The Case for EX in Energy (Part One)

Customer Experience

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November 28, 2016

As the environment in the US grows even more competitive, established oil and gas firms are improving their customer engagement and satisfaction by creating seamless interactions with the organization for the customer – from billing to service to sales. Concurrently oil and gas companies have been seeking novel ways to attract, engage, and retain employees. Oil and gas firms are turning inward and focusing on enhancing their employee experience as a differentiator for attracting, engaging and retaining talent. Employee experience embodies the organization’s ability to connect to an employee’s reason, emotion and purpose across all interactions both internal and external.[i]

Put employees first and prioritizing employee experience may feel overwhelming, especially given the prevailing economic conditions and pressures the oil and gas industry faces. Low commodity prices for oil have resulted in decreased profit margins, intensifying competition, and a decline in growth in developing new oil reserves. (See Exhibit A)[ii]  Despite current depressed prices, the outlook for the industry is positive as global demand for oil is strong over the next five years.  (See Exhibit B)[iii]

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Companies have responded to the economic downturn by focusing on cost reductions and optimization of its business through utilization of new technologies and techniques, changing processes, reducing development times as well as decreasing business expenditures.[iv]  From a people perspective, firms have carried out numerous layoffs to address business needs and reduce overhead.[v]

During an industry downturn, layoffs and cost reductions are the first line of defense. However, layoffs come with numerous adverse repercussions such as decreased morale, decreased productivity, increased labor lawsuits, and an overall decrease of trust in management and the company.  Employees are grateful to have a job given the tight job market but are not expending discretionary effort into their work or the company. Employers often misunderstand the need for financial security (albeit insecure) as commitment and engagement with the organization.  However, the reality is that employees have lost trust in the organization and without trust engagement is shallow. Employee trust has been eroded by short-sighted top-down actions that have not been employee-centric—from friends and co-workers losing their jobs to working environments that are less than desirable. The erosion of trust hurts business performance. While employees are faced with the fear that stems from uncertainty, organizations need to move beyond current misguided approaches of engagement and embrace an employee-centric approach that weaves engagement into every message and interaction in order to drive improved business performance. For example, messages should be tailored to employees and there should be opportunities for the employee voice the input and co-create solutions intended for them.

So, why does employee experience matter? An employee’s experience with the organization fosters engagement or spoils engagement. A five percent increase in employee engagement is linked to a three percent increase in revenue growth in the subsequent year.[vi]  As an added incentive, organizations where employees are engaged in their work are safer places to work.[vii]  Engagement helps reinforce the culture of safety which is critical in the oil and gas industry. During a time when many organizations are focused on cost-reduction, there is an opportunity to innovate and focus on creating value for the stewards of the organization—those working to ultimately achieve the company goals. Creating value and desirable experiences for the individual employee fosters engagement which in turn creates value for the organization as employee and employer are aligned and interested in achieving common goals. North Highland recognizes Employee Experience as a key differentiator and will share practices firms can leverage to better position themselves to attract, engage and retain talent in part two and three of this blog series.


[i] Morris, L., Roylance, J. & Sherrell, R. (2016). Employee Experience Redefined – Driving Growth and Differentiation Through a New Kind of Relationship. North Highland.

[ii] Witter, D. (2016). IBISWorld Industry Report 21111. Oil Drilling & Gas Extraction in the US. Retrieved September 15, 2016 from IBISWorld database.

[iii] Sieminski, A. (May 11, 2016). International Energy Outlook 2016. U.S. Energy Information Administration, slide 7. Retrieved September 15, 2016 from http://www.eia.gov/pressroom/presentations/sieminski_05112016.pdf

[iv] Krauss, C. (May 11, 2015). Drillers Answer Low Oil Prices With Cost-Saving Innovations. The New York Times. Retrieved September 15, 2016 from http://www.nytimes.com/2015/05/12/business/energy-environment/drillers-answer-low-oil-prices-with-cost-saving-innovations.html?_r=0

[v] Molinski, D. (April 14, 2015). Oil Layoffs Hit 100,000 and Counting. The Wall Street Journal. Retrieved September 15, 2016 from http://www.wsj.com/articles/oil-layoffs-hit-100-000-and-counting-1429055740

[vi] Aon Hewitt (2015) from the NH POV piece

[vii] Rigoni, J. & Nelson, B. (May 24, 2016). Engaged Workplaces Are Safer for Employees. Gallup. Retrieved September 15, 2016 from http://www.gallup.com/businessjournal/191831/engaged-workplaces-safer-employees.aspx

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