Impact of COVID-19 increases urgency of digital technology investments for oil and gas; workforce skills gaps hinder ROI

• Data analytics and insights is one of the top-three trends expected to positively impact oil and gas
• Three in five oil and gas workers need to be reskilled or upskilled
• 92% agree the ability to reskill will determine their company’s success over the next three years

Ninety percent of oil and gas executives agree that investments in technology and workforce are essential to surviving current market conditions, according to a new EY survey: Oil and Gas Digital Transformation and the Workforce Survey 2020. In fact, 58% of respondents said the COVID-19 pandemic has made investing in digital technology more urgent, with a majority planning to invest a great deal (29%) or moderate amount (51%) relative to their total budget.

Technology does not use itself, addressing skill gaps linked to future success

According to the survey, nearly half (46%) of companies, on average, do not have the skills within their current workforce to realize the investment on their adopted technologies. Companies recognize a lack of maturity in many skills around digital technologies they have deemed as critical — on average, the gap between importance and maturity is 36%. For instance, the increasing availability of big-data analytics and insights was cited by 43% of executives as one of the top three trends that will positively impact their company’s business growth in the next three years. Yet, the gap between strategic importance and maturity of key skills was one of the widest on data analytics at 59%.

Organizational and cultural challenges top the list for barriers to reskilling

Ninety-two percent of executives agree their ability to reskill as a company will determine their success over the next three years. However, only 9% feel strongly that they have a robust plan in place to do so, and just 3% feel strongly their organization is good at teaching in-demand skills, according to the EY survey.

When asked about their current workforce, respondents said 60% of workers need to be reskilled or upskilled, and it will take an average of 10 months to reskill the average worker, with nearly half of executives (48%) expecting it to take a year or longer. Executives surveyed raised the time needed to reskill (97%), competing priorities (95%) and difficulty in assessing employee progress (95%) as primary impediments to effective and timely reskilling. Furthermore, two-thirds expressed a belief their organization’s structure hinders its ability to innovate, making solving these challenges as well as others, more difficult.

Proceed with caution — executives expect future access to in-demand skills

Oil and gas executives anticipate greater access to workers with digital skills within the next three years, which will help alleviate the current talent and skills shortage, according to the EY survey. The proportion of executives whose companies have adequate access to workers with cloud computing skills is expected to improve 11 percentage points over current availability along with digital literacy (+18), data science (+26) and artificial intelligence (AI, +24), respectively.

Commenting on the survey, Christoforos Socratous, Partner and Energy Sector Leader of EY Cyprus, said: “The oil and gas sector is now at a critical juncture in which the role of technology will accelerate, the volume of data will grow and competition for talent will increase significantly. During the pandemic, the timeframe for technology adoption has dropped from five years to three months. Companies will need to spend more on technology, but, more importantly, to invest in training and reskilling their workforce to scale and integrate technologies. Companies must find an investment balance while addressing market pressures. Otherwise, the industry could potentially lose crucial years and a generation of workers.”