Exhibit 1: 360^o view of key disruptors facing the GCC chemicals and petrochemicals industry

In all practicality, the future of work for the chemical industry goes beyond the impact of digitization on jobs. Based on our global talent trends survey, less than 19% of the chemical companies have seriously initiated internal discussions on this topic. Looking at Exhibit 1, it is clear that change is imminent, and some disruptors have already started to materialize. Developments concerning customer interaction models, circular economy, downstream integration and commercial excellence have already impacted the global chemical industry and are making their way to the GCC. Regional players that would start thinking about their capabilities and Human Resources upskilling in light of these disruptors would be able to harness significant shareholder value from those disruptors. Focusing on the digital disruptor, while some global chemical companies have started to make headway and are adapting and building capabilities around their digital transformation, the industry as a whole is still undergoing an exploratory journey. The GCC chemicals industry could enhance the collaboration with its global peers and digitally advanced suppliers to build capabilities around their digital transformation.

As such, we believe that in order to increase the level of preparedness, the industry would need to approach the future of work through a holistic Human Resources framework. (See Exhibit 2)

To bring this framework to life we provide a few examples that address some of the main human capital related discussion points in the chemical industry. First, the talent strategy and forecasting dimension’s main focal area is the impact of digitization on job content and requirements. Rather than the traditional talent forecasting process with a one-year timescale, companies should research the longer-term impact of internal digitization journeys and external trends in areas such as technology and society. Examples of are digital transformation in sales through blockchain contracts and digitized supply chains, as implemented by major industry players like Shell and BASF. In addition, societal perspectives on sustainability are clearly shifting and constitute a trend which is here to stay, hence analyzing developments with regards to topics such as circular manufacturing will be equally important.

Strategic, future focused talent forecasting informs the next dimension of talent acquisition and development. Human capital functions responsible for these areas need to strategize about whether to attract new skills, or develop them internally, and segment these decisions across teams, business units and geographies. Specifically for the GCC, the geographical factor is important. Despite nationalization efforts, the reliance on a skilled expatriate workforce is here to stay in the near future; hence, key in “future of work thinking” remains the identification of target skills segments for the GCC petrochemical industry and corresponding talent supply markets. A current state analysis of these supply markets for the chemical industry is shown in Exhibit 3. For example, currently the Indian market is more attractive than Indonesia, however this situation could be different in the future. Moreover, it is certain that our ever faster changing world will lead to a more complex talent acquisition and development landscape, and HR staff in these areas will require enhancing their own digital proficiency in order to manage future requirements.

Exhibit 2 – Dimensions of Future of Work (holistic view)

Exhibit 3 – Competition for critical chemical sector talent across key markets

When we have identified the key skillsets to acquire or retain and develop internally, the question remains how to do so, which requires a future focused employee value proposition (EVP).  The global petrochemical sector, as is the case with many industrial sectors, is going through a challenging time in terms of employer branding, specifically concerning younger generations. Where in the past, good pay and benefits and guaranteed career tracks were sufficient to attract and retain high potential talent, nowadays shifting attitudes and competition from other industries, as well as various GCC countries’ vision programs, are forcing companies in the sector to review their value proposition. A future focused EVP should include both a thorough current state assessment of the employer brand and employee preferences, as well as a prediction of likely trends in perception and preferences of our critical talent in the next years and beyond. One of these trends, which returns repeatedly in Mercer’s annual talent trends surveys, is flexible working and over 60% of participants in the recent GPCA webinar on the future of work indicated this is the top lesson learned from COVID-19 that their company is looking to sustain. Perhaps, despite its devastating impact on our society, the pandemic has opened up opportunities for the GCC chemical industry to embrace flexibility.

It should not be as a surprise that Mercer and Oliver Wyman believe the GCC chemical industry has a tough road ahead when it comes to institutionalizing the future of work concept among its HR capabilities. While we do not believe the sector needs to be at the forefront of global developments and invest as much in this area as finance or “tech” given the pace of change in these industries, 43% of the participants in the recent GPCA webinar assessed regional chemical companies as “reacting to the present”, rather than “shaping or accelerating the future”.  Such findings are in line with our assessment of the industry, and we see them as a call to action, urging companies to start analyzing their maturity level with regards to the 11 dimensions introduced in this article. Naturally, every company operates in a different environment and has different budgetary constraints, but as a first step, we advise to start building HR analytical capabilities. These are the foundation of any future of work journey and backbone of any strategic approach to workforce planning and forecasting. As is the case across all business areas, digital proficiency needs to be embedded within HR functions to stay ahead of the game.