1. Navigating the crude cycle
Agility is the key to
workforce advantage
By David S. Andrews and Colin Sloman

2. Plunging crude oil prices have set off a series of rapid cost-cutting
measures across the oil and gas industry. For many companies,
the fastest and easiest response has been to announce large-scale
layoffs and delay of capital projects. While this will help ease cost
pressures in the short term, it is not a sustainable strategy. Energy
industry executives need to create much more agile, digitally-
enabled organizations, ones that remain competitive despite the
vagaries of market cycles.
Current conditions are yet another reminder that
the energy business is cyclical and volatile. Given
its unpredictable nature, it’s not surprising that
in a recent Accenture study, only 29 percent of
energy executives reported feeling well prepared
to deal with uncertainty.1
Winners will be those
that shake off the complacency of years of high
prices and get serious about gaining more agile
ways of working—particularly when it comes to
workforce management.
Yet according to Accenture research, only
22 percent of energy executives say their
organizations are able to shift resources very
easily to address emerging or critical needs.2
Now is the time for energy companies to invest
in a workforce of the future—one that is both
nimble and multi-disciplinary, augmented by
proven digital technologies. To do that, they
need to focus on four areas:
• Establishing intelligent operating models
that enable agility
• Managing critical talent with intent in
support of future growth
• Getting control of the contingent workforce
to drive value for the organization
• Extending digital capabilities to enhance
brains and brawn
2 | Navigating the Crude Cycle

3. Companies using major workforce reduction as a blunt instrument
to deal with today’s oil price challenges are better off asking
themselves: What are the smartest investments that will continue
to make payoffs regardless of market volatility?
Establish intelligent operating models
Traditionally, many in the energy industry have been
conservative in their approach to innovating workforce
practices which likely—and understandably—stems from
concerns about safe operations. Advances in readily
available and proven technology have put safety con-
cerns to rest and in a wildly fluctuating market, rigidity
doesn’t cut it.
Nor do inflexible workforce models. Now is the time to
establish flexible, self-organized project teams enabled
by digital platforms with greater emphasis on agility.
The end result: Streamlined decision-making at the
edge of the organization, with less emphasis on
hierarchy. And a more empowered workforce—one that
makes decisions based on sound judgement, supported
with analytics, simple and agile processes, and digital
platforms.
Manage critical talent with intent
Predictably, as soon as crude oil prices dropped, energy
companies and the oil field services and engineering
sector (OFSE) began layoffs. Companies need to retain
the right workers and prevent the loss of critical knowl-
edge needed to support future growth. The question
becomes, how should the sector manage their critical
workforces to ensure they have the best skills for
success and are able to meet any market situation?
Managing critical talent with intent comes down to
three actions: Firstly, clearly define your critical talent
in functional and technical disciplines by using a
segmentation framework before considering deep cuts.
Secondly, understand how hard it will be to replace or
develop critical workers. With that in mind, establish
retention programs and world-class talent development
to systematically reduce time to autonomy. And to
ensure you are equipped to develop talent much faster
for critical roles.
Finally, don’t stop hiring new graduates into critical
talent segments. A recent Accenture survey found only
four percent of recent graduates are interested in the
oil and gas industry.3
Coupled with a reputation for
being environmentally unfriendly and dangerous, it will
be a challenge to attract the best and the brightest.
Energy players need to change perceptions about the
industry and provide workers with more democratized
and customized work experiences, including tailored
learning and accelerated development.
Navigating the Crude Cycle | 3

4. 4 | Navigating the Crude Cycle
Get control of the contingent workforce
Extend digital capabilities
Accenture analysis finds that contingent labor can
comprise up to 80 percent of the workforce at a typical
energy company.4
Other sources place the number even
higher. While these flexible talent pools can be a great
way to keep costs down, many energy companies have
come to rely on contingent labor for critical roles. This
can leave them vulnerable to cost spikes, variable skills
availability, safety incidents and unmanaged tenure,
as well as exposing organizations to contingent labor
risk—including legal liabilities such as co-employment
obligations.
Yet most energy companies have yet to crack the code
on managing contingent labor to drive the greatest
value for the organization. For starters, most companies
don’t have a clear idea of how big the contingent labor
pool really is or even what it’s doing. They can gain
that insight by bringing together HR, Finance, IT,
Procurement and front-line management to all work
collaboratively. The point is to gain transparency in
order to lower costs and drive value from the workforce.
And then decide which tasks can be brought in-house
or provided by cost-effective managed service contracts.
Companies need to take a good look at their extended
organizations and consider a more aggressive auto-
mation strategy to enhance both brains and brawn
of the workforce. For brains, by automating workflow
and administrative tasks, energy companies can free
up resources to invest in remote field technology
to augment capabilities where it matters. Providing
front-line field workers with analytics and collaboration
tools will support a new breed of multi-skilled
connected employees who can acquire just-in-time
capabilities to dramatically improve wrench-time
productivity. Additional benefits include stronger
safety performance, and clearer visibility into asset
efficiency through analytics.
For brawn, consider Statoil’s new North Sea Operations
in the Valemon field. Although the company’s platform
can accommodate up to 40 workers, it will eventually,
if all goes to plan, house none. Instead, operations will
be run by remote control from the shore. The benefits:
lower cost, greater safety for workers and an operating
approach that is fit for the future.5

5. A New Equilibrium
We don’t know whether oil prices will rise or fall, but we can
predict a volatile future. Executives need to manage accordingly,
through more flexible operating models and by managing all areas
of the workforce in a more discerning fashion. Enabling these
changes: a range of digital capabilities including automation,
robotics, analytics and mobile technologies. For those that succeed,
the result will be a much more resilient, agile organization with
a dramatically reduced cost base. Supported by a talent strategy
capable of thriving despite marketplace conditions.
Navigating the Crude Cycle | 5

6. Sources
1 “Accenture research on business agility,” Accenture, 2014.
2 “Accenture research on business agility,” Accenture, 2014.
3 “Accenture 2015 College Graduate Employment Survey,”
Accenture, 2015.
4 “Choke point: Capital projects”, Accenture Upstream Oil &
Gas Industry Value Lab, August 2013.
5 “Valemon on Stream”, www.statoil.com, updated January 5,
2015.
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Join the conversation:
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Contact the Authors
David S. Andrews
david.s.andrews@accenture.com
Colin Sloman
colin.sloman@accenture.com
Additional Contributor
Parvinder Rehal
parvinder.s.rehal@accenture.com
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