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Workforce development - addressing staffing challenges in the North American chemicals industry

Over the previous quarter century, the North American Chemicals Industry has been challenged to do more with less in order to stay globally competitive.

chemical plant

Since 2001 the chemical industry workforce has shrank by 25% with a corresponding 20% improvement in unit labor costs.* This aggressive focus on lean operations has enabled us to stay in the game but it has also left the industry facing a staffing and experience shortage.  Limited industry hiring has left a vacuum of seasoned staff to replace the “old guard” as they move toward retirement. The safety, environmental, and performance implications are self-evident. 

Building an effective workforce under these conditions is not an easy task, but those leaders that tackle this issue head on will be well positioned to take advantage of the industries’ brightening future.  Those that don’t are at risk of falling victim to yesterday’s “lean at all costs” medicine.  So what can be done?  The staffing challenges facing today’s chemical industry should be addressed across four dimensions: Organizational Structure, Staffing Management, Skills & Competency, and Leadership Development.

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This is a typical site staffing profile with 80% of the site experience residing in just 37% of the staff.  The majority of those individuals will be retiring in the next 3 to 5 years.

The first dimension, Organizational Structure, addresses the logic and clarity of the organizational architecture and roles.  As the organization evolves, the informal working relationships that existed in the past are insufficient to organize and align the efforts of a changing, less tenured, workforce.  “Unclear job roles and expectations” is consistently a top reason for technical and supervisory staff leaving within their first two years of employment.  Implementing a simple, scalable, and well defined structure is required to ensure new (and existing) employees quickly and clearly understand the part they play in the operation.  It reduces confusion and frustration, improves coordination and performance, and ensures the smooth assimilation of new employees.  Moreover, it provides the framework required to proactively plan the people requirements of tomorrow.

 

Those leaders who are proactively developing their workforce today will be positioned to take advantage of the growth opportunities tomorrow.

The second dimension is Staffing Management.  The industry faces a limited talent pool and significant geographic constraints.  The time required to hire new employees can range from three to six months for field staff to beyond two years for some technical roles.  Add to this the one to three years most managers identify as the “time to competency” for new hires and it becomes apparent that we need to be acting now to ensure we are staffed appropriately not for next quarter, but one to three years into the future.  With a clearly defined organization, a staffing logic is established by relating each role to simple operational metrics that drives its workload.  Linking this logic with the organizations long range planning process is the first step in forecasting staffing needs with the required lead time to get ahead of the hiring curve.  Implementing a system of staffing focused meetings and metrics provide leaders the tools to plan the hiring, onboarding, and training of new employees. 

The third dimension in addressing the People Challenge is Skills & Competency.  Establishing an effective training and development program ensures new employees can rapidly become contributing members of the team.  Developing existing employees to assume roles of increasing complexity is both a best practice and a necessity given the limited talent pool of experienced resources available for hire.  Building from the clearly defined organization, a competency profile outlining the required skills and work standards is developed for key technical and operational roles.  A base line assessment of current staff and an understanding of the staffing needs outlined above are used to identify training priorities.  A combination of external vendors and internal subject matter experts (SMEs) are leveraged to develop and deliver training.  Internal SMEs and Leadership certify mastery in the classroom, on the job, and in the field.  Again, implementing a system of training focused meetings and metrics provide leaders the tools to plan and prioritize the training and development of their people.

Leadership Development is the final dimension that must be proactively addressed.  High turnover in senior staff requires junior employees to rapidly take on increasing levels of accountability.  It is not uncommon for functional managers and front line leaders to have less than five years of experience.  There is simply not enough experienced leadership in the industry to cover needs.  Tomorrow’s leaders will have to be developed internally and that process needs to start today. Building effective leaders requires first providing them a framework and environment where they can demonstrate leadership.  Again, this requires clear roles, expectations, and measureable objectives.  Once this is in place they can be effectively coached and held accountable for their and their teams’ performance.  In this way leadership expectations are built into the daily and weekly execution of an individual’s duties and leadership behaviors can be tangibly observed, coached, and reinforced.

A New Generation:  The demographics facing the North American Chemicals Industry leave it poised for a transition to a new generation over the next 3 to 5 years.  The technical and operational leaders who have helped us navigate the challenges of the last two decades depart and we are left facing a basic supply issue.  Unlike, however, other supply chain constraints we are familiar with, human resource constraints are the least visible, least predictable, and require the longest lead time to respond.  Only those leaders who are proactively developing their workforce today will be positioned to take advantage of the growth opportunities tomorrow.  

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