Since joining Proco Global in 2008 to build our Process and Chemicals practice, it’s been a central part of my job to stay on top of all the emerging trends and shifts in this ever-evolving sector.
If you are working in process and chemicals you will be acutely aware of how much the sector has changed over recent years. Most of us have experienced the impact of the plummeting oil prices in June 2014, the significant increase of mergers and acquisitions, and the growing shortage of talent at the middle to senior management level.
The challenge is in understanding the likely long- and short-term consequences of these changes and how you, as a business, can prepare for and take advantage of them.
We recently published a free talent trend report on the process and chemicals sector, which provides a global perspective of the major trends that are shaping the future of the process and chemicals and how these vary by region. You can download ‘Recruiting in the Process and Chemicals sector’ for free by clicking here.
In the meantime, here’s a brief overview of the 10 key trends from the ‘Recruiting in the Process and Chemicals sector’ report.
10 Trends to Watch
1. An uncertain market
The process and chemicals sector has been beset by uncertainty since the rapid global drop in oil prices. The oil price drop catalysed a wave of mergers and acquisitions in the chemicals space, mainly due to the fragmenting of the industry by the bigger players and the pursuit of growth through cross-border deals.
This has exacerbated a number of recruitment challenges. My clients are telling me that succession planning is at the top of their agenda; it is keeping business and HR leaders awake at night as there is no easy solution to filling the sizeable gap in their workforce at the middle-management level. At the same time, candidate confidence has dropped, as well as their willingness to relocate, which further complicates matters.
2. Succession planning is no longer about doing the obvious
First, there’s the question of responsibility. Many businesses recognise the need for both HR and senior management to spearhead succession planning, yet finding individuals with a background in change management, relevant sector experience and strong people development skills is no easy task.
This problem is further exacerbated by mergers and acquisitions. Moving people internally to take responsibility for the integration of the businesses can create a daisy chain of gaps across the organisation that require urgent backfilling. One business leader I recently spoke with voiced the concern that “We are one acquisition away from being seriously short-staffed at the senior operations level”.
3. The return of the graduate scheme
An increasing number of process and chemicals businesses have globally re-introduced graduate and apprenticeship schemes with a view to accelerate their development in order to fill gaps in middle-management in the future.
This has fueled the ongoing trend toward rebranding the supply chain as an attractive career option in process and chemicals as well as other sectors.
4. A focus on ‘growing your own’
With the re-introduction of graduate and apprenticeship schemes, it’s clear that the process and chemicals industry is focused on nurturing talent from graduate level to save costs whilst also tackling the succession crisis.
Many businesses still face difficulties finding talented professionals to fill niche technical and engineering based roles as well as any positions relating to site leadership, and will often require the help of an external recuiter. Even though it is common practice it’s critical that businesses choose who to work with wisely; expertise, reliability and a large, ideally global, network are some of the key criteria you should take into account when making this decision.
5. There is salary pressure across supply chains across the world, particularly at mid-senior management level
Salaries are increasing up 2-4% a year in the United States and Europe and as much as 8-10% annually in China and other parts of Asia Pacific.
The salary pressure is greatest in Asia Pacific; when I speak to my colleagues in Hong Kong they tell me that demand is high and local talent is often overlooked due to imperfect English language skills.
6. Expatriate assignments are becoming a thing of the past
Expatriate assignments were traditionally used by the industry to develop supply chain talent in new markets, but I have seen these reduce dramatically in recent years.The increasing expense and retention risks involved with expatriate assignments adds a further layer of complexity to filling mid-level and senior management positions around the world.
7. In Europe, the process and chemicals industry is experiencing a slow recovery
The climate of instability and nervousness in Europe has directly impacted recruitment, but this has been further compounded by the recent wave of mergers and acquisitions. Many of the new job openings that I work on in procurement, supply chain, quality, operational excellence and manufacturing are the result of M&A activity leading to a reshaping of resources.
Leadership teams continue to ask their workforce to do more with less, or to develop additional capabilities with the same headcount. The vacancies that do exist are not easy to fill, especially as candidates are increasingly nervous to move.
8. In the United States, the competition for talent is heating up
The growth of the shale gas industry has fueled competition for talent with a background in chemicals or mechanical engineering. We are finding that candidates are often unwilling to move around the country, but there are still hopes that the oil price drop will free up talent in the previously booming Texas market.
9. Candidate mobility is low
Candidates globally are showing less flexibility on location for a number of reasons. Process & Chemicals professionals in Europe lack the confidence to move jobs in an uncertain economy, whereas in the US they are reluctant to leave areas with favourable tax regimes, such as Texas. This has limited the industry’s ability to reap the benefits of the oil price drop, which many hoped would free up experts who would previously have been lured by opportunities in Oil and Gas.
Perhaps surprisingly, there has not been a significant move of talent from Europe to the US and Asia, despite the wider opportunities available in those regions.
10. In Asia Pacific, job hopping is a problem
Over the past decade, most process and chemicals sector growth has been driven by Asia, and consequently supply chain issues within recruitment are opposite to those in the United States and Europe. Unlike in the west, where a graduate recruitment slump in the 1990s has resulted in too few experienced supply chain professionals in the 30-45 age bracket to meet demand, there is a wealth of talent available. However, demand remains high, and a thriving market means has encouraged people to change jobs every few years.
Looking to the future
High calibre process and chemicals professionals across the supply chain are in high demand and short supply across Europe and North America, and this is likely to remain the case, at least in the short term.
This means that options should start to open up for talent from Asia Pacific, who are interested in secondments in Europe and the United States. Attitudes are shifting, and companies are willing to dedicate more to developing global careers for their best people in locations such as China, Singapore, Thailand and Indonesia.
Companies in Europe, in particular, may need to consider wage increases, or start looking beyond their own continent to meet their requirements. They need to make supply chain succession a priority now if they haven’t already.
What other trends have you seen? Please share your thoughts in the comments section below, as it would be great to hear from you.