Amid the global economic uncertainty of recent years, many energy companies have sought to ‘cut costs at all costs’, leading in some cases to arbitrary staff reductions with unintended consequences. Poorly evaluated and planned staff reductions can do more harm than good, hampering productivity, undermining safety and lowering profitability. These cuts are often not sustainable; companies determined to cut costs at all costs frequently end up paying a price that exceeds the apparent cost savings.
It is time for all areas of the oil and gas industry, from upstream to downstream, to get smarter about managing staffing levels. By employing a highly data driven staffing assessment approach within the context of the business process, plants/facilities can move beyond simple quantitative formulas and across the board cuts.
This approach is called workforce optimisation consulting.
An optimum workforce is a staffing level and organisation that has achieved consistently excellent performance that is consistent with the company’s business drivers and environment. All too often companies consider only direct employees; but workforce optimisation is generally not accomplished without considering both direct and contract employees, because many companies reduce the number of direct employees and replace them with an equal or greater number of contract employees.
Also, it is important to note that the concept of optimisation does not always mean a simple reduction in staff; the solution may involve adding staff members to certain department areas. The optimisation process helps operators determine the staffing level and organisational structure that will sustainably maximise workforce efficiency and effectiveness.
Workforce optimisation takes into account all critical factors needed to achieve optimal staffing levels based on defined objectives. The business drivers considered include:
- Plant safety.
- Environmental responsibilities.
- Workforce motivation.
- Other client defined objectives.
There is no single perfect organisation structure; many models are successful. Only after a thorough evaluation of these factors are recommendations to reduce or increase staffing levels, and to modify organisation structure, provided.
Targets that impact staffing
For plant operators and management looking to cut costs, resisting the temptation to arbitrarily and instantly cut staff is just the start. They must determine what drives a business and develop an optimised business structure to reach set goals and objectives. Doing this requires time and discipline using a documented schedule and plan. By adopting a methodology that measures current work processes and workloads and considers future workloads, plants and refineries can optimise both staffing levels and work processes over time. Workforce optimisation consulting offers a time tiered schedule that drives successful implementation of the changes.
When it comes to recruitment, the challenge lies in finding and keeping highly qualified professionals, especially when a company is undergoing structural and organisational changes. The ‘recruiting gap’ moves up and down, but there is always a gap when looking for the right candidates. However, in order to recruit the right people for a company, managers must first know what skills are required to achieve optimal business performance with the staffing levels that are most effective for each department. Workforce optimisation consulting can help determine the skills required and determine the numbers managers should recruit, in both the short and long term.
Far from following preset formulas, workforce optimisation consulting delivers a new way of thinking. Going beyond simple quantitative formulas and across the board cuts, the data driven and experience based approach takes all critical factors into account and results in a custom recommendation for reaching optimal staffing levels (which can mean staff reductions and/or staff additions) based on specified goals, objectives and social standards.
As part of the process, the current roles and responsibilities of existing job functions and positions within the company should be examined. Opportunities to eliminate unnecessary positions, consolidate job functions and increase the span of control can be highlighted. Where missing or limited work processes are identified, recommendations for appropriate position additions and/or organisational changes can be provided. The goal is to determine the appropriate roles and responsibilities needed to carry out the work of a streamlined business process.
Written by Bill Glasscock, Solomon Associates, USA. The full article can be found in the April 2013 issue of Hydrocarbon Engineering.
This is the second part of Hydrocarbon Engineering's Employment and Recruitment series.
Read the article online at: https://www.hydrocarbonengineering.com/special-reports/04042013/recruitment_employment_part_2/