The energy industry is undergoing a fundamental transition, catapulted by unprecedented technological advancements, increasing stakeholder and regulatory demands and the push for Net Zero. While this change is fueling massive infrastructure investments and creating new operational service offerings, it is putting a strain on the capabilities of the current workforce and widening a skills gap that’s already reaching epic proportions.

According to an international tech consulting and engineering company’s global survey of energy and utility leaders, 83% had under-invested in the technical skills of their employees. Meanwhile, 39% reported a skills shortage as a top threat. When looking specifically at oil and gas, studies show that by 2025, the industry will experience a shortage of up to 40,000 competent workers, and up to 85 million unfilled jobs due to skill shortages. In an industry where skills are an enabler of operational execution, the lingering skills gap is now creating a barrier to innovation and costing the industry billions. Moreover, the implications extend beyond profitability; they encompass workplace safety, project efficiency and workforce satisfaction.

There is a way forward, but a skills-based operational strategy must play a central role in any reskilling, upskilling or training program.

What is a skills-based strategy?

A skills-based operational strategy is the business process of identifying critical skills, assessing organizational capability and developing a workforce to meet current and future demands. This begins with developing a standardized framework of existing customer requirements, business processes, regulatory compliance and critical job roles. The framework then provides transparency and alignment across the organization and serves as a guidepost for current and future initiatives. By identifying existing skills within the workforce and evaluating future needs based on industry trends, companies can pinpoint areas where skills shortages are most acute and tailor their strategies to address specific challenges effectively.

Traditionally, organizations have managed this data through paper files, Excel spreadsheets and HR systems — all of which struggle to handle the complexities of the operating environment, making it difficult for HR leaders to quickly access reliable and accurate records. However, those prioritizing efficiency and effectiveness are digitizing this data by leveraging skills management platforms designed specifically for the energy sector’s unique and complex operating environments. Skills management platforms also guide strategic decision-making by producing validated skill insights on demand, guaranteeing that employees have the skills to operate safely and effectively.

Identify skills gaps

The energy sector’s widening skills gap is impacting organizational capability and performance on a monumental scale — a problem that is only going to get worse as the industry evolves and new technologies are introduced. Skills development, therefore, plays an integral role in gaining critical insights into an organization’s skills taxonomy, helping to identify existing skills and those needed for operational excellence.

The data not only informs a company’s hiring and employment practices but also directs strategic training programs. With access to precise, validated skills data, executives and managers can pinpoint gaps and establish clear pathways for employees on their reskilling and upskilling journey — without wasting resources and time on misdirected training programs.

According to PwC, upskilling is not just about providing access to training. It identifies the most valuable skills for the future, finds and supports the individuals excelling in their roles and creates an optimal employee experience. Skills management, therefore, provides a roadmap for both the employees and the company, ensuring all training programs and hiring practices are implemented holistically across the organization and align with current and future demands.

Ensure operational safety

There is no room for error in operating environments like those within the energy sector. A single mistake can lead to damaging costs and lives lost. This reality is why it is so critical that employees not only have the knowledge, training and skills required to perform but are proficient in their roles and truly capable of doing the job. This is where skills management becomes invaluable, offering granular insight into each employee’s skills, compliance and on-the-job training. By integrating this information with risk assessment and scheduling platforms, organizations ensure the most qualified team member is deployed to the job site, thereby, mitigating health risks and avoiding safety hazards.

Master efficiency

The energy sector’s path toward Net Zero will be marked by efficiency, both for the technology that powers the industry and the workforce that operates it. Skills management’s data-driven approach is critical to enabling efficiency by arming decision-makers with key insights to deploy the correct resources for every project the very first time, every time. No matter the dispatch scenario, but especially in crises, deploying the right person ensures a faster and more reliable service delivery, ultimately reducing unnecessary costs and curbing downtime.

Organizations navigating the current and future states of the business of energy will be faced with many challenges, including the ongoing transformation of technologies and expectations, aging and retiring workforces and increasing pressure to perform from society and governments alike. Leading the charge with a skills-based operational strategy will be vital to ensuring workforces remain skilled and capable in the coming years and decades. By utilizing skills data as a guide, organizations position themselves for efficient, compliant and safe operations, forging a path towards growth and resilience.