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Analysis

Career Planning to Optimize HR Performance

Wed, 01/22/2014 - 17:44

With around 155,000 employees, PEMEX’s headcount is almost double those of the largest global oil companies. Total employs over 97,000 people in the more than 130 countries where it operates, Shell has around 92,000 employees across more than 70 countries, Petrobras has 86,000 people in 25 countries, BP also has 86,000 employees in 80 countries, and ExxonMobil totals 82,000 people worldwide. While working in only one country and producing less oil than companies such as ExxonMobil and Shell, PEMEX has seen its number of employees grow significantly in the last few years, from 138,215 in 2011 to 153,233 in August 2013. This represents a 10.87% increase, which is worrisome considering that the company’s strategy does not yet include far reaching professional development programs. “PEMEX needs to start creating real career plans through a real human resources area devoted to talent development,” says Teódulo Gutiérrez, Consulting Partner of GPT and Director General of Oil Projects. “The company needs a strategy to help personnel evolve throughout the years along the various career paths that the industry offers.”

Most HR concerns in the oil and gas industry revolve around the fact that the industry is facing a generation gap. There is a lack of talent to fill the positions of the generation that entered the Mexican oil and gas industry following the development of Cantarell, which over time reached leading positions within PEMEX and the private sector, and which is moving towards retirement age. In addition, Gutiérrez believes that PEMEX is facing other concerns in its human resources area. “Only 1% of PEMEX’s employees have PhDs. For its operations, PEMEX needs specialists in the different areas of importance within the industry,” he states. “Developing these specialists should be one of PEMEX’s main HR objectives. All these factors could be solved through a clear strategy for professional development.”

After spending 19 years at IMP, Teódulo Gutiérrez became Manager of Technology and Production of PEMEX, before rising up the ranks to being in charge of operations in the South Region and becoming the Subdirector of Technology of PEMEX E&P. During his career, PEMEX E&P created a Subdirectorate of Human Resources with the objective of establishing clear career development strategies within the subsidiary. “This project’s main goal was to differentiate between the career paths to becoming a technical engineer or to becoming a technical administrator, set clear medium and long-term goals for staff,” he explains. Should employees choose to spend their whole career in the field, the program would provide options for them to continue growing and ascending in technical positions through the company’s hierarchy. However, if employees aspire to obtain a management position, a different career path would be established to develop managerial skills. As said by Fluvio César Ruiz Alarcón, Professional Board Member of PEMEX, the company must customize career paths rather than lose great engineers to administrative positions and see them struggle with responsibilities that they were not trained to handle. To do so, salary scales must be linked to transparent hierarchic levels that extend across technical and administrative positions. “This implies fixing the current scale where the higher salaries were restricted to administrative positions, and start a new system where business managers and technicians are paid equivalent salaries that correspond to their skills and abilities. As a result, an equally skilled technician tasked with technical or operational responsibilities would not earn less than an administrator, correcting internal policies that could coerce him toward administrative positions. These plans could help PEMEX regulate the human resource flow within the company, avoiding losing great engineers to administrative positions for the sake of corporate development,” says Gutiérrez. “Such mechanisms, in combination with increased flexibility following the Energy Reform and the Labor Reform, should help the company to depoliticize its HR strategy and shifts towards a meritocracy. Until now, PEMEX has been managed as a government entity and not as a company. When cutbacks are passed, they usually affect the company’s talented young workers, while the STPRM remains unfazed, since it is easier to fire them than 15-year veterans. This limits the company’s growth and leaves PEMEX short on promising technicians.”

PEMEX needs to develop close career plans with the government and universities in order to match its demand with the available human talent supply. “When the industry experiences a boom, universities increase the amount of students in its petroleum engineering programs,” says Gutiérrez. “After they graduate, a surge of young professionals find themselves fighting for a limited number of positions. This situation then has a knock-on effect for the next generation, who decide not to study similar programs due to the lack of job opportunities.” Gutiérrez says that were he still at PEMEX today, he would table the following strategy to eradicate such problems. “My advice would be to create an Integral Professional Development Division within the HR department. The first task for this division would be to clearly define the profile and responsibilities of each position. After that, they would have to draft the organizational structure of the company to delimit the positions available and their profile. This would help design long-term career planning that could be shared with universities to help them plan their programs and admission quotas.”