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INTERNATIONAL HR - BULLETIN GAZPROM INTERNATIONAL TRAINING

June 2017 Issue 2

This is an International Bulletin for HR employees of PJSC Gazprom and for members of the International Business Congress (IBC) Committee “Human Resources, Education and Science”. The purpose of the bulletin is to inform employees and managers with the latest international HR news, HR developments and HR trends so that they can use the knowledge and insights to reflect on it by making HR policies and plans. This Bulletin is issued quarterly by Gazprom International Training B.V. Editorial: Victoriya Moyiseyeva (v.moyiseyeva@gazprom-international.com)

This Bulletin is for internal use only and contains a selection of previous elsewhere published articles.

Dear Reader, This is the second International HR Bulletin we are proudly presenting. This issue is fully dedicated on a theme: “The Future of Work”. I trust you find these articles of your interest. We are of course very interested in your feedback. Please don’t hesitate to contact us. The next bulletin (September 2017) will be on Change Management. Enjoy the reading, Rob Veersma, director Training Gazprom International Training.

THEME: THE FUTURE OF WORK Trends shaping the future of jobs and skills A trend is an empirically documented development which lasts for several years. Trends are usually relatively stable and less likely to be affected by cyclical changes and fluctuations, nor are they subject to sudden reversals or dramatic increases. In general, trends have a clear direction and a robust course. When extended into the future, they describe a “business-as-usual” continuation of events. It is possible to identify a number of local and global trends today which point towards forthcoming changes in business and society. Their long-term impact on jobs and skills will be significant.

For instance: • Emerging economies are acquiring stronger

representation in global production chains;

• Demographic change and migration are

changing the face of the workforce;

• Technological developments are slowly

dissolving the boundaries between sectors

and are changing traditional modes of

working;

• Organisational structures in business are

evolving and becoming more flexible and

more networked.

These rapid, complex shifts are affecting labour

markets around the world, constantly challenging the

balance of supply and demand, and labour market

and education policies.

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JOBS AND SKILLS IN 2030 A study by The Centre for Research in Futures and Innovation (University of South Wales) was looking at societal, technological, economic, ecological and political factors to identify the 13 most influential and plausible trends impacting the jobs and skills landscape in the UK to 2030:

1. Demographic change, especially an ageing

population.

2. Growing diversity, increasing representation of

gender and ethnic groups in the labour force.

3. Growing household income uncertainty and

regional inequalities.

4. Growing desire for a better work-life balance.

5. Changing work environments shaped by

Information and communications technology

(ICT), outsourcing, internationalisation and the

need for greater flexibility.

6. Converging technologies and cross-disciplinary

skills, particularly the combination of

biotechnology, information and communications

technology, nanotechnology and cognitive

science.

7. Digitalisation of production: automated

and additive manufacturing processes,

involving 3D printing.

8. ICT development and the age of big

data, the power of digital devices and

the potential to capture and use vast

amounts of data.

9. Changed economic perspectives due to

globalisation and technological change,

particularly volatility and uncertainty in the

period post the 2008 crash.

10. Shift to Asia, growing economic power and

influence of countries in the East.

11. New business ecosystems leading companies to

be increasingly defined as ‘network

orchestrators.’

12. Growing scarcity of natural resources and

degradation of ecosystems: finite environmental

resources leading to higher extraction costs and

environmental decline.

13. Decreasing scope for

political action due to constrained

public finances, as well as greater

levels of social transfers for the

aging population, limits resources

for education and skills initiatives.

The 13 trends were selected from an initial longer list which included trends deemed to have less potential impact on the labour market of 2030, including changing household and family structures, increasing borderless risks, such as global crime, and the growing importance of social enterprise.

WORKDAY 2030 Your typical workday in 2030 may begin with the smell of bacon. You haven’t left the bed in your London home yet, but your implanted biochip told the appliances in the kitchen to start making breakfast (with extra crispy bacon, please). After you get dressed, the heads-up display embedded in your suit informs you the car taking you to the airport has arrived. While on the four-hour suborbital flight to Shanghai for a face-to-face meeting with a key client, you beam into a holo-conference to talk with your Brazilian colleagues about a possible regional

acquisition. After your Shanghai meeting, you fly back to London to be with your spouse for dinner, a stir-fry your smart kitchen started preparing the moment you landed.

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THE FUTURE OF WORK IN THE OIL

AND GAS INDUSTRY In the oil and gas industry, digital is radically transforming work as we know it. Digital technologies are not only rapidly changing the practice of work, but they are also reshaping the very nature of the workforce and its work experiences in everything from hiring experiences to jobs to careers. 1. Technology-enabled talent transforms work

practices

New advances in digital technologies are

accelerating the amplification of both “muscular

and brain”, thereby enabling

altogether new ways of

performing work.

Example: Schlumberger is now

even monitoring subsea

conditions using ‘wave gliders,’

or unmanned marine vehicles,

which can travel across the

oceans collecting data for up to

a year without fuel or crew, as

they are powered by solar

panels and wave energy.

2. Digital demands – and enables – a fundamentally different workforce As oil and gas companies continue to digitize work and start to compete more on data management and analytic proficiency, it will transform the very nature of the industry’s workforce. • Researchers at Oxford University believe that

47 percent of jobs across industries could be automated over the next two decades

• According to one benchmark study, for example, the oil and gas industry needs to hire 11,900 new data analysts to meet increased demand.

Also, as digital drives increased global collaboration and greater decision making on the edges of the organization by front-line employees, it requires a new global mind-set, as well as demands that employees develop the ability to lead at all levels and rapidly experiment based on data in real time. A global mind-set is important for another reason, too: the global talent map is quickly losing its borders.

Confronted with an experienced workforce and a chronic skills shortage of engineers, oil and gas companies are increasingly sourcing scarce skills wherever those skills reside. 3. Digital drives democratized, customized and

seamless work experiences In order to attract and retain scarce talent and a new generation of workers in an industry with a reputation for being environmentally unfriendly, dangerous and prone to cyclical layoffs – as well as to improve the performance of that talent in increasingly knowledge-intensive roles – oil and gas companies in the future will have to adopt an entirely new approach to managing their people.

New advances in digital technologies now enable organizations to provide workers with more democratized and customized work experiences, including tailored learning experiences, performance appraisals, benefits packages, careers and jobs.

Conclusion To effectively compete in the future, oil and gas companies will need to fully transform themselves into digital companies that increasingly compete on talent. This requires not only radically extending both brain and brawn through new digital work practices, but also just as importantly, it demands a very different workforce, as well as a complete rethink of the work experience itself.

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TOUGH JOB Asking technology to do all the work and excluding people is a mistake. In the future of work, leaders must recognize and capture the value of all their resources to succeed. The toughest future job for a CEO is one that’s tough today: getting the most out of the workforce. CEOs will have to motivate four distinct generations: Generation Xers, millennials, Generation Zs and, surprisingly, a large number of baby boomers.

HOW COGNITIVE COMPUTING IS

IMPACTING HR Susan Steele, Executive Partner, Global Talent & Change Center of Competency at IBM discusses how cognitive computing is impacting HR. Human-like intelligence is increasingly being used in the next generation tools and applications used by HR. Data-driven cognitive systems are offering an alternative to human intuition to select employees and determine their working styles. And, HR leaders are using cognitive systems to support workforce decision making.

Cognitive computing, and its application in HR, is one of the most interesting and important areas of professional development for HR professionals. The tools available, and the speed in which they are developing, will change how HR delivers the basics to the business, as well as redefining the strategic value we add.

But what is cognitive computing? Susan Steele, Executive Partner, Global Talent & Change Center of Competency at IBM puts it in layman’s terms as: “Simply defined, cognitive computing can analyse and learn from structured and unstructured data including photos, tweets, emails, natural language, both written and spoken.” And the applications of this in an HR setting are huge. “Cognitive computing could answering pressing employee questions and requests that might be currently undertaken by a contact centre or HR administrator, for example.” It could also capture the expertise of top performers and then use this knowledge to accelerate the performance of other employees, which could have a ripple effect across the business, enhancing the speed and accuracy of data-heavy work. The key drivers for a move to cognitive solutions fall into two broad categories for HR. First, with top talent at all levels in high demand, there is only going to be an increase in the need to have the right skills, at the right time, in the right place. Secondly, as the day-to-day business of HR is becoming increasingly information-heavy (in both a data and a data source variety), there is an increasing strain on HR to deliver information-based solutions into the business. Steele says, “Cognitive computing provides new tools that create a more efficient and effective HR function

and workplace. It can be used to improve the employee experience and to customise employee touch-points.” She foresees the role of the HR manager will change as employees will be able to receive personalised advice and information from either a stand-alone cognitive HR system or human advisor supported by cognitive tools. With business managers now provided with real-time employee insights embedded in easily accessible tools such as apps, HR will be freed-up to focus on providing more strategic-level advice and build business relationships. And the same can be said for talent

acquisition. The data-driven search aspects of recruitment can be run by a system which as a far greater ability to search for and track talent. Again, this does not remove the need for HR, it changes the nature of the recruitment role. It places far more emphasis on building relationship with candidates and marketing organisations and opportunities to candidates over a longer period of time.

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There are, of course, a few challenges for companies to implementing cognitive into any function. Steele says, “Capturing the process and documentation required by an organisation, and developing change management strategies to educate and train the workforce on how best to use the power of cognitive computing will be ever-present hurdles to overcome. And, of course, time. This takes a lot of time to learn and implement.” The future of HR and the impact of technology is an increasingly 'hot topic' for the profession. Cognitive computing, and the HR solutions it offers, has the potential to profoundly change HR and the way the profession interacts with the business. Every HR leader and business professional needs to learn more about cognitive computing from both an operational and external client perspective. They at least need to understand as it almost certainly will be part of the function or business we're involved in.

WORLD ECONOMIC FORUM; THE

FUTURE OF JOBS REPORT 2017 The Fourth Industrial Revolution is interacting with other socio-economic and demographic factors to create a perfect storm of business model change in all industries, resulting in major disruptions to labour markets. New categories of jobs will emerge, partly or wholly displacing others. The skill sets required in both old and new occupations will change in most industries and transform how and where people work. It may also affect female and male workers differently and transform the dynamics of the

industry gender gap. The Future of Jobs Report aims to unpack and provide specific information on the relative magnitude of these trends by industry and geography, and on the expected time horizon for their impact to be felt on job functions, employment levels and skills.

HUMAN CAPITAL THAT HOLDS

THE GREATEST VALUE FOR

ORGANIZATIONS NOW AND IN

FUTURE An economic analysis commissioned by the firm and

conducted by the Centre for Economics and Business Research finds that human capital represents to the global economy a potential value of

$1,215 trillion. It is 2.33 times that of physical capital, which includes tangible assets like technology, real estate, and inventory. Physical capital, the analysis performed for Korn Ferry indicates, should be valued at $521 trillion today. Nothing can match the greatest asset of any organization: its people. Every dollar invested in human capital generated more than $11 in economic output

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INTERVIEW MARCEL KRAMER The future of oil and gas: Stop or GO?

How will the hydrocarbon

market change in the coming decades, which specialists will be in demand in the oil and gas industry and what should be done to ensure that

the "blue fuel" remains unchallenged? About this and many other issues, the editorial board of the international bulletin Gazprom International Training talked with the CEO of South Stream Transport B.V. in 2010-2012, President of Energy Delta Institute, co-chairman of International Business Congress Working Committee "Human Resources, Education and Science" Marcel Kramer.

On the future of traditional resources Disputes about the "new energy era" have not abated already for a good decade. Proponents of unconventional resources predict the death of countries and companies developing conventional oil and gas reserves. At the same time, fighters for alternative sources "bury" in general all producers of hydrocarbons. According to Mr. Kramer, in the coming decades we are unlikely to encounter a drop in demand for traditional energy suppliers. On the contrary, the expert believes, in the background of continued economic growth, population growth and the strengthening of large emerging markets, the consumption of oil, gas and other renewable resources should significantly increase. "Recently, in certain markets, we have seen a trend in reducing the dependence of the cost of renewable energy sources on government subsidies. This makes traditional raw materials more competitive, “says Kramer. Further technological breakthroughs in hydrocarbon production methods and power generation are likely to accelerate the development of the industry. As for natural gas, its role will also increase due to the relatively attractive environmental component and market accessibility. At the same time, Kramer believes, the cost of oil and gas is significantly influenced by carbon capture and storage (CCS)

programs widely used by energy companies in the extraction of minerals. "It is impossible to accurately assess the consequences of using these programs. - says the expert. - There are some doubts about their effectiveness. It is known that the introduction of CCS brings companies significant costs that must be taken into account if we want the "blue fuel" to remain competitive. On the labour market in the oil and gas sector Against the backdrop of technological progress in the oil and gas industry, today's and future employees have doubts about their relevance in the future. New powerful computers and modern software allow today a small group of people to perform tasks that the huge teams used to solve for years. Mr. Kramer calls not to be afraid of change, but to develop ourselves along with progress. Many of the traditional occupations in the oil and gas industry will continue to be in high demand, says the former CEO of South Stream Transport B.V. and currently President of Energy Delta Institute, and Energy and Infrastructure consultant. At the same time, in his opinion, there is already a demand for specialists who possess modern digital technologies and skills, as well as international mobility. Companies operating in the oil and gas sector are also waiting for certain changes, primarily related to the modernization and transformation of their structure. In general, according to Mr. Kramer's forecasts, despite the periodic fluctuations, the industry will retain a certain attractiveness. "As for the labour market contraction in the oil and gas business, it is connected with the principle of stop and go, which some companies use, fulfilling short-term demands of their shareholders. This, of course, affects the pace of recruitment, but it also affects the reputation and attractiveness of the company itself in the market. Future The industry in general has a certain attractiveness which may fade somewhat but is unlikely to disappear in the near to medium term. Digitalisation skills and knowledge are very much in demand in many sectors and this can be a new challenge for O&G.

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EMERGING THEMES AND TRENDS

SHAPING THE HR OF THE FUTURE

These industry disruptions are happening at a time where HR itself is also fundamentally changing across industries. We see three themes (and 12 related trends) shaping the future of HR.

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TOP 12 TO-READ

RECOMMENDATIONS ON THE

GLOBAL, VIRTUAL & FUTURE

WORK Below are the top twelve books and articles that are recommended for leading and working in the future world. They are a mix of books with practical tips & tools and books that highlight theory and insights into the bigger picture of the new world of work. 1. Physics of the Future: How Scientists Will Shape

Human Destiny and Our Daily Lives by the Year 2100 - Michio Kaku In his 2011 book, physicist Michio Kaku discusses developments in technology, medicine, and travel, and predicts inventions the world may have a hundred years from now. Among his predictions: space elevators, Internet-enabled contact lenses, and flying cars.

2. The Extreme Future: The Top Trends That Will Reshape the World in the Next 5, 10, and 20 Years - James Canton Canton, an advisor to three presidents spanning three decades, predicts future trends in business, technology, terrorism, the environment, and medicine.

3. Where in the World is My Team? - Terence Brake A very nice and unusal book told from the perspective of a virtual team leader. Via this narrative format some practical tips and ideas are given.

4. Virtual Leadership - Jaclyn Kostner A classic and one of the oldest books on this field. The author is telling the story of a fictitious remote leader who gets advice from an unusual source. The summary on the last pages alone are worth the purchase.

5. The 2020 Workplace - Jeanne C. Meister A book that explores the work place of the future, including the mega trends like Gen Y, virtual work and more.

6. Here Comes Everybody – How Change Happens When People Come Together - Clay Shirky A book that covers broader themes of digital work and the connected world. It hows how much has changed with the new technologies that have developed over the past 20 years.

7. Uniting the Virtual Workforce - Karen Sobel Lojeski Focusing on the theory of virtual distance this book shows how to build and lead virtual teams from a management perspective. Recommended.

8. The Future of Work, GE Discussion Paper, General Electric - Annunziata, M. and S. Biller.

9. Skills Requirements for Tomorrow’s Best Jobs:

Helping Educators Provide Students with Skills and Tools They Need, IDC Opinion - Anderson, C. and J. Gantz

10. Man and Machine in Industry 4.0: How Will

Technology Transform the Industrial Workforce Through 2025? - Boston Consulting Group

11. “Toil and Technology: Innovative technology is

displacing workers to new jobs rather than replacing them entirely”, IMF Finance and Development Magazine - Bessen, J.

12. “Welcome to the New Era of Human Resources –

The Function of Human Resources Departments has Remained the Same for Over 100 Years. That’s all About to Change”, FastCompany Magazine - Lindzon, J.

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THE MILLENNIAL-MANAGED

ORGANIZATION Millennials are no longer a small group of new university graduates; in many oil and gas companies, they occupy managerial roles and are starting to climb

into the executive ranks. As they rise through the organization, millennials will bring their own ideas about collaboration, accountability, and the use of technology. Leading companies will design an environment that meets the expectations of millennial leaders:

More flexible employment structures. These could include technology-enabled remote working and flexible working hours allowed by a results-oriented mind-set. Another trend is on-demand sabbaticals to support personal development via education, leisure, or time with family. Moreover, an attractive workplace will include alternative career paths with more rapid progress cycles (40 percent of millennials expect a promotion every one to two years), horizontal career moves, and a flexible take on career progress, with temporary step-downs.

A new working environment and culture. This could include the application of social-media tools in the corporate setting. For example, NASA, the Royal Bank of Scotland, and Virgin, among others, already use social networks such as Facebook, Slack, and Yammer instead of traditional intranet and file-sharing tools.

A positive external footprint. Millennials don’t just want personal career growth; they expect to make a positive contribution to society. However, 14 percent of millennials say they would not want to work in the oil and gas industry because of its negative image—the highest percentage of any industry. If companies

want to attract the best and brightest, they must design ways for employees to make an impact beyond the walls of the company.

PARTING

THOUGHTS Imagine the caveman who invented the wheel claiming his kids and grandkids are lazy and entitled because they ride bikes. Imagine the caveman who harnessed fire to cook meat claiming his kids are wimps because they don’t eat raw meat. Now, imagine a kid back in the

day being asked by his dad to stand up from the couch and go change the channel on the TV by turning the dial. Then, imagine this same kid growing up and becoming a dad himself. Now, imagine this dad has a remote control in his hand. The dad asks his kid to get up off the couch and change the channel on the TV. His son says, “But Dad, you have a remote control in your hand. You can just change the channel by clicking that button.” The dad looks at his son and instead of saying “thanks!” and changing the channel, he sets the remote down and gives him a lesson on talking back, the value of hard work and then calls him a name and forces him to get up and turn the dial on the TV. The only problem for the son is that…there is no dial on the TV anymore. That’s what is happening in our workplace today. THIS is the conflict. The youth aren’t lazy, they’ve been given technology by previous generations and they know how to leverage it.

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VIRTUAL LEADERSHIP In today’s global economy, virtual teams are a fact of life. Virtual teams are increasingly becoming the life-blood of most companies: they tend to undertake the most global, strategic and complex projects. They have the strong advantage of gathering the best people for a specific task independent of their geographical location in a sort of ‘Just in time talent’ approach. Knowing how to develop and maintain high performing virtual teams has become a critical competitive advantage now, and even more in the future. Following are five areas where virtual leaders need to focus energy in order to lead effectively. 1. Communication – Although

leaders and team members are not in the same geographic location and cannot have a face-to-face conversation, effective communication is a key to success. The virtual world offers many different means of communication. These can include phone calls, emails, text messages, instant messaging, and video conferencing.

2. Trust – Developing trust in a virtual environment

is not as easy as walking down the hallway or going out to lunch to chat, with your team. When building virtual relationships with team members, relationships are built at the individual level. It will be vitally important to have an open and honest relationship with a lot of feedback. A virtual leader must be willing to make themselves accessible and available to their team members.

3. Clarity – Team members must have a clear

understanding of what is expected of them. A shared understanding of the objectives, ways of working, dealing with performance should be addressed.

4. Support – Virtual leaders need to understand

that working in a virtual environment can be “lonely” at times for team members. They do not have the energy and excitement that is created from working in an office with other team members. As a virtual leader it will be very important to know how team members are doing emotionally.

5. Empowerment – Team members must feel they have the ability to exercise authority to ensure they can complete their assigned responsibilities. There could be quick decisions to be made without time to go through the communication challenges that virtual teams inherently face. Leaders must allow team members to make decisions and support the decisions that are made.

As virtual teams become more and more prevalent, focus on effective virtual leadership will also grow. As leaders transition from traditional teams to virtual teams, many of their attributes and skills that made them effective leaders will transfer over, but it is important to look at how the miles separating leaders and team members will cause some adjustments to their leadership style. The more effective leaders are at leading a virtual teams, the more they can take advantage of the many benefits virtual teams bring to an organization.

MULTIPLE CAREERS From Wikipedia, the free encyclopedia Whereas a career comprises the work activities that can be identified with a particular job or profession, having multiple careers is the growing trend in the late 20th century and early 21st century. These multiple careers can either be concurrent (where a worker has two simultaneous careers) or sequential (where a worker adopts a new career after having worked for some time in another career). Both may occur for different reasons. Sandra Kerka (2003) reports that "'studies in the United States at the end of the seventies already

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showed that between 10 and 30 percent of the economically active population had experienced at least one career change in a 5-year period'. Workers can adopt concurrent multiple careers for a host of reasons including: economic (such as poverty or striving for additional wealth), educational (such as multiple degrees in multiple fields), or personal (such as interest or lack of fulfilment in one career). Workers with sequential multiple careers adopt a changing professional identity over time. Thus, a worker may devote 10–20 years of his/her life to one career and then switch to a related career or an entirely new one. As life-expectancy increases, as retirement benefits decrease, and as educational opportunities expand — workers may increasingly find themselves forced to fulfil the goals of one career and then adopt another. Some view this as an opportunity to expand meaning and purpose into later life, while others see this trend as an unfortunate economic and social reality.

MILLENNIALS EXPERT GIVES

STARK WARNING TO GLOBAL OIL

AND GAS SECTOR: UPDATE

APPROACH OR LOSE FUTURE

WORKFORCE Millennials expert Ryan Jenkins is warning the global oil and gas industry that it is on the brink of a dangerous ‘war on talent’ which will see young people becoming disengaged and moving into other sectors within just a few years of employment. He is urging organisations to adapt modern technology and methods to attract, train and retain young people to ensure the workforce of tomorrow also develops into a safe and competent one. Jenkins, a world-renowned expert and published author on the topic of millennials, will deliver his stark message during his keynote

presentation at the annual OPITO Safety & Competence Conference (OSCC 2017) which is being held on 8th November and at the Royal Chulan, Kuala Lumpur in Malaysia for the second year running. Jenkins speech will set the tone under this year’s theme ‘New Generation, New Thinking’. He will uncover the unique culture of those born between 1982-1997, what influences and attracts them to stay with companies, as well as revealing examples of global organisations successfully building a stronger future. Jenkins said: “A war on talent has begun in the global workplace and the oil and gas industry is at the threshold. The millennial generation makes up the lion’s share of personnel across companies with 66% of them expecting to leave their current employer by the end of 2020. This makes attraction and retention amongst the greatest challenges for businesses today. “Companies must not only battle against competitors to be the most appealing to this generation, but they must also give serious consideration as to how they engage with them, the technology young people use, and how this group views and equates success at work. OPITO interim chief executive officer John McDonald said: “The next generation has grown up in a hi-tech, fast paced, interconnected world and as an industry, we need to look at how we can further embrace these methods and gadgetry advancements whilst maintaining standards.

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