An energy revolution is underway. The shift has been discussed for decades, but the energy transition is finally picking up its pace, catalysed by technological innovations and inventions that have lowered the cost of decarbonization. Yet, as new technology is only as useful as the people who operate it, one of the biggest foundations of this change will be a people transition.
The role of Human Resource (HR) leaders will be crucial to this end. HR teams will need to step up their practices to become advisors and strategic partners for leadership teams as organisations adapt to a changing environment and equip themselves for the energy transition. Day 3 of the recent International Conference on Learning & Development (ICLAD) 2021 brought together three HR leaders to discuss the crucial role of human resource management in the energy transition and workforce.
Bridging the Cultural Gap
Energy companies are often seen as the enemy of the sustainable energy transition. In reality, these companies are in a position to tap into existing strengths and become prime supporters of the switch to sustainable energy. Given the region’s ever-increasing demand for energy as economies develop, energy companies cannot reduce their output in favour of reduced emissions. Instead, they need to diversify investment portfolios and revenue streams to more environmentally friendly alternatives.
For the energy sector, venturing into business alternatives requires a range of skills, including the ability to think holistically when identifying sustainable solutions. However, the workforce of traditional oil and gas companies have historically received very structured education, and for the purposes of safety and smooth operations, non-compliance to processes and procedures was not tolerated. At Petronas, HR was critical to bridging this gap in culture.
The traditionally transactional roles of HR will now need to encompass the people-management and employee-development skills
According to Farehana Hanapiah, Senior Vice President of Group Human Resource Management of Petronas, their approach was to identify and group selected employees who demonstrated higher levels of agile and flexible thinking. This group was incubated and encouraged to further develop their creativity in looking for out-of-the-box solutions that could help drive the company’s sustainability goals. Once new ideas and solutions are created, however, energy companies face a new hurdle – lack of expertise to build and scale these opportunities into new ventures.
HR’s role in tackling these issues is in determining where talent gaps are and helping the company formulate plans for next steps – whether to develop those missing skills internally or to hire external talent. When bringing in new talent to bridge knowledge gaps, Farehana says, “HR will need to determine the implications on internal culture and shared values.”
Accomplishing these new goals is both exciting and challenging but requires a holistic cultural shift as HR themselves needs to restructure their mindset. The traditionally transactional roles of HR will now need to encompass the people-management and employee-development skills needed for the success of the company’s sustainability journey.
The Importance of Human Capital in the Energy Transition
For the workforce of the fossil fuel industry, the transition to sustainable sources of energy may not seem like an equitable move. Ultimately, the benefits unlocked through the green agenda far outweigh the negatives. However, as Wahizan bin Abd Rahman, Chief People Officer of Group Human Resource at Tenaga Nasional Berhad (TNB) says, business leaders are responsible for ensuring that affected employees whose jobs are affected also reap the benefits of the energy transition. “Those in the coal segment can’t help but feel anxious and uncertain about their role,” he explains, “and we must make them feel as excited about the transformation as we are.”
Business leaders are responsible for ensuring that affected employees whose jobs are affected also reap the benefits of the energy transition
HR needs to strategise ways to balance operational excellence of the current workforce and at the same time, build new capabilities to meet the demand of the transition. “In upskilling a workforce, whether through talent and knowledge sharing, competency building, or policy design,” argues Wahizan, “people are key to make or break the energy transition”. He believes HR’s role in facilitating these changes makes them the delta contributors of the transition.
Wisnoe Satrijono, Executive VP of Human Capital Strategy at Perusahaan Listrik Negara (PLN) Indonesia, adds that emerging technologies will make some jobs obsolete, such as on-ground meter readers whose roles are being taken over by smart meters. However, he stresses, the industry needs to work on empowering these workers with new knowledge to transition them into new roles. Reskilling and upskilling workers ensures that the energy industry continues to have the human capital needed for a successful energy transition, while taking care of and ensuring the peace-of-mind of loyal workers.
The Role of Digitalisation and Lifelong Learning
In the age of information, technical and functional skills continue to remain relevant. However, as Wahizan says, “it is important to explore capability and skill beyond a formal education”. Farehana echoes this sentiment saying, “capabilities need to be complemented and augmented with new skills in digitalisation and new technology applications.” As an example, Farehana shares that for many roles in the industry, it is becoming increasingly important to have at least a base understanding of data science.
At Petronas, before auditing their own internal talent, HR had to learn how to mine large amounts of data to categorise existing capabilities and skills. The HR team also set out to create a learning framework that empowered employees to take charge of their own career development. This exercise, involved defining every job’s role and defining every technical, functional and leadership competency needed for the role. To help its people decide on a suitable career path for their skills, HR also performed talent profiling by collecting, digitalising and processing all available information on each employee’s skills using artificial intelligence. At the end of this process, which is still ongoing, a learning platform will be designed to provide employees the resources needed to grow their skills for their chosen career paths.
Against the backdrop of digital transformation, providing learning opportunities for the existing workforce could be key to the long-term success of an organisation. Investing both time and money into reskilling and upskilling existing employees ensures that companies are agile and adaptive to future technological advances.
Building Leaders of the Future
Energy companies are at the forefront of a global transformation. Reskilling and upskilling jobs affected by technological disruption and the ongoing energy transition is not only ethical, but vital to the success of our energy transition. With easy access to information and expertise, people at all levels of an organisation can make increasingly informed decisions. Carefully exploring these opportunities can not only help to deliver direct business results but allow a business to increase the pace of change.
Executives also developed strong leadership capabilities in the renewable energy space
Companies that have taken the leap to diversify operations are already seeing the benefits. Wahizan shares, when establishing subsidiaries to grow the company’s presence in renewable energy, TNB observed not only positive business impacts, but realised their executives also developed strong leadership capabilities in the renewable energy space, creating a leadership bench that is ready to take on the helm and lead the way not only for TNB, but for the renewable energy market as a whole.
As Wisnoe aptly states, we need to build a pipeline of leaders that are skilled not just at the business level, but across multiple businesses and industries – not just for the future of our companies, but for the future of our nations.