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Industrial Firms Focus on Retaining and Developing Key Talent During the Downturn

By Paul Donnelly

Although the industrial world finds itself in a volatile period of much economic uncertainty, maintaining the core of its current workforce is critical for capitalizing as the economy recovers. In previous downturns, many firms (such as engineering, procurement and construction companies that design and build complex energy and chemical plants) cut personnel deeply to quickly align costs to reduce revenues. These cuts ultimately undermined those organizations' ability to successfully pursue and execute new projects as capital spending picked back up.

However, these cyclical trends underlie a larger, looming issue: a large segment of skilled industrial workers is close to retirement age. (For example, in just one area'construction' "about 41 percent of the current US . . . workforce is expected to retire by 2031."1 ) The need to retain and transfer the experience and skills of those workers is on the minds of many executives.

To ensure the long-term viability of their workforces, firms need to prepare for the future by continually enhancing the skills of their employees and moving forward aggressively with digital transformation programs that support knowledge transfer and reuse through the organization. Those two measures will help firms cope with future disruptions that, at this point, seem inevitable and part of the new normal.

Disruption: Good for Differentiation

Two of the most obvious disruptions to the workforce over the last several months are the shift to remote work and how people work in the context of increased enforcement of social distancing measures. Although only some workers in the industrial plant can do their jobs effectively while working remotely, the organizations that were able to quickly pivot to remote work or adjust working conditions for plant workers not able to do their jobs at home will come out stronger from this uncertain time. Being agile as a business and being prepared for the future are two major differentiators that not only set an organization apart from its competitors but also attract and retain talent. How an organization reacts to major disruption is always a good indicator of how it might handle any change, in any situation. An industrial company that can adjust to an increasingly complex and uncertain world will have more success both in retaining key talent and in recruiting the digital natives needed for the future.

Many of the executives now helming industrial firms have accumulated significant experience in managing through previous downturns and are well positioned to provide sound leadership. With assurance that leadership will make the appropriate shifts to adjust to new realities'without compromising the firm's core capabilities'employees will have confidence that their organizations will remain competitive in the future.

Continual Learning Is Now Mandatory

If the industrial world wants skilled talent, it may have to develop that talent in house. Technology completely revamps industrial organizations and the way they operate, but it also constantly changes. The skills that plant operators or engineers needed to possess just a few years ago might look entirely different today. This rapid pace of change is one reason why the industrial world can never stop enhancing the skills of its workforce.

Modern continuing education, especially in the industrial segment, needs to encompass more blended learning to be effective. Expert-guided learning in a classroom can certainly be a good option, especially if a local university or college can partner with an industrial organization to create a curriculum for workers to gain new skills and experience. At the same time, if an industrial company's technology vendors offer specific certification programs in leveraging their technology or processes, it is important to have workers get those certifications to ensure that they are using the technology correctly and getting the most value that they can from it.

Technology will play a key role in keeping skills sharp. For example, operator training simulation software can let workers experience real-world plant scenarios virtually, so that their choices, decisions, and mistakes in that simulated environment do not have actual consequences. Such software helps employees learn in ways that would not be possible in the real world.

Attracting New Talent

For quite some time, younger generations have relied on technology to streamline many aspects of their daily lives. Through this experience, they have developed expectations that they will be able to leverage technology to streamline much of their work lives, too. Firms that adopt new technology (such as artificial intelligence and machine learning) to reduce tedious, low-value tasks will therefore stand out and have an edge when recruiting the best talent among younger employees. At the same time, because younger generations joining the workforce prioritize environmental sustainability and corporate responsibility more than preceding generations, artificial intelligence–enabled technologies that support "greener" operations within the plant life cycle can help attract that talent.

Even as the industry continues to navigate the current downturn, it also needs to be planning for the future. The downturn will end eventually, and companies must prepare now to face the demographic, skills, and technology shifts ahead. Only then will they be able to retain and recruit the talent they need to succeed.

1 Maria João Ribeirinho et al. 2020. "The Next Normal in Construction: How Disruption Is Reshaping the World’s Largest Ecosystem." McKinsey website, June, www.mckinsey.com/~/media/McKinsey/Business%20Functions/Operations/Our%20Insights/The%20next%20normal%20in%20construction/The-next-normal-in-construction.pdf?shouldIndex=false.

About the author:

Paul Donnelly is the industry marketing director of engineering and construction at Aspen Technology, which helps asset-intensive companies digitally transform to maximize safety, sustainability, and performance. He can be reached at linkedin.com/in/paul-donnelly-6a9103.