Attracting the Next Generation of Commodities Talent - Q2 Market Review

For ambitious young professionals who want to contribute to the energy transition, the commodities sector offers the chance to make an impact. Yet the industry faces a challenge in attracting and retaining the next generation of graduates. How can commodities employers change perceptions?

HC Group's Managing Partner, Paul Chapman, explores solutions in our Q2 Market Review. You can also find the latest talent trends for major commodities areas; data visualisations; and People Moves, showing which professionals are changing careers.

As a search firm, our expertise is sourcing experienced commodity professionals. That task is made all the more challenging by the dearth in mid-level talent consequent of the lack of hiring and loss of talent in the sector in the 2010s. This poses a real risk to growth for the sector when it is most needed to manage the ongoing and, in my opinion, long-term volatility in the sector.

The sector faces a graduate issue due to foundational problems. Commodities are cyclical, creating generational gaps during downturns as hiring stalls and people leave. While this has been a longstanding issue, there are deeper concerns. Twenty-five years ago, the sector attracted top graduates from leading universities, led by companies like Enron, but this trend has waned in recent years.

Beyond cyclical issues, the sector is relatively secretive. Worse, it suffers from a reputation driven by the only press often being negative. The energy transition further discourages graduates from choosing oil majors or trading houses, despite the rewarding career prospects widely acknowledged. Another challenge is the highly consolidated sector. Participant numbers have significantly decreased since the last super-cycle due to lower returns, increased costs from regulation, platforms, and assets. Thus, seats for aspirants remain scarce. This consolidation also extends to education, with only a handful of universities worldwide offering commodity risk management courses. Hedging is seldom taught in MBA programs, leaving graduates unprepared and unaware of opportunities in the sector.

Finally, the worrying trend globally is increasing market intervention by governments. Fuelled by populism, nationalism and protectionism, global trade is under threat.

What to do?

Firstly, the sector would benefit from increased collaboration in engaging governments on policy, particularly regarding the energy transition. Who better to navigate the complexities of a localised, distributed electron economy while minimising disruption in the transition from hydrocarbons? Furthermore, the sector must shift its narrative to appeal to the next generation. The fact is that if you care about the energy transition, the best place to enact change is this sector. Nowhere else. This engagement needs to extend to education. Institutions around the world need to produce graduates trained for, and excited in, joining.  

The second step is to hire and develop your own recent graduates or early career talent each year (and not relent with inevitable setbacks). These programmes are expensive, but the return is excellent – for evidence, consider how the leadership of the sector is concentrated in a handful of graduate programmes’ alumni. They can also be developed at almost any scale. Our sister company Enco Insights is already providing numerous firms access to experts who can devise and implement such programmes (you can read expert network insights from Enco's Managing Director, Bill Read in the magazine).

Of course, both are huge lifts at the sector and company level - and I recommend with that trepidation. However, if the sector is to maintain and capture the opportunity before it in the wholesale rewiring of our global economy (and not yield that to outsiders like tech companies), it will need the very best our schools have to offer - and the pathways to enable the next generation to succeed and stay.

Paul Chapman, Managing Partner, HC Group