Lewis Adams
Principal
Heidrick & Struggles
/
Insight

Energy Sector's Success Depends on Domestic Talent

Wed, 02/24/2016 - 10:08

In order for emerging economies like Mexico to sustain growth and development in the wake of the Energy Reform, substantial enhancement of human capital is required. If this is handled correctly, the country will inevitably attract more investment. As the energy landscape continues its metamorphosis, executives within the sector are doubtful about finding the right leaders to address the growing issues and opportunities confronting the sector. For Lewis Adams, Principal in the Mexico City office of Heidrick & Struggles, “Mexico does not have the capacity to cover the sector’s future demand for specialized human capital. It is likely that there will be a huge deficit within all levels of expertise, not only in leadership and management, but also in engineering and technical positions.” As a provider of senior-level executive search, culture shaping, and leadership consulting, Heidrick & Struggles aims to play a fundamental role in mobilizing this necessary talent. By following the current trends impacting the renewables sector through its Alternative and Renewable Energy Team, the company obtains the knowledge required to help Mexico adapt and thrive through its transitional period in this industry.

Adams knows that in order to be successful in Mexico, companies have to understand the domestic market, the culture, and the local procedures in the country. “As Mexico is not able to satisfy the human capital demand, Heidrick & Struggles will be looking for international candidates to fill the executive voids while the Mexican energy market grows,” he explains. “By communicating with partners and various sector leaders the company is able to identify global trends and practices that need to be understood by all executives operating in Mexico.” Although Mexico has started to move away from hiring expatriates, Adams predicts that this trend will return as talent becomes more scarce. In terms of the energy sector, potential candidates are expected to come from Venezuela, Colombia, and the US, although attracting the latter will be difficult because of the country’s natural gas and energy boom.

Adams considers that opportunities exist in terms of growth; multinationals will attract more investment, motivating growth from local Mexican companies. “We are focusing on how to develop Mexican leaders and how to fill the gaps in their experience so they can become global leaders in the Mexican market,” he remarks. “However, compensation structures are still lacking.” Regardless of these factors, there are very few countries which can lay claim to a market as open as Mexico’s, while also providing so many kinds of energy sources, from renewables to hydrocarbons, which presents a significant advantage for the sector.

For many developing and emerging markets, despite their growing and relatively young populations, the lack of available talent is one of the biggest obstacles to future growth. Many people are working in Mexico with considerable expertise on renewables, but the majority of these are expatriates with more than a decade of experience. In the short-term, the country will have to continue importing talent, but at the same time, it needs to properly invest in younger talent to encourage knowledge transfer so that domestic talent can eventually take the reins. This challenge will demand massive financing for education and training, as well as increased talent planning within companies and other measures designed to attract and retain both domestic and international talent. “We want to contribute more in terms of attracting talent, ensuring good succession plans are in place, transferring more knowledge, and helping Mexican companies develop the cultural shape needed to succeed on the international stage. To do so, we are building strong links in locations where renewable energy is more developed so we can eventually bring more skills and expertise from those areas,” comments Adams.

The risk of talent shortages is exacerbated by the fact that Mexico is entering a new stage in its development. “Mexico still only represents a relatively small part of the renewables side of our organization, but that will soon change,” Adams reasserts. “In order to succeed in today’s competitive business environment, companies must aggressively manage their talent to ensure the right people are in the right place at the right time. We want to work directly with Mexican companies to recruit, develop, and retain talent to help our clients build transformational leadership teams designed for seizing opportunities in Mexico.”