Academia-Industry Brainstorm Session 17 th October, 2008 Dr.A.K.Balyan, Director(HR), ONGC Oil & Gas Sector: Academia-Industry Interface & HR Policies.

Academia-Industry Brainstorm Session

17th October, 2008

Dr.A.K.Balyan,

Director(HR), ONGC

Oil & Gas Sector:

Academia-Industry Interface

&

HR Policies

UNESCO- Ranking for India in Education Development Index

105 (out of 137 countries)

Completion of school education

10% ( against 85% in dev. Countries)

Access to higher education 6-7% ( against 50-80% in dev. Countries)

Labour participation Rate 62% ( China - 82%)

Labour Productivity $6,587….( China-$9,846)

Skill Base 50% of Indian population is below 25 years

Academician’s viewpoint Universities focus should be good educationEmployability is the secondary objective

Skill Shortages

Skill Mismatch

Quality and Focus in Education

Absence of a structured interface

Sector Trades shorts in supply

Professionalsshort in supply

OilITI diploma holders Mechanical ITI diploma holders Electrical ITI diploma holders Civil

☯Chemical engineers☯ Electrical engineers☯ Mechanical engineers☯ Civil engineers☯ Instrumentationengineers☯ Finance professionals (CAs/MBAs)

Source:-FICCI, in its 2007 Survey, has identified Oil Sector as one of the sectors, which deserve immediate attention in terms of promoting skill development and meeting industry requirement.

- We need to ensure a correct mix of ITI/Diploma/ Degree Education institutes based on feedback from the Industry- Presently a lot of emphasis seems to be given towards creating facilities for higher education- Focus on ITI/Diploma courses has to be given to tide over the shortage of technicians in key Industry sectors- Oil Sector requiring it the most

In developing countries, onus of development lies mainly with the Government

Govt. faces predicament of multiple demands and limited resources

Govt. alone thus cant meet objectives like interface

On other hand, industry has both resources and purpose to foster interface

However, to ensure a strategic focus, government/ nodal agency needs to set the agenda and monitor the interface

Way forwards from earlier meets..Way forwards from earlier meets..

RGIPT & GERMI set-up

Petrofed Study on Workforce Sustainability and Talent Management in Indian Oil and Gas Industry-2006

Curriculum developed by DGH in association with IIT, Mumbai , IIT Kharagpur, ISM, Dhanbad,etc…

Need for setting up a vibrant coordinating agency to promote interface for the oil sector on lines of NASSCOM for the IT Sector

Facilitated by Coordinating Agency

Promote capacity building within academic institutions

Help identify and develop learning opportunities for problem-solving across industries

Eliminate existing voids such as lack of clarity on mutual expectations, lack of trust etc.

Promote applied research

Global Trends Indian Oil and Gas Sector Trends Challenges for NoCs

Trend HR Imperative Response :ONGC

Growth in Worldwide Investment in E&P Companies

Heightened demand for E&P professionals

Innovative Sourcing Program

Growth of Service SectorPreference to Service Sector Jobs- softer and more remunerative

Creating a strong Employer Brand for the Oil Sector Companies

Sustained Employer Branding Initiatives

Misperception of Oil Industry’s attractiveness.

Fewer New Engineers joining the Oil Sector ( Ernst and Young Report -2008)

Trend HR Imperative Response :ONGC

Heightened Exploration Activity through NELP

Demand for more fresh and experienced professionals

Supporting Academia to develop talent for the Oil Sector - Structured Development Initiatives for the existing employees

Entry of MNCs and New Domestic Companies

Collaboration and Competition

Designing Comprehensive HR Policies for the JV Companies

Net Outflow of Talent to Oil Sector Companies Worldwide

Launching Major Retention Initiatives

Innovative Retention Strategies

Trend HR Imperative Response :ONGC

Compensation Controls on Indian PSUs

Net Outflow to Private Sector/MNCs operating in India offering attractive remunerations( compensation identified as a major attrition factor)

Creating an Integrated Retention Strategy which has shown some Success

THANK YOU

9 7 57 01 0 5 2

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IT I ( 4 2 0 0 N o s . )

E n g i n e e r i n g D e g r e eL e v e l ( 1 4 6 0 N o s )

P o ly te c h n i c s ( 1 2 4 5 N o s )

M B A ( 1 0 5 2 N o s . )

M C A ( 9 7 5 N o s . )

P h a r m a c y ( 6 3 0 N o s )

A p p li e d A r ts &C r a f ts ( 5 3 5 N o s . )

A r c h i te c tu r e ( 1 2 0 N s . )

H o te l m g m t & C a te r i n gT e c h o n o lo g y

IIT ( 7 N o s . )

IIM ( 6 N o s )

The Quality Issue: State of our ITIsThe Quality Issue: State of our ITIs

About 35% of ITIs reported under utilization of seats Basic industrial trades offered by these ITIs had no market

demand Trades offered by participating ITIs varied between 2- 38 as

against 110 government approved trades 82% of ITIs had placement servicesInadequate supplies of raw material- only 6% of expenses allocatedShortage of staff- 89% ITIs had staff strength less than the sanctioned strength70% of ITIs did not have allocated budget for staff training & development28% of the ITIs reported no industry interface 32% ITIs reported lack of appropriate supervision

TIME for EXCLUSIVE ITI s for Oil Sector Trades

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India Korea J apan Germany Canada Mexico

Vocational Skills in India Compares Unfavorably to

other countries.

India Receives only 8% formal Vocational Training

which is very less. %

Challenges For India

Source: Efficiency training Study Report by ILO

Technical Education in India : A Technical Education in India : A ComparisonComparison

Nodal Agency to:- Maintain & Analyze Data from Academia( Courses

Details being conducted in Academia) and Industry ( Requirement of Fresh Talent –Discipline wise and Competencies required)

Coordinate with national/ global faculty and industry domain experts regarding inputs for upgradation in curricula

Collect and Analyze Data from World Energy Outlook Report/Indian Plan Data/ Hydrocarbon Vision about the long term/ short term projections for the sector

Based on Interpretation from above, prepare annual report on requirement of additional capacities from acacdemia

Coordinate with Industry and obtain requirements for collaborative research projects .Identify academic institutions best suited for taking up such research projects.

Collect , analyse and synchronise requirements from academia and industry for exchange programmes

Conduct coursewise rating assessment of courses being conducted at various academic institutions

Assess/Moderate requirements from Academia for financial support / opening up new centres for petroleum engineering/ geosciences. Forward such requirement to relevant players in the sector( upstream/ midstream/ downstream)

Facilitate student- industry interface by facilitating in identifying

The coordinating agency wou can facilitate a more planned ,structured and meaningful academic interface for the entire petroleum industry of India rather than the piecemeal initiatives taken up individual Corporates

– Historically, 70% of industry investment has been targeted at the upstream

– However, both upstream and downstream projects draw personnel from the same talent pool

Source: 2006 IEA 2006 World Energy Outlook

Courses From 2012 2017

Reservoir Engineering 250 350

Drilling 50 150

Geophysics* 150 200

Geologist** 150 150

Total (For India Demand) 600 850

Additional to Tap Global Opportunity

100 100

Total 700 950

*Geophysics – 150 per annum required from 2009

**Geologist – 100 per annum required from 2009 -2011

Source:- PwC Study for Petrofed -2006

Projected Requirement every year

• Aggressive Recruitment up 50% over the previous year

• Job Fairs for specific disciplines- Two held at the sidelines of the SPG Conference in 2006 and 2008

• Re-employment for executives and Engagement of experienced superannuated professionals as Advisors/Consultants

• Tenure Base Recruitment for Executives and Staff- Getting the buy-in of the stakeholders that even for a PSU, tenure employment is the need of the hour for E&P Companies

Sustained Internal and External Communications highlighted through success stories, have helped in creating a perception of ONGC as :-

• A major player in country’s economy in an important sector

• An ‘Integrated Major’ with a global presence with interests in sectors like Refining, Power, Alternate Energy.

• Preferred Employer amongst Corporates

Creating a Strong Employer Creating a Strong Employer BrandBrand

Not high tech or creative

Running out of oil & gas

No industry growth or advancement opportunity

Not enough jobs for graduates

PE is a narrow discipline

E&P industry has a hire & fire mentality

E&P industry is environmentally unfriendly & unpopular

Stable jobs for the future Jobs are high tech & exciting Fossil fuels will continue to play a central role

in our energy future PE is a core engineering discipline that can

handle a broad array of subsurface problems Fiscally & environmentally responsible use of

fossil fuels is our best energy option

We need to get the message out

Dick Chaney (past Halliburton CEO): “As a former member of Congress, I’m probably the only person whose image was improved by coming to the oil industry.” OTC Panel Discussion

R.D. Blue (ExxonMobil): “Our industry has an image problem that comes from lack of getting the message out.” NY TIMES, July 1, 2001

Area awarded (in Sq. Km)

Year of

award

Onland Deepwater Shallow Off

Total Cumulative (till year)

% of sedimentary basinal areas opened for exploration

Pre NELP 56624 14904 3831 75359 75359 2%

1998 NELP 1 27562 54770 86008 168340 243699 8%

2000 NELP 2 18074 118258 53171 189503 433202 14%

2001 NELP 3 22922 146405 35343 204670 637872 20%

2002 NELP 4 31155 161555 0 192710 830582 26%

2004 NELP 5 32868 103948 8364 145180 975762 31%

2006 NELP 6 56866 273291 22034 352191 1327953 42%

Super Unnati Prayas

Multi-skilling ITI Certification Courses

Re-employment of Former employees Tenure-EngagementHiring Specialists as Advisors and Consultants

World Class Training / e-learningWork associations with Global OperatorsStretch Assignments and Global exposureDual Career Ladders

Best Social Security, Retiral and Medical BenefitsGenerous welfare measuresComprehensive Education Support to wardsWork-Life Balance Avenues

Country Pay Making Decisions

ChinaPSEs have some freedom within overall guidelines

France Pay determination is decentralised

Italy Centralised Pay determination

MalaysiaPSEs have the flexibility to determine

Middle East PSEs can determine

Singapore PSEs can determine pay

United Kingdom Pay determination is decentralisedUnited States of America

PSEs can determine pay

Source: Mercer Consulting

Country Ratio of Entry Level to CEO Salary

China 1: 4

Malaysia 1: 7

Middle East 1: 10

Singapore 1: 10

United Kingdom 1: 10

United States of America 1: 7

India – Public Sector 1: 4

India – Private Sector 1: 20

Source: Mercer Consulting

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Guaranteed Salary Total Remuneration PSE Guaranteed Salary PSE Total Remuneration

Source: Mercer TRS Surveys

Bar graph – Private Sector salaries

Line graph – PSE salaries

Setting up RGIPT in association with other oil PSUs

Assisting in Govt Initiative of upgradation of ITIs by adopting few ITIs

Full Assistance in Setting up Centres of Excellence in Petroleum Studies in Andhra University ,Dibrugarh University, ETC.

Summer Trainings >1000/year

ONGCians on Academic Councils In institutes offering courses on E&P, on request

ONGC Chairs at Institutes Institutionalization and Support

R&D Projects With leading academic institutions in the country/ abroad on core E&P Themes

Industrial Tours At worksites/ Plants / Institutes/Museum

Faculty Visits & Training Material Domain Experts as visiting facultyShare information on foreign faculty

Scholarships 75 Scholarships each year to students pursuing courses in Geosciences/Pet. Engg

Compensation-5TH Biggest factor affecting attrition in 2000

Insufficient career advancement opportunitiesBetter wealth-creation opportunity elsewhereDon’t feel valued by my companyInsufficient reward or recognition

Higher salary and benefits elsewhereInsufficient development and learningInteresting, exciting people elsewhereWork not interesting or challenging enoughUnable to meet personal/family needsDon’t like the company cultureInsufficient feedback and coachingCompany’s future uncertain or threatenedChange in my career goalsLittle support for my initiativesMy supervisor is a low performerCompany has too many low performersJob causes too much stress

6967656564575755554744443838363434

(Source-Mckinsey Study-2000 of 35 Top Companies Worldwide)

Rank

Reasons for attrition Weightage

1External inequity of compensation

22%

2Limited growth opportunities

21%

3 Role stagnation 15%4 Under utilization of skills 9%5 Lack of recognition 8%6 Work life balance 6%7 Performance assessment 6%8 People Managers 5%

9Internal inequity of compensation

5%

10 Business instability 3%Source: Hewitt Study-2007

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