading to the attraction of different talent to the industry. Even though the energy sector has been making a concerted effort to address diversity, equity and inclusion (DEI), the industry lags behind in building a workplace that reflects these values. Gender and racial disparities in the energy industry have been observed around the globe. As the energy transition continues and the demand for a low-carbon economy grows, embedding DEI into energy firms’ organisational models will determine the future shape of the traditional-, as well as the sustainable-, power chain.
Talent shortages in the transition to greener energy
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Artificial IntelligenceAI and other advanced technology help to automate unattractive hands-on work but also require new skills. The industry is in need of new young professionals yet 44% of Generation Y and 62% of Generation Z say a career in oil and gas is unappealing.
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Balanced offshoringDoing more with fewer resources and gaining flexibility and innovation through offshore outsourcing has become increasingly important for companies that compete worldwide.
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Reconstruction of workThe new, agile approach towards how the Energy sector operates will determine the future of the business. Modern work design boosts agility, efficiency, productivity, attraction and retention - the right work operating system, combined with clarity on current and future skills needed, and offering flexibility can make a significant difference. Creating this speed and agility in a very rapidly changing environment is a must for the sector.
In the transition to a low-carbon economy, the energy sector needs to identify professionals with transferrable skills outside the industry and integrate talent with a wider range of skills.
Psychological safety
- Energy sector workers face challenges to mental health and well-being. Stigma and in some cases, a lack of psychological safety, remain a pervasive barrier to workers seeking and accessing support.
- More than one in five (22%) members working in electricity supply feel overwhelmed or highly stressed most of the time or every day.
- 40% of onshore and offshore remote rotational shift workers experienced suicidal thoughts while on duty, with nearly one-third meeting the benchmark for clinical depression while on rotation. Offshore workers are up to 15 times more likely to die by suicide than their counterparts onshore.
- Fatigue, stress and mental ill-health are affecting energy employees and impeding individuals’ ability to make sound operational decisions and potentially increasing the risk of accidents.
Representation and inclusion
The Energy sector is one of the least gender diverse. Women make up 27% of the organisational workforce in the energy industry, with only 24% at the senior manager level.
Women are statistically less satisfied with career development opportunities and the working environment.
In light of the talent scarcity crisis, bridging gender and other historically marginalised groups’ disparities will be key to a successful energy sector transition and post-COVID recovery.
The chart shows female vs male representation in the energy sector with females making up just 27% of the total workforce. The highest roles being in professional roles (32%) followed management and senior mangers (24%), then Directors at 22% and support staff at 21% female representation. 100% of Executives in the sector are made up of men.
Case study
The Energy firm wanted to create an innovative and inclusive employee value proposition
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Client challenge
Mercer helped to build a picture of the current state through workforce analysis and employee listening, inspiring their leaders through innovative “as-is” and “to-be” workshops, and identifying concrete, priority actions to build a more inclusive and attractive employee value proposition in an action plan. -
Solution
As an outcome, the company has introduced attractive and inclusive benefits (incl. family flex, real-time recognition, additional time off); revisited talent management processes (refreshed competencies; L&D programmes; updated HRIS), and increased transparency – refreshed intranet; voluntarily sharing gender pay gap.
Impact
- Leaders were engaged after being included throughout the process and are driving the agenda authentically.
- Employee engagement scores skyrocketed in the months that followed and the firm sits above the benchmark in many employee listening metrics.
Why Prioritise DEI?
What you should focus on
Progressive organisations embrace today’s challenges, seeing them as opportunities to prepare for a better tomorrow. Creating an environment where employees feel psychologically safe, with an inclusive culture and strong leadership is pivotal for the energy sector.
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To address representation and inclusionMercer will help you analyse your hiring, promotion and turnover data by demographic group to create a talent flow map and identify the most impactful levers for taking action through Mercer’s proprietary ILM mapping. Mercer will also review and improve your 3 P‘s (policies, processes and programmes) to make sure you are meeting the needs of all of your employees and challenging areas where bias may fall in.
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To improve psychological safety and cultureMercer will help you to listen e.g. Digital Focus Groups or Employee Surveys to identify the pain points, concerns and challenges of employees and take action to improve the culture, from inclusive leadership, through to governance and accountability.
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To fill talent gapsMercer will help you ensure career equity with a fair career framework and talent management process including reskilling, upskilling, and cross-skilling your employees, widening your talent pool and de-biasing performance management to provide opportunities for advancement and compensation, helping to support pay transparency conversations and help you to elevate your EVP.
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Measuring pay equityA tangible way of determining how a company values its employees. Mercer can conduct Pay Equity Analysis as a part of an annual compensation review process to limit legal risk, proactively prepare disclosure, support your pay transparency needs and accelerate workforce diversity.
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To ensure an equitable employee experienceMercer can also assess your health and wellbeing benefits through a DEI lens to identify gaps and opportunities for inclusive benefits.
To learn more contact:
Lucy Brown, DEI Senior Consultant
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