Organisational background

This oil company is engaged in oil and natural gas exploration and production worldwide, as well as in refining, marketing and transportation of petroleum products in the UK. Its headquarters are in Texas, USA, and its European operations are based in Aberdeen, Scotland.

The Aberdeen office employs around 200 workers and a further 200 employees who work offshore. In the past 15 years, the number of contract employees has increased, mainly to reduce costs. The company also employs some non-contract employees, for example, consultants who work part time. Its organisation is less hierarchical than it was 15 years ago, largely due to the introduction of changes similar to those in its parent company.

The company maintains policies on equal opportunities and diversity. Unlike the policy implemented in its US-based parent company, which focuses on ethnic diversity, the policy implemented in the UK offices relates to diversity in terms of ethnic origin, religion, age, gender, state of health etc. Older employees are highly valued, particularly experienced engineers, who are the main strength of the workforce.

Employees are not represented by a trade union. The company ensures that social dialogue between management and employees is favourable, so that a trade union is not required. About six months ago, however, the company formed work councils, where elected employee representatives discuss issues that concern them with the management.

The original initiative

The original initiatives, which were introduced 15 years ago, related to recruitment processes, training, flexible work arrangements and pension schemes. They were introduced mainly to reflect the company’s general culture, which is based on equal opportunity, and its awareness of the ageing workforce, even though a recession at that time meant that ageing was not then considered a central priority.

Some of the initiatives, such as the non-discriminatory recruitment process and flexible work arrangements, have remained the same, while others have become more sophisticated. Most changes originate from the US parent company, whose lead the UK company has followed in making the organisation less hierarchical and in promoting age-management policies.

The results of the new initiatives seem to be positive. For example, many senior employees want to participate in the revised mentoring scheme. Flexible work patterns, such as job-sharing for older employees, are also very popular. The recruitment strategy, which emphasises the importance of keeping the business in Aberdeen, has succeeded in retaining many employees who would be unwilling to transfer elsewhere in the UK.

Good practice today

As well as the original initiatives regarding recruitment and flexible work patterns, which remain in place, the company has implemented the following measures, many of which benefit older employees directly.

• Health and well-being: These are very important in the oil and gas industry, which by definition entails hard physical work. The company provides workplace health assessments to resolve common health problems like back pain. There is also a doctor available on site to review existing health problems and to intervene when serious health incidents occur. In addition, the company offers annual medical examinations for employees aged over 50 years, in order to prevent work-related health problems.
• Wage policy: The company holds a peer review in the first quarter of every year. Wages are more or less standardised but employees who do their jobs very well receive an annual incremental wage increase until retirement. This means that, although the company structure is no longer hierarchical, employees can still advance, especially if they are flexible and willing to move to different work areas.
• Changing attitudes: The company provides diversity training to ensure that all employees respect and support diversity in the workplace, not only in relation to ethnic origin, but also to gender, age, religion, health status, etc. The company just finished the first phase of this training, which focused on awareness-raising. It is currently designing the second phase, which will look at how to put this training into practice in the workplace.
• Career management: Until recently, the company did not have structured plans for reviewing employees’ career progress. However, about two years ago, it set up human resource committees that meet four to six times a year and that, with the help of the department managers, review each employee’s performance and create succession plans for key positions. They also review separately employees who are capable of advancement, and create development plans for them. The plans include identifying what the company must do to contribute to each employee’s development.

A changing labour market in which fewer younger people are willing to work offshore, thus making older employees particularly valuable, is one of the main reasons for such initiatives. Also, because the parent company in the US implemented these initiatives, it recommended that the Aberdeen office do the same. However, the main driving force for the career-management initiative was a lack of career progression during the past decade, which led some employees to resign. These resignations alerted the company to the problem and prompted it to introduce the career-management initiative, to help retain employees.

Although the work councils are too new to have influenced the initiatives, the company plans to discuss the design and implementation of future initiatives with them.

To date, the measures have yielded positive results. All employees particularly appreciate the diversity training and the career-management initiative, which they say makes them feel respected and valued by the company. Further proof of success is the fact that several older employees were transferred to different areas within the company and also promoted. This shows that although they could have left with a full pension at the age of 60, they preferred to stay on with the company.