Rebuilding Reputation: why oil and gas firms need to look within

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Barely a day goes by without a news story suggesting the oil and gas industry is in crisis. Following a number of scandals and a fall in oil prices, trade association Oil & Gas UK reports that the sector had seen its worst annual results since 2010, and predicts that as many as 35,000 jobs could be lost in the sector over the next five years.

As the industry looks to scale down its workforce, each role takes on a new level of importance: from rig workers to CEOs, every person employed within the sector needs to be the ideal candidate, performing with the best intentions and limiting the amount of risk oil and gas companies are exposed to. But exactly where do the risks lie?

In or Out?

We spoke to HR directors in the UK’s largest oil and gas organisations and found as many as nine in 10 (91 per cent) believe the biggest threats to their company are external, for instance acts of activism or hacking.

However, there have been a number of recent high profile cases – in the oil industry and elsewhere – where it has been internal issues, such as poor senior leadership, that have negatively impacted reputation and financial performance.

In some cases, organisations are focusing on preventing people from the outside affecting their business, when in reality, it is those within who almost always have the greatest impact on overall success.

Top to Bottom

In addition, with fewer positions being made available, it’s more important than ever to have the right person in each role.

Consistency is key no matter the job level. When hiring into each position, the processes used should be robust, transparent and auditable. When making a senior appointment, due diligence is even more important as an organisation’s reputation rests in the hands of those at the top.

However, our research shows that at the moment only half (55 per cent) of oil and gas companies always check basic background details, like criminal record or employment history, when hiring a new CEO. This is lower than in any other sector we investigated, but why is the industry so trusting?

Three quarters (75 per cent) of high profile positions in the industry are won based on personal connections. This is 50 per cent higher than the average across all other sectors and suggests that a robust process is not carried out because organisations are relying on word of mouth, connections and influence when making important hiring decisions – rather than proven facts.

As Warren Buffet famously stated: ‘it takes 20 years to build a reputation and five minutes to ruin it.’ With the oil industry experiencing a turbulent period, it’s time for organisations to improve their recruitment processes at all levels in order to protect from internal risks and ensure a successful future.

*All data is taken from The Untouchables: Protecting Your Organisation from Leadership Risk which is based on detailed interviews with 140 senior HR leaders in regulated and non-regulated UK companies with over 5,000 employees.

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