Far-reaching changes are taking place in energy companies.
These changes will affect HR departments.
Solutions are being sought for a wide range of management and organizational issues. But above all in talent management.
1. Access to talent within the organization (permanent contract, part-time, external consultants)
While it is true that employees in an organization must be generally flexible and do the work that is assigned to them, to do that work to the highest quality standard, there are other considerations as well. The most common age bracket where employees are best able and willing to learn new skills is when they are 20 to 30 years old. Once you have reached 35 years of age, you are far less likely to make very significant changes in your own career trajectory. You are more likely to stick to the same, and probably have commitments to family and security becomes a major issue. You will also have sunk investments in your own career, as you have dedicated a significant part of your life to work in a specific occupation where you have gained your expertise, so you are less likely to want to move to another city for your company, and learn new skills that are related to artificial intelligence and apply these skills in new ways to what is happening in the energy world. This obviously prevents HR to maximize your full potential, given the fact that you have become fairly inflexible by the time you have honed your skills.
This is precisely the time when your skills have become most valuable to the energy business, and you have learned a technical skill set and bring with it the business acumen that makes you an interesting prospect for new career assignments. To pair these two considerations, on the one hand the fact that you have these skills and they are valued by your employer, and on the other hand the fact that you are becoming progressively more inflexible, makes HR much more difficult. But it becomes even more difficult because recent developments in computation and digitalization require employees to be more flexible, and to learn new skills that are related to the digital world, and apply these new skills in the energy world. As time progresses, the need to develop new strategies to cope with this shift in the working world becomes ever more paramount.
One reasonable option would be to hire external consultants that have worked in your company and worked on a few projects, because HR has some idea what they are good at and how well the actually perform in your energy business.
2. Talent acquisition
I believe energy corporations have to develop new strategies how they will recruit talent, and there are essentially three strategies to do that:
Referral is one option and it basically means that someone else is recommending your company to the person you may wish to hire. Referral is a powerful tool but it depends on the person recommending your energy business, although it does have its limits because it is fairly difficult to reach a wide network of persons your energy business may wish to hire. In addition, it depends on your reputation in your specific industry, and your reputation can easily be bruised.
Self-referral also works very well, for example when you are recommending your company to others in the industry and that you have a good working relationship with your colleagues.
Headhunters by comparison are very strategic in their approach, and they are able to track down suitable candidates. With digitalization and computation, they will play a major role in the recruitment market of the future, as they are able to leverage the artificial intelligence to get to the right candidates. The major obstacle is that they can be quite expensive, and your energy business is more likely to hire candidates that have gained a significant amount of work experience, and have become experts at what they do, possessing the necessary business acumen to succeed.
Online recruitment will be the fastest growing field when it comes to HR recruitment strategies and it has largely replaced other approaches to acquire new talent. Many tools are available to the energy business in order to attract new talent, including Facebook, YouTube, your blog online, LinkedIn and Xing in German-speaking countries. If you choose online recruitment, it is very important that your energy business appears credible and authentic to potential hires.
3. Reduce turnover, increase retention and raise effectiveness by building project teams
In terms of changing the internal structure of the organization in terms of who does what, HR becomes increasingly important. Digitalization and computation and the rise of artificial intelligence mean that HR has to learn how to motivate people to constantly readapt to a changing world, and to become part of changing project teams all the time that require different skill sets. That maybe an easy feat for a young person just out of university, but it may be hard to do for someone who has worked 20 years in bookkeeping. Project teams are likely to be the way of the future, because they address some fundamental issues in the working world.
Employee’s no longer do one job their whole life, and they switch quite frequently between job roles where they are needed at the time. They may have a certain skill set that is needed at one particular point in time, for example one person might have the ability to speak a foreign language, he can use these skills in a project where it is important to build bridges to another company. I also believe that salesmen in the energy industry will have to learn skills in online marketing in order to thrive in the energy world of the future, and to drive sales revenue.
4. Generational trends (Generation X, Generation Y, Generation Z)
Generational trends play an important part where HR strategy should be headed and I base my understanding on research conducted by Neil Howe and William Strauss whose work has become known as the Four Turnings. Back in 2007 they have written an interesting, and highly introspective article on “The Next 20 Years: How Customer and Workforce Attitudes will Evolve“.
Their argument boils down to that a generational cycle takes four generations, each one follows the other like seasons. The baby boomers were the prophet generation; which was an exploratory generation, they were followed by the Nomads. The Nomads are Generation X, the generation that wanted to do its own thing. They are being followed by Generation Y, the Millennials, who are acting as a cohesive entity with their digital devices and deloy new tools to communicate. They are being followed by Generation Z, who will embed these new tools in work life and bring these changes in artificial intelligence, computization and digitalization to fruition.
Neil Howe and William Strauss obviously understand that there are great differences between cultures in the West, but history shows that these generational cycles repeat. To give just one example out of many, the Presbyterian immigrants who have landed on the eastern shores of the United States, were in effect the baby boomers of their time. They were prophets attempting to change the culture of the land, whereas the Millennials will change the physical infrastructure that forms the basis of civic life. It is only a question of time until Millennials change everyone’s work life. And let us not forget that Millennials are now the largest generational cohort in the United States, bigger than Baby Boomers.
We also should not forget that in many European countries family obligations come before job obligations, which is particularly true in Southern Europe, and is actually quite similar to the way that family relations are treated as superior to job obligations in Arabic culture.
5. Preferences (you can’t have it all) – or simply put you cannot have a great career and have a lot of free time as well
Employees need to come to the realization that work-life balance is not really achievable if you really want to succeed. You can’t just have a 40-hour work week and expect to have a great career. You can have a work-life balance, but with the side effect of not progressing in your professional development. It’s an either/or question. HR should find ways to accommodate employees who choose to have a work-life balance as well as talent who want to move up the career ladder. Digitization offers a multitude of opportunities to an ever-shrinking group of employees who are up to the demands of the modern job market.
6. Early career development (apprentices, organizational talent)
For a lot of energy businesses it makes a lot of sense to bind employees early on to the company. We are already seeing that HR has trouble recruiting young apprentices to join their company and learn a trade, it will get even more difficult in the future as more and more people opt out of worklife, or simply want to have a work-life-balance. It will be just as difficult to hire willing and capable managerial talent able to lead energy businesses. In fact, I expect a significant shift in work ethics, to the detriment of energy businesses, once Millennials have reached the peak of their career.
In addition, more should be done to retain interns that have worked in your energy business, because they have some familiarity with the business culture, have done a few bits and pieces in your energy company, and know the people they will work with.
7. Artificial intelligence is likely to replace many roles in HR departments
Google’s Deep Mind is one of the most advanced computer systems ever developed. We see other programs such as AlphaGo, which had been deployed to compete against the world’s best chess players. Let us keep in mind that a computer program such as Google’s DeepMind may be better on average than an HR employee in making important decisions, which makes them worthwhile to use.
Regarding this concept, I refer to Yuval Noah Harari (2016) in an article published by the Financial Times titled “Yuval Noah Harari on big data, Google and the end of free will“. It is conceivable that Google’s DeepMind, or similar programs, will progress so far that it can outperform HR employees in selecting staff. In addition, Google’s DeepMind would not be biased, although many HR employees currently say it is, because computers are by definition not driven by emotions, and are perfectly logical actors, within their arc of operations. It is likely that many functions HR currently performs will eventually be automated, leaving the tasks to perform that aim to keep up productivity and efficiency in the organization. In effect, an algorithm will perform a majority of HR decisions, including very particular HR functions such as hire and fire.
8. Losing the human touch in HR
It is entirely possible that the majority of HR roles currently done by HR personnel will be taken over by artificial intelligence programs, so that eventually employees will interact with computer systems regarding internal issues such as pay, travel expenses, sickness days, vacation, hiring, redundancies and organizational changes among others. This would likely affect the overall loyalty felt by employees to the organization, mainly because the human touch goes missing and employees are seeing themselves severed from the organization. This may be the reason why HR is actually needed, to provide a critical control function for the energy business, and to see what is going on at a psychological level within the energy business.
9. The difficulties to recruit new talent in the waste industry
The waste industry in particular have huge problems to recruit new talent in technical roles, which has partly to do with the fact that there is a wide variety of jobs available outside of the waste industry, where young people can find equally well-paid positions, but that are cleaner and better paid, at least that is the perception. It will take a lot more online marketing to promote waste-to-energy as a career choice. I believe this problem can be solved by binding people to the company.
10. What we can do next:
To bring it to a close: Energy businesses that find themselves unable to employ HR analytics and artificial intelligence in their organization more effectively, may find it difficult to attract high-caliber employees over time. This is so because other companies will employ AI. In addition to that, incentive structures vary from company to company and may not reflect actual dynamics in the market place. This could mean that it becomes harder to find employees, due to a lack of specific incentives to support the development of these employees and partly as a result of inflexible regulations that hinder employees to apply themselves to their maximum ability.
This relates to the fact that old company values can be incompatible with the new work world. So it requires long-term HR planning with a clear view and an understanding of what artificial intelligence is and what it can do for your business. It means that organizations that do not adapt to the new work world will find it increasingly difficult to adjust as the new work world requires adaptability, resilience, and creative input. HR will find itself at the cutting edge of corporate development.
In order to reach beyond this goal, the most successful HR departments are able to harness the full potential of their employees, where expert engineers and project managers form project teams that can flexibly adapt to a changing work environment.
Harari Y. N. (2016), ‘Yuval Noah Harari on big data, Google and the end of free will’, Financial Times, 26 August, Available at: ttps://www.ft.com/content/50bb4830-6a4c-11e6-ae5b-a7cc5dd5a28c, (Accessed 14 05 2020).
Many thanks for the shared interest in the energy world!