As discussed previously in HR Times, the US manufacturing industry faces significant talent challenges that threaten its future (see If you build it, will they come?, Uptick in manufacturing focuses attention on human capital, and Beating the skills shortage). The global chemical industry shares many of these same challenges, in particular: (1) impending retirement of older employees. (2) skills shortages among the generation that will replace retirees, and (3) the general unpopularity of the industry as an employer of choice. These talent challenges are amplified by intense changes in the industry itself, ranging from constrained margins and increasing cyclicality to activist investors and a dramatic decline in new product introductions. From our observations and experience with clients, many in the industry recognize that problems exist, but either aren’t acting with a sense of urgency or are paralyzed by the sheer magnitude of the challenge to take action to address it.
As we explore in our new publication The talent imperative in the global chemical industry, addressing these challenges will not be an easy task for executives. It could mean a dramatic shift in thinking, including moving away from traditional business and talent models that have been in place for decades. New business models are emerging to help reshape the industry, and each carries with it different implications for the type of organizational structure and talent needed to support it.
What we’re seeing
Some that want to act are daunted by the scale and scope of the effort and are hanging back, unsure how to get started or what tangible steps they can take. Others are operating “business as usual,” even when they have the capability to act. For example, succession management programs are crucial in light of the breadth of the retirement cliff. But while many companies have good programs for their senior executives, in our point of view these programs should be expanded further down into the organization (i.e., into at least upper middle management). However, for whatever reason, understanding that succession is a problem and recognizing that current programs should be expanded has not prompted action.
One of the sticking points may be uncertainty in companies about who should be leading the charge—the business or HR? In our observation, neither has the capacity or capability to take on these challenges alone, nor should they. Collaboration is essential here.
What to do
The global chemical industry is beginning a new and exciting era. The people working in it will be the catalyst to once again make the industry a leader among sectors and an attractive, exciting place to build a career—but only if executives act now to build those few but critical organizational and talent capabilities required to attract, develop, deploy, and retain the people the industry will need.