Our Founder Dean Hunter recorded a video during the Covid-19 crisis specifically aimed at the Oil & Gas sector, giving them some practice HR tips and advice.
Hi everyone. It’s Dean at Hunter Adams. I hope you’re safe and well. So this week I want to focus in on the oil and gas market. Still a very key sector for us and a sector that has spent the last 20 years of my career and none of us expected to be back in lower price so soon after the last recession and the lack of demand due to COVID 19, certainly hasn’t helped. So I’ve been having a lot of calls with business leaders and owner managers around the current oil price and their thinking about their businesses moving forward. So what I wanted to do today was to share some practical do’s and don’ts that may help you in your day to day business.
So let’s start with the do’s, and I always start with communication. We need to communicate the good news and the bad news. There’s no point in only showing the upside and then having to have an out-the-blue conversation that we’re in trouble. So however difficult it is, if you need to script it, if you need to chat it through with somebody, that’s fine; but it’s really important that we are open with the teams about the possible downsides as well. So I would encourage you to invite proposals from your staff, if you need to reduce costs. They will always come up with ideas and you may be surprised what they’re willing to do in terms of salary cuts, benefit reductions etc. – because they’ll all be interested in sustaining jobs. Before you do that, obviously, you need to demonstrate that you have looked at government schemes, you have looked at your cost base. Whether it’s offices, indirect cost travel and everything else.
I think it’s really important as a business leader right now to look at a period of time. So I’m picking up my phone every morning and looking at the oil price, but really you need to look at that oil price over a period over the last, I guess, two weeks it’s gone up 50%, but if we look over the last six months, it’s reduced by 50%. So you do need to look at a period of time and that’s important with your company accounts as well. We can all have a bad few months, but is it going to get better? When is it going to get better and when’s the work going to come in? That’s going to help us make some sound decisions. We need to really de-personalize these current times. We can’t control COVID 19, nor the oil price. So even though you are responsible for paying people’s salaries, it’s not your fault.
I’ve been in a position before where I felt very much responsible. So you need you to take some time out for yourselves as well. You’re also isolating in addition to trying to manage all of this at the moment. So it is important to keep speaking, talk to other business leaders, give us a call, but talk through your thoughts and your planning for the way ahead. Look at your strategy. Is it still valid? We should be thinking here about new markets, new products, new services. Do we need to change the way we’re doing things so that we have something that is more attractive to the market, or to a new market. That certainly was our lifetime when we diversified into other sectors.
Outsource non-core activities. Are there activities that you’re doing that could be done on an ad-hoc basis two days a month, three days a month? This is something certainly worth looking at as well.
Ultimately, a big ‘do’ for me is support your managers and help them to step up. I know that the last thing you may want to spend money on at the moment is training, but it doesn’t need to cost the earth. There’s a lot of training available out there and I’m sure you could do a lot of it internally as well. Your managers will be your secret weapon to getting the business back on track.
Now let’s talk about the ‘don’ts’. So the main don’t for me is don’t take somebody into a room and tell them that they’re finishing up today with no process. Many of the times I speak to clients about this, their response (which I understand is) I don’t want it to be all legalistic. I want to be nice to them. So I’ve taken them into a room I’ve been really kind, but it’s actually backfired.
Your staff aren’t going to thank you for that because it’s a very emotive process if you reach redundancy. Equally, you want to get a good balance between following the process and remembering the person in that room is a part of your team. It’s not always easy to get that balance. So, talk to us about it. Talk to other business leaders about it, to people who have managed the process before. Try not to treat your management different to staff. I think the first thing I’ll do, if I look at cost reduction, is I’ll look at my own package or the package on my management team and we will communicate to the staff what we’re doing. It just opens up the ability to start conversations about other forms of cost reduction, but management should not be sheltered from any changes.
Let’s not forget about engagement. As I’ve already said, when we fear the future, we tend to close down and not talk about what’s wrong and what’s going on. By engagement, I mean the things that frustrate your team, and they’re often not the big cost ticket items. It’s normally about communication, flexibility. We know through organizations, such as Gallup, that a third of your payroll bill is going down the toilet when you don’t engage your staff. In a company of a hundred people that can be 650K a year, which means you’ve got too many people as well if your team are 70% productive. So ask how they’re feeling, ask what their issues are and try and address them where you can. Don’t forget about the company culture because the chances are you’re going to get through this and you’re going to look back on it and you’re going to grow again and you’re going to have to re-hire.
So the way in which you manage cost reduction and redundancy in these times is going to be seen by everybody inside the company and by a lot of people outside the company as well. So what I’d like to do is offer the opportunity. If anybody wants to be connected to other business leaders, we can facilitate that. If you want to have a chat about your own business situation at the moment, free of charge, of course, then please drop me a line at Hunter Adams.