Untapped Reserves: Promoting Gender Balance in Oil and Gas
The following is an extract from ‘Untapped Reserves: Promoting Gender Balance in Oil and Gas,’ a report, prepared by the World Petroleum Council and The Boston Consulting Group, intended to provide a comprehensive baseline on gender balance in the oil and gas industry today. To read the full report, click here.
“Oil and gas companies are failing to fully leverage a potentially sizable and critical pool of talent.”
Representing roughly a fifth of employees in the oil and gas industry, women account for a significantly smaller share of the workforce than they do in almost any other sector. These women also work disproportionately in office jobs; they have a very limited presence both in technical roles, which are often considered prerequisites for career advancement, and in upper management. The upshot: oil and gas companies are failing to fully leverage a potentially sizable and critical pool of talent.
The loss to the industry is threefold. First, oil and gas companies have a smaller number of highly qualified candidates to choose from when filling positions, especially in the middle and higher ranks, because many talented women either never join the industry or drop out prematurely. Second, these companies miss out on the higher quality of teamwork, diversity of perspectives, and creativity in the solving of technical and business problems that characterize those with larger percentages of female employees. Third, the industry’s relative lack of gender diversity, particularly in the senior ranks, hurts its reputation among women as a career choice. This can create a vicious circle, with the industry finding it progressively more difficult to recruit women across the board.
The combined effects could ultimately weigh heavily on oil and gas companies’ ability to increase capital productivity, which will be vital as they wrestle with the challenges posed by the potential large-scale retirement of many experienced employees, an ongoing uncertain oil price environment, and advances in robotics and artificial intelligence that could reshape the industry in a host of ways.
But attracting and retaining greater numbers of women, particularly those with optimal backgrounds and skill sets, will pose challenges for the industry. These include the limited number of girls and women pursuing technical educations, structural barriers within the oil and gas industry that make it difficult for women to advance and to balance work and family, and an established male-centric culture that remains prevalent throughout much of the industry. We strongly believe, however, that the industry can and must surmount these challenges and close the gender gap if it hopes to position itself optimally for tomorrow.
“The industry can and must surmount these challenges and close the gender gap if it hopes to position itself optimally for tomorrow.”
The following are the key findings of our report:
The percentage of women in the industry’s workforce drops over time and falls particularly sharply—from 25% to 17%—between the middle-management and senior-leadership career stages. This trend won’t change unless CEOs make gender diversity a higher strategic priority. Although 56% of men believe that their CEO considers gender diversity important or very important, only 36% of women do. CEO commitment matters because many employees, especially men, take their lead from the CEO. Of men who think their CEO considers gender diversity very important, only 7% consider it unimportant or very unimportant themselves, while 86% consider it important or very important. Conversely, of men who think their CEO considers gender diversity very unimportant, 58% likewise consider it unimportant or very unimportant, while only 34% consider it important or very important.
Although men and women start out on an equal footing, women rarely reach the top of the organization. This isn’t owing to a lack of ambition: our research shows that women are just as ambitious as men. So what’s the reason? Men, especially those in senior positions, attribute the phenomenon largely to a shortage of qualified female candidates. This assessment is probably accurate: among women who have spent many years in the industry and might otherwise be considered suitable candidates for promotion to senior management, many have failed to accumulate the critical experiences that their male colleagues have. Thus, even among women who are still at the company after 15 to 20 years, the odds of landing a senior executive job are small: women hold less than 20% of these positions.
“Even among women who are still at the company after 15 to 20 years, the odds of landing a senior executive job are small: women hold less than 20% of these positions.”
There are wide gaps in perception between men and women regarding the gender-related challenges that women face. For example, men believe that women are generally less flexible than men and therefore less suited to certain roles, including many expatriate positions and jobs in the field. But our research shows that women are in fact just as flexible as men, and sometimes even more so. The differences in opinion between men and women about the challenges women face are particularly evident with regard to women’s underrepresentation in the senior ranks. Fifty-seven percent of women said that female employees receive less support for advancement into senior positions than male employees; only 24% of men agreed. Fifty-six percent of women said that women are overlooked for senior positions; only 23% of men agreed.
Unless companies develop a critical mass of women across all roles, meaningful progress toward gender balance in the industry will not occur. Many oil and gas companies are making a genuine effort to improve gender diversity through recruiting practices, work-life-balance policies, and other means. But these measures have not produced the desired results, in large part because they are too hands-off, failing to focus on meaningful quantitative targets. While an average 22% of jobs in the industry are filled by women, a look at specific job categories tells a different story. College-educated women hold fully 50% of entry-level office and business-support positions, but they hold only 15% of entry-level technical and field positions.
There are many actions the industry can take to increase the number of female employees and accelerate its progress toward gender balance. The industry must look holistically at the various functions—especially technical ones, where women’s representation is particularly low—and establish targets that will boost women’s presence to the point of critical mass. The industry should also take specific actions centered on three critical career stages:
At the entry level, the industry can expand the talent pool it draws from by taking steps to increase women’s participation in STEM programs. It can enhance its attractiveness to women as a career choice by promoting the wide range of jobs available and making career paths more flexible, working with governments to remove structural barriers that make it difficult for women to work in the industry, and increasing the number and visibility of senior female role models.
At the midcareer level, the industry can work to ensure that women have the same career opportunities as men, that each woman has a sponsor who can offer career guidance, and that work-life-balance policies are available and applied equally to male and female employees.
At the senior-leadership level, the industry can provide stretch goals for women and the necessary support to help them succeed, broaden the range of career paths from which senior leaders are picked, and ensure that standards for promotion are applied equally to men and women.
Greater gender balance is a worthwhile and attainable goal for the industry, and one that it has the means to achieve. Provided that leadership commitment, especially from CEOs, remains sufficiently strong, the industry could boost women’s representation steadily and materially over time—and reap a host of benefits, including improved organizational performance, creativity, decision making, and morale.