Hydrocarbon Processing - February 2021 - 9

D. DICKSON, Deloitte Services, Stamford, Connecticut

Business Trends
Are chemical companies ready
for the future of work?
The COVID-19 pandemic has caused
significant, short-term disruption to the
chemical industry, potentially leading to
long-term impacts. Employment in the
chemical industry was also significantly
impacted by the COVID-led slowdown.
Based on statistics from the U.S. Bureau of
Labor, between December 2019 and December 2020, the chemicals industry experienced job cuts of nearly 17,500, or 2.1%
of the entire workforce. During this period,
the industry lost 37,700 production jobs
but added 20,200 non-production jobs, including researchers and scientists.
Furthermore, the drop in oil prices
threatened to erode the cost advantage
of U.S. petrochemical producers who use
cheap and abundant NGLs as feedstock.
With the dual effects of cheaper naphtha and lower international natural gas
prices, production economics continue
to support ethane-based crackers in the
U.S., keeping them competitive vs. their
European and Asian rivals. However, this
advantage could be threatened by an unexpected and sustained surge in natural
gas prices due to factors such as supply
and demand imbalance and a significant
and persistent decline in oil prices. Timelines for several U.S.-based petrochemical
projects have been affected as companies
reevaluate end-market demand.
The pandemic and market volatility
have helped to accelerate some workforce
trends already underway, such as the adoption of automation, digitization and more
remote work, creating greater demand for
workers to fill jobs in key areas, such as
data analytics and cybersecurity. For example, there is growing demand for employees with research and development
(R&D) experience, such as scientists and
engineers and areas that help drive sustainability; however, one of the primary challenges for the chemical and refining industries is recruiting enough employees with

these critical skills. In addition, the chemicals industry workforce is aging, with as
many as 40% of industry workers eligible
to retire in the next five years, according to
the U.S. Bureau of Labor Statistics.
A further challenge is that existing
employees with digital skills are at risk of
migrating to other industries, such as technology and pharmaceuticals, where the
prospects of career growth may seem to
be brighter. The downturn also seems to
be having a knock-on effect on a few fastgrowing specialty chemicals businesses
that compete with relatively stable businesses-such as life sciences-in sourcing
talent in the growing material informatics
and advanced materials sciences space. We
examine these trends using the framework
of work, workforce and workplace:
* Work. The nature of work and
job roles are changing. The need
for continuous improvements in
production processes is driving
changes in the talent landscape,
including shifts in job roles. More
than 40% of employees have R&D
and technical servicing experience.
Scientists and engineers compose
about 10% of the industry
workforce. The share of jobs
with analytical, information
technology and technical
competencies is growing.
* Workforce. While automation
and the use of advanced digital
technologies are driving
productivity, they are also leading to
changes in workforce composition,
increasing the need for a workforce
with more advanced chemical
engineering, data science and
digital skills. Digitalizing operations
or announcing net-zero long-term
plans could boost interest by new
graduates. Transformative work,
well-defined career paths and agile

working models could be critical
to allowing chemical companies to
attract new workers and to leverage
and disseminate the knowledge of
tenured employees.
* Workplace. A dramatic change
is occurring in the chemical
industry workplace largely due to
two key factors: globalization and
interconnectivity. Globalization
is the ability to manufacture and
distribute chemical products across
the world in a well-controlled
manner through enterprise
software and enabled systems.
Interconnectivity is the ability to
access, interact with and work with a
skilled workforce around the world.
Moreover, the COVID-19 pandemic
is forcing companies to change how
and where employees work. Many
organizations have already adjusted
to working remotely and have
restructured their infrastructure
to support work-from-home
capabilities for their employees.
In terms of innovation, value is
migrating from the traditional
R&D departments of chemical
companies to material informatics
platforms. Until recently, the process
of discovering and developing new
chemicals has remained primarily
lab based. Many new companies
that lie at the intersection of material
science and computer science
(i.e., material informatics) are
reimagining their R&D departments
towards open digital platforms.
Today's changed environment has
given chemical companies the muchneeded " why " to transform themselves
and find new ways to reclaim their earlier
appeal. How can these companies adapt?
According to a recent industry workforce
report1, there are four levers of transforHydrocarbon Processing | FEBRUARY 2021 9

Hydrocarbon Processing - February 2021

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