Women in Oil and Gas
Having more women in leadership positions gives companies a competitive advantage, according to McKinsey. Businesses in the top quartile for female leaders are 15% more likely to score above-industry-average returns.
Yet oil and gas (O&G) companies are struggling to attract, retain, and promote female talent. And as talent drains from the industry thanks to an ageing workforce and waning interest among young people, while demand for next-gen skills like AI, robotics and machine learning increases, the lack of women may affect not only companies’ ability to compete, but their ability to function at all.
In a survey of 250 O&G companies, McKinsey found that only 15% of workers were women, half the companies had zero women in senior leadership roles, and a third had only one. Of 19 STEM industries, O&G came second to last in female participation in the C-Suite, and last of all at entry level, where only a third of entry-level workers are women (the average across STEM industries is 41%).
While a shortage of female graduates in relevant fields is partly to blame, it doesn’t explain why that third shrinks – and faster than in other industries – with every step up the career ladder.
The hurdles where most women fall are promotion to management and promotion to senior vice-president (SVP) level. Female participation drops by 31% from entry level to management, versus 22% in STEM as a whole.
One issue here, according to the survey, is that promotions at this level often include international or remote job assignments, and since the burden of childcare falls disproportionately on women, they’re often not in a position to take these opportunities early in their careers when their families are young.
This then has a knock-on effect on their whole future in the industry. Downstream-only and integrated exploration and production (E&P) companies have two to three times more female leaders than upstream companies and oil-field services, which are more likely to send new managers to far-flung frontline operations, and to expect senior leaders to have successful experience in this area.
And those women who do work in operations face particularly tough barriers to advancement at every level. They hold only 2% of C-suite positions.
Unconscious bias could also be a factor. One exec spotted a concerning lack of women in a list of “high-potential” employees – and found that there were plenty of women with comparable performance scores in the company, but they’d been left off the list.
The loss of so many talented women early in their careers creates a “hollow middle” that makes it harder to find capable and experienced women leaders to promote to the C-suite.
And women who make it to vice president face even higher barriers to promotion to senior vice president. The fall in female leadership from VP to SVP level is 38% in O&G, nearly twice the average.
At this point, the lack of fellow women to network with is likely hurting their chances, as is a piece of cultural bias that sees talented women shunted into staff roles because they’re seen as “better facilitators and leaders”. One senior woman revealed that she had to fight to stay in line roles: “If you did two staff jobs, you’d never go back to line.”
The lack of promotions from VP to SVP has led to a massive attrition rate, with women almost three times more likely to leave at SVP level than men. In other STEM industries, there’s no gender difference in the attrition rate at this level.
What can companies do?
Companies need to address this issue at three main points. The first is entry-level and before. O&G companies have an image problem; many young people don’t understand that by joining them, they will be playing vital roles in the green energy transition. Outreach needs to address this and to focus aggressively on recruiting women graduates in the fields where new talent is most needed.
The second level is the promotion to management. Where practical, developing alternative career paths that don’t demand postings to distant locations will be vital to retain more young women. The rise of remote working makes this more of a possibility. Communicate to young workers that flexible careers are possible, and ensure that the numbers of women considered for promotion reflect the numbers in the employment pool.
The third level is the promotion to senior management. Provide women at every level with access to female role models. Consider what it takes to advance to the C-suite in your specific company, and which of those requirements you’d be willing to adapt to level the playing field for women. Then support them in doing what it takes. For instance, if you decide experience in operational roles is a must, help and encourage them to take those roles.
Beyond these three levels, you also need to lead the leaders. Educate your top execs, board and stakeholders on the importance of hiring and promoting women. Create quantifiable performance indicators that are not focused on numbers of hires or promotions but on how much you’re doing to help women advance, such as unconscious bias training, mentoring, and considering fair proportions of men and women candidates for promotion.
At this time of unprecedented change, oil and gas companies can’t afford to lose out on the problem-solving power diverse perspectives bring. Including more women at every level will benefit everyone in the industry – including the men.