Workforce turnover challenges chemical companies as retirement surge looms: report
Jun. 7, 2016 - North American chemical companies are facing workforce turnover issues, which unresolved, could result in more unplanned operations disruptions, more hiring and training costs and more efforts to maintain safety, according to a new survey by Accenture and the American Chemistry Council (ACC).
Released today at the council’s annual business meeting, the survey finds chemical companies are facing a “shortage of experienced workers and must replace a substantial number of retiring baby boomers in the coming years. More than 20 per cent of the chemicals workforce is approaching retirement in the next three to five years, said 40 per cent of respondents.” Roughly one quarter of North American chemicals companies retained 90 per cent or more of their millennial employees hired in the past three years, while most saw a 30-50-per-cent attrition rate among millennials.
“If the aging workforce issue is not resolved in the next three to five years, 86 per cent said the chemical industry’s profitability will suffer significantly. This includes 49 per cent of chemical companies that agree and 37 per cent that strongly agree with this point of view at a time when industry expansion is expected to continue in North America,” noted the survey.
Accenture and ACC say the challenge for some is keeping millennials for long, productive careers in an industry considered “old,” despite its track record of tremendous innovation.
“Companies in all industries have a range of generations in their workforce,” said Julie Sweet, Accenture’s group chief executive – North America. “We find that across generations, employees all want interesting work, an opportunity to make a meaningful contribution and a balanced life. By focusing on transparency, providing a hyper-personalized employee experience centred around these values, and providing a feedback loop to keep close to their people, companies can attract and inspire the best people across the generations.”
Other report findings include:
• Most chemical firms compete with peers for personnel, filling open positions mainly by hiring from other companies in the industry; 52 per cent of chemical companies reported hiring professional talent from competitors.
• New technologies are transforming the workforce — nearly two-thirds of respondents said half or more of the workforce is changing compared to three years ago due to the advent of “new skills, automation, robots and cognitive agents. Most (78 per cent) expect further change due to digital technologies automating jobs, causing moderate (56 per cent) to significant (22 per cent) workforce reductions, though more skilled support jobs will be needed.”
“When you sum it all up, we are fighting the war for talent on many fronts,” said Inga Carus, ACC board member and chair of Carus. “We must not only hire the right people as older workers retire and transfer their knowledge to a younger work force, we must bridge the gap with millennials and get them excited about what we do with chemistry as we develop new products to meet the needs of their generation.”
“While all of these workforce issues exist, 60 per cent of chemical companies said they are adapting to digital technologies, but with some resistance,” added David Yankovitz, managing director and chemical practice lead for Accenture. “They also recognize a greater need to embrace digital technologies to gain a competitive advantage. So as the industry overcomes this resistance and advances a people-first mindset to bolster the workforce, success will come in many areas from the production plant to the back office to the market with new products and services.”
Survey results were compiled from more than 500 chemical industry respondents, including 112 Canadians, from this April-May. Accenture and ACC say more than 80 per cent of the companies who answered the survey have annual revenues of more than $1 billion.
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