Strategy & Management

Mastering the Demographic Time Bomb

The Essential Guide for Process Industry Companies to Talent Sustainability

26.11.2014 -

Organizations are reliant on their ability to embrace expertise and achieve competitive differentiation. However, the process industries are sitting on a 'demographic time bomb'. Veterans with comprehensive knowledge and vital skills either in engineering, project planning, scheduling, or operations management are soon to disappear from the workplace through retirement. So, what steps can companies take to mitigate skills shortages and help sustain their long-term future?

It is time for businesses to go back to basics and adopt the skills lifecycle methodology. This is an integrated system of T.A.L.E.N.T. (Training, Academia, Legacy, Evaluation, Networking, Tools), whereby companies can implement best practice to mitigate the loss of important skills and ensure the talent pipeline remains robust for the long-term. While some organizations are good at certain aspects of human resourcing, there is still disconnection between all the vital areas of the business. This is not a linear process - it is an on-going dynamic practice that helps improve operational efficiencies and maximize profitability.


In order to address the skills shortage, several companies are taking greater measures to conduct their own in-house training and graduate programs. For example, MOL PIMS Academy makes it possible for young graduates to quickly acquire the key technical competences and practical experience necessary to become effective supply chain professionals in the petroleum industry.

The cost of training new or existing engineering talent is often a point of contention. On the one hand, this requires time and investment, which comes with high employer expectations for immediate business returns. On the other hand, the loss of expertise due to the inability to develop skills has far wider implications. Companies need to keep pace with new techniques, product upgrades to systems and demonstrate market understanding in order to meet customer expectations. Training is a crucial part of nurturing and retaining talent. This needs to be an on-going process - if you don't train, there's no gain.


Developing close links between industry and academia is a vital pipeline to 'turning on the talent tap'. Many companies have successfully sponsored graduate programs or initiatives to encourage engineering talent. For example, Total created its own university in 2005 followed by an education department in 2010. In the United Arab Emirates, where it is a requirement to employ 75% local nationals by 2014, the company created the Total Academy and the first group of students graduated in 2012. AspenTech, a provider of optimization software, recently established the AspenTech Academy, a corporate advisory group of world-renowned university professors.

Helping university professors educate students to better understand engineering technology and gain insights to overall operational challenges and market trends will make the transition from academia to industry much easier for graduates. If companies take the lead to work with academia more closely then the next generation of engineers will be prepared for key roles and have a head-start when entering the workplace.


A crucial strategy for process industry companies is to establish effective ways of capturing and retaining knowledge with the ability to pass it on to the next generation. According to international trade body the Society of Petroleum Engineers, the average age of a petroleum worker is 51. Nearly 60% are 45 or older. This represents a peak in the profile of existing workers and indicates that approximately 40% of the workforce will be lost over the next decade. In the E&C market, larger companies are growing either organically or via acquisition. The combination of experienced engineers retiring and younger talent being poached means the stronger are becoming stronger - the weaker are becoming weaker.

Employers continually drive organizational performance to deliver high return on investment, but it is remarkable how little is done to legislate for the loss of expertise due these retiring personnel. Handing down skills efficiently allows younger engineers to learn quickly and avoids 'the wisdom walking out of the door'. It's time to legislate for a better system of talent legacy. Therefore, make plans to retain the knowledge, secure the expertise and maximize business growth potential.


Engineering excellence is a crucial business differentiator for many small to medium sized companies. Large operators are under enormous pressure today to meet tighter project timetables. However, the process of evaluating staff performance and setting clear goals is often an under estimated discipline. Sometimes the practice of establishing clearly defining targets and reviewing career goals can be conducted with little attention in a highly pressured, time constrained environment. Evaluation is a two-way process. It is an opportunity for the employer to assess performance and acknowledge added-value achievements and for the employee to express viewpoints and benchmark their skills against the industry standards to identify areas for improvement. Evaluation also builds loyalty. Implementing comprehensive programs across the main areas of the business and assigning key business performance indicators helps to assess results. Through transparent metrics and realistic goal setting, both employers and employees can set clear expectations to best manage career aspirations. Companies need to constantly measure workforce performance and analyze measurements to keep talent strategies aligned to business goals and deliver results.


Many companies succeed in business by building strong networks with industry leaders and professional institutions. Greater interaction brings greater benefits. Both individuals and employers will gain at all career stages. Ultimately, it is the proactive engagement of companies with eminent leaders, government and industry bodies that will help to nurture and reward chemical engineers across oil and gas, chemicals, manufacturing, engineering, construction and much more. Industry bodies, such as IChemE for example, build and sustain an active international professional community, united by a commitment to qualifications and standards that foster engineering excellence.


Investment in technology is a strategic basis for harnessing talent and building expertise in key disciplines. Essentially, providing staff with the appropriate tools will enable individuals to demonstrate their skills and efficiently meet the tasks aligned to the company goals.

Today's generation of engineers embrace technology having witnessed a world where the use of software, mobile devices and cloud-based solutions are prevalent in all aspects of life. The use of intuitive optimization software, for example, helps to improve decision-making and provides younger engineers with easy-to-use functionality including, state-of-the art visual analysis and powerful process design to reduce energy usage, minimize capital operating costs and improve product yield.


There is a clear need for a sustained approach to capturing, nurturing and retaining knowledge for the long-term future of the process industries. T.A.L.E.N.T. is a model that is scalable and can be used as a guide to address skills issues that exist in the industry today. This is not a linear journey - it is an on-going dynamic process that helps improve operational efficiencies and maximize profitability.

If we are to mitigate a skills shortfall across the process industries, then we need to apply best practice to the process of talent sustainability - from developing skills that will model our plants, through to operational management of highly technical and complex projects. The next generation of talented engineers will build our communities, develop infrastructure, design and construct new roads, inspire creativity in chemicals and manage our manufacturing industries.

Executing an integrated T.A.L.E.N.T. model and aligning it with the overall business strategy will allow process industry businesses to reap the rewards of enhanced loyalty and productivity, establishing a clear vision for transforming the way companies optimize their biggest asset - people.


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