*How women can compete favourably in the oil and gas industry…Report
-By Aisha Sambo
The global oil and gas industry may be inclined towards recruitment of more women in the near future, if the report of McKinsey Research is anything to go by.
The report stated that companies that have a significant share of female leaders outperform their peers. It is believed that companies in the oil and gas (O&G) industry should carefully consider this insight, given that the industry has struggled to attract, retain, and promote women. Addressing this problem appears imperative as the sector faces an aging workforce as well as demand for new kinds of skills in areas such as advanced analytics, machine learning, and robotics.
McKinsey noted that about a decade ago, oil and gas was the 14th most attractive employer among engineering and IT students; now it is 35th. Given the need for talent, it is critical for the O&G industry to deepen and diversify its pool. One way to do that is to bring in and retain more talented women. There is a long way to go. Right now, women comprise only 15 per cent of the O&G workforce, the report explained
To understand the status of women in the O&G industry, McKinsey analyzed data from 250 companies. It also evaluated individual O&G company data compiled through McKinsey’s Women in the Workplace 2018, which evaluates the attraction, retention, and attrition rates of women in corporate America.
It was found out that at a time when the need for new types of talent is great and the competition for it intense, O&G companies are failing to retain many of the comparatively few women they attract in the first place. Half of the 250 O&G companies surveyed don’t have a single woman in top management; another third have only one.
This low female participation is said to have real consequences. McKinsey’s previous research, Diversity Matters, found that companies in the top quartile for women leaders are 15 per cent more likely to have above–industry average financial returns. While the research is careful to note that no causal connection can be proved, it observes that the correlation suggests “that when companies commit themselves to diverse leadership, they are more successful.” One O&G executive applied that thought to the ground level: “This is a business decision. By 2025, we are going to be a millennial and Generation Z workforce [that is] inclusive and diverse. If your business is not, you are going to get bottom-of-the-barrel workers.”
The report also stated that the problem of untapped female talent is not unique to O&G, but it is more acute. When compared with 18 other industries, O&G was last in female participation at entry level and second to last in the C-suite. When compared with other science, technology, engineering, and mathematics (STEM) industries, it ranked last.
Only a third of entry-level employees in the O&G industry are female, compared with 41 per cent across other STEM industries and 48 per cent for the corporate sector as a whole. Certainly, one reason is structural. Women account for only a small share of graduates in relevant majors, such as mechanical engineering (13.9 per cent) and petroleum engineering (17.1 per cent).
That likely affects the number who take up entry-level positions. In other STEM fields, women account for 35 per cent of graduates (and 57 per cent of all college graduates). But that difference at the beginning doesn’t explain why, at every subsequent stage of the O&G pipeline, the percentage of women declines, and at faster rates than in other industries. The report indicated that there are two main hurdles for women in O&G—getting the first promotion into management and then getting promoted at the senior vice-president. While women in the Workplace research shows that getting the first promotion is a challenge for women in many industries, it is worse in O&G. Female participation in O&G declined 31 per cent from entry-level roles to manager roles, compared with 22 percent in other STEM industries and 20 per cent in the overall corporate workforce. Why do so many women fall at the first hurdle? The reasons will vary depending on the company and across O&G subsectors but we believe that one factor relates to the common expectation that it is necessary to accept international or remote assignments to get promoted. That can be challenging for those starting or raising young families at this point in their careers, the report added.