Last month, we attended the American Fuel & Petrochemical Manufacturers 2023 Labor Relations/Human Resources Conference in San Antonio, TX (shoutout to our CEO and CMO’s hometown!), where we heard from a variety of speakers on workforce challenges the oil and gas industry faces and opportunities for the future. The second day featured a panel discussion with Sonya Reed, SVP of HR and Corporate Communications at Phillips 66, Julia Reinhart, SVP, CHRO, and Chief Diversity Officer at Valero, and Dale Kunneman, SVP and CHRO at HF Sinclair, who all shared their best practices on how to be an effective HR leader.
While told from the perspective of a CHRO at an oil and gas company, many of these insights are industry-agnostic. Here were our five key takeaways:
1) Prioritize workplace wellbeing
Workplace wellbeing is becoming increasingly important for employers as they recognize the impact it has on their employees' productivity, engagement, and overall health. As an HR leader, you need to prioritize the wellness of your employees and ensure corporate policies and procedures reflect that.
Reed talked about how employees post-pandemic are less willing to make tradeoffs between work and life; they want more of a work-life integration now. Because of this, Phillips 66 views wellbeing holistically - from a mental, physical, financial, and social perspective. However, she points out, there is an obligation to make money for their shareholders, so they try to find a balance by investing in programs their people find the most value in, while still maintaining cost.
Reinhart mentioned how it’s important to create feedback loops to understand the impact of their employee wellbeing programs. Are they making the right investments? Do they need to shift gears? For Valero, culture dictates everything they do and how they do it. They aim to create a sense of purpose with their employees, and emphasize doing the right thing and caring for their workforce as well as their employees’ families.
HF Sinclair has developed site-specific cultures for their different refineries; this could be mimicked by other industries by cultivating office-specific cultures for different locations. Kunneman described how they empower their employees to “step up and stand out”, underpinned by their five core cultural values of safety, integrity, teamwork, ownership, and inclusion. By asking employees what they want, offering resources for mental and financial health, and developing strong cultures, these companies are able to provide a work environment that supports their employees' overall wellbeing.
2) Leverage corporate communications to reach current and potential employees
A few years ago, Phillips 66 launched a Human Capital Management report that details their employees’ experiences. The report is publicly available and has helped them to create an external-facing story and narrative for prospective employees on what it’s like to work at the company. The report also includes what the company expects from its employees, how certain behaviors shape the culture, and concludes with a discussion of total rewards. By sharing this information, Phillips 66 is able to paint a clear picture of what it's like to work at the company and what potential employees can expect from the organization.
At Valero, they have implemented an HR communications group to collaborate closely with the corporate communications team. They use their expertise in HR, compensation, benefits, culture, and training to ensure that the business is communicating clearly to employees. The group also serves as communication liaisons from HQ to HR field people and creates a standard that these employees can customize for their own offices or sites. This approach has proven to be successful in getting messages out that are tailored to the needs of local communities. By leveraging the knowledge and expertise of the HR communications group, Valero HR managers are able to ensure that their messaging is both effective and relevant to the people they are trying to reach.
3) Know what is happening in your industry
To be an effective leader, you need a deep understanding of the current trends in your industry. This requires not only a comprehensive understanding of the business, but also an appreciation for how actions and decisions can impact the broader economic system. You should be prepared to navigate a rapidly changing landscape, which includes the impact of digital on the way your organization operates, the need to optimize costs, changes in employee expectations, and how to stay competitive as an industry. By staying up-to-date on these issues, you will be better equipped to lead your team and your company’s employees to success.
Reinhart recommended that HR leaders sit in on investor meetings to better understand the company, specifically paying attention to key focus areas, like environmental, social, and corporate governance (ESG) and, for oil and gas, energy transitions. HR plays a crucial role in responding to the ESG pressures facing industries like energy, as many of these pressures relate to everyday HR functions.
For those who are new to the industries they’re working in, Kunneman recommends spending time with other departments outside HR to learn more. For example, HR leaders at oil & gas companies should meet with and observe the technology organization, as they are tackling the transition to clean energy. Additionally, as an HR leader, you should understand the challenges your industry faces, the economics behind what makes money in the industry, and be committed to your industry's mission. When it comes to energy in particular, leaders should showcase how their organization's work contributes to society and that energy is a necessity, and share stories of employees from different backgrounds who have made significant contributions to their communities.
4) Empower your people managers
“People managers have the hardest jobs in the company,” Reed stated. They need to understand the business, recognize the impact their company has on the communities it serves and exists in, and be able to lead with empathy, motivating and engaging people. Managers also require strong leadership skills and must have the ability to attract and retain exceptional talent. Kunneman cautioned that “an ill-equipped manager will stifle growth.” If your managers can’t provide prospective employees a compelling reason to join your organization, then they won’t.
So how can HR leaders help their people managers become better? Reinhart says that Valero makes sure to deliver resources and set expectations for their newly promoted managers from Day 1. Then, by month 3, supervisors go through formal classes that train them how to be effective managers. Valero has also introduced a program open to managers known as "Leader Talks," which features their high-level executives discussing how they approach leadership at Valero and sharing what they feel is important for the organization to understand.
5) Protect and invest in early career programs
Early career programs are the start of the talent pipeline. Companies need to do what they can to protect these programs even during a pandemic or economic downturn, such as going remote or reducing your program size. If your early career program gets cut, one lasting effect could be a lack of support from university faculty who could have otherwise been advocates. Professors are going to recognize that these programs were not a priority for your company and might not offer as much support when your company tries to recruit from the campus again.
Outside of simply protecting your program, your university recruiting team needs to establish a strong presence beyond just participating in career fairs. Building relationships with influential people on campus throughout the year can help to familiarize them with your company and recruiters. Integrate tours of your office and facilities, and create projects that students can participate in to help engage potential recruits and build relationships.
Reinhart shared that Valero hires 80% of its professional employees from internships; it is the main pipeline into their workforce. They also wanted to leverage early careers to attract more diverse talent, so they created their Minority Engineering Summit that brings in freshmen college students from underrepresented populations for a 4-day immersion into the company to learn what engineering is like at Valero, meet with leadership, and study refinery operations. Valero leverages this Summit as a sort of “pre-internship” program with the intention of recruiting participants into their internship program when they’re juniors or seniors.
To Conclude
Effective HR leadership requires a combination of skills and strategies that prioritize the well-being and growth of employees, and foster a culture of inclusivity, communication, and continuous learning. By implementing these key takeaways, HR leaders can position their organizations for success in an ever-evolving business landscape.
