Chemical companies battle against the lure of more glamorous jobs

Hire today, gone tomorrow

27 February 2008 00:00  [Source: ICB]

Recruiting and retaining staff has become increasingly problematic in the petrochemical sector over the past decade. Are chemical engineers a dying breed?

Andy Brice/London

ATTRACTING NEW blood to the chemical industry has become almost as difficult as predicting the direction of crude and gasoline prices. But is a staid image, or the lure of more glamorous, highly paid jobs, to blame?

Sourcing highly skilled talent is perhaps more critical now than ever before, particularly with companies keen to increase their presence in key regions such as Asia and the Middle East. Add to this the influx of new production capacity coming on stream to meet rising demand, and the increasing pressures to slow climate change and source alternative energies, and a new generation of chemical engineers is clearly going to be in demand over the coming years.

Unfortunately, the industry has been going through one of its leanest spells regarding recruitment.

Of the 41 chemical CEOs who responded to PricewaterhouseCoopers' 11th annual CEO survey, which was published in January, some 95% said they agreed, or strongly agreed, that the people agenda was one of their top priorities. Furthermore, around 70% admitted they had serious concerns about the lack of availability of key skills and the threat this posed to business growth. Half - 49% - said that buying specialist businesses to gain relevant expertise was often necessary to address the skills gap.

"There are two distinct problems," says Andy Furlong, director of policy and communication at the Institution of Chemical Engineers (IChemE), an international professional membership organization with 28,000 members worldwide. "There is a looming shortage of professional chemical engineers, but also a growing demand because chemical engineering is seen as an essential skill in securing sustainable chemicals production and decarbonizing a wide range of process activity."

"In the US, they have similar problems but they are finding it doubly tough, as the Homeland Security requirements post 9/11 can make it very difficult for US-based firms to recruit professionals from overseas. It's sometimes difficult for a student with Middle Eastern connections, for example, to get an entry visa to work in the US. It's terribly sensitive at the moment."

Even in the booming markets of the Middle East and Asia, many companies have already borne the brunt of a lack of skilled manpower.

One example of this is Jam Petrochemical and its huge cracker project in Assaluyeh, Iran. Labor shortages and insufficient funding have heavily delayed its completion, which is now expected at the end of March - almost two and a half years later than originally planned.

Finding suitable employees in China is also notoriously difficult. Those who do meet a firm's criteria are unlikely to stay in the job long, often tempted by competitors offering higher salaries, bonuses or benefits (see ICIS Chemical Business, August 6, 2007).

In India too, jobs in the chemical industry are often ignored in preference for a career in the popular information technology, electronics or finance sectors. According to a report from Cygnus Business Consulting & Research, based in Hyderabad, India, a meager 15% of students passing their higher secondary exams chose to pursue science in 2006, less than half as many as in 1950 (32%).

Even though some countries have been relatively successful at encouraging students onto chemical engineering courses, this does not necessarily mean that more people are entering the industry.

Adrian Zhou, a chemical engineering undergraduate at the University of Singapore, says the industry's poor image and the perception that other careers may be better paid has tempted some of his peers to pursue alternative degrees. However, many are unable to switch to another course because of hefty financial penalties. The threat of the withdrawal of their government grant for tuition fees therefore means some have studied for a vocation they have no intention of pursuing.

Clearly, the labor shortage is a global issue. National trade associations have upped efforts to raise awareness, particularly targeting youngsters through schools, colleges and career fairs to encourage them to follow a career in science.

Some companies have also decided to take matters into their own hands, increasing investment in internships, apprenticeships and in-house training programs.

US-based specialty chemicals firm W.R. Grace launched its recruitment program in 2002, visiting specially selected universities to handpick MBA graduates for a 24-month-long training program. Initially hiring two to four candidates, its success now sees the company employ 10-15 trainees each year. Plans are also under way to roll the program out in Europe and Asia.

"We're trying to prevent the skills shortage and do some advance hiring," says Troy Vincent, vice president global recruiting and staffing. "The workforce is aging and people retire if we don't have others in the knowledge transfer process who are ready to move into those jobs, then we'll be caught short."

Having completed their degree, candidates are enrolled in three eight-month assignments that focus on finance, marketing or manufacturing. They are given hands-on experience to develop various disciplines including leadership, communication, the Six Sigma business methodology and project management.

"The major oil companies recruit a lot of people they take a lot of the available chemical engineers and chemists and put them into a direct hire position, whereas we can give these people a sense of what they want to do further down the line. This gives them some direction and a career path," says Vincent.

But is it enough? Attitudes toward the chemical industry have undergone a seismic shift over the past few decades. According to statistics from the UK's Chemical Industries Association (CIA), public perception has become far less favorable.

In 1978, around 50% of the public had a positive attitude toward the sector, with 10% negative. However, safety and environmental concerns have undermined public confidence, resulting in these lines crossing at around 30% by the mid-1990s.

The UK's Confederation of British Industry says an extra 2.4m science and technology graduates are now needed by 2014 to fill the recruitment void.

Figures published in February by the Universities and Colleges Admissions Service (UCAS) do, however, offer some encouragement for the industry.

UCAS says there was a record intake of chemical engineering undergraduate students in the UK in 2007, with 1,455 students enrolling. This marks an 11.5% increase year-on-year, and is 55% above 2001.

"There's been a huge effort by all the chemical engineering departments at universities around the country, and by professional bodies like IChemE, the Royal Society of Chemistry and the Royal Academy of Engineering, to go into schools and speak to students," says Jonathan Seville, head of chemical engineering at the University of Birmingham, UK. "Clearly, it's had an effect chemical engineering was in decline, but has now turned the corner and is showing a steady increase."

"The numbers speak for themselves," adds Furlong. "We hit a trough in 2001, with barely 900 students in the UK intake, but it's grown to a new peak this year."

"We've improved from where we were six or seven years ago, but we're obviously not going to solve some of the major challenges facing society with only 500 extra chemical engineers. It's a damn good start, but it's still only a small drop in the ocean. Further improvement will only be possible with substantial public and private sector investment in education and training."

Money does not appear to be the deterrent for graduates. Salaries for chemical engineering graduates have leaped by 10% in the past two years in the UK - staying well ahead of inflation.

According to provisional figures from the IChemE's salary survey, annual starting salaries in 2007 were £26,000 ($50,700, €34,800), while the top 10% of graduates have an income of £33,000/year. Additional performance-related bonuses, the potential for career progression and plenty of international travel, are also pretty attractive incentives.

Wages appear similarly respectable elsewhere the American Institute of Chemical Engineers (AIChE) for example, says yearly earnings for an entry-level chemical engineer are in excess of $50,000 (€33,600). The median salary for more established employees is around $100,000/year.

"For the new generation at least, the prognosis is good," says Furlong. "But bear in mind that students studying chemical engineering in 2007 will not emerge with a Masters degree until 2011. It would then take at least five more years until they become a chartered chemical engineer, so we're looking at 2017 before they're likely to assume senior roles."

If the 2007 entry feeds through to 2017, this means that the slump, which was seen back in 1999, will feed through to 2009, he points out. "This means that we're probably just about reaching the worst of the labor market conditions over the next two years."

 

HUMAN RESOURCES  - Choosing the right path for you

With so few graduates choosing a career in chemical engineering, competition among companies is fierce. Helpful tips and tools can entice the younger generation to follow in your footsteps. Here are some useful resources

Firms such as W.R. Grace (http://tinyurl.com/2s78xe) have set up in-house training programs and recruitment initiatives to attract the best young candidates and minimize the impact of a labor shortage.

ICIS - www.icis.com/StaticPages/Students.htm

Magazine archives, blogs, podcasts and television shows are available to students, as well as historic pricing information and news on up-and-coming plants and projects. The site also includes a jobs section to find the latest vacancies (www.icis.com/Jobs/Search.aspx).

Chemical Industries Association (CIA) - www.ypnet.org.uk

The CIA's Future Forum - formerly known as the Young Persons' Network - is targeted at 16 to 35-year-olds. It allows young people working in the chemical industry to air their views and contribute towards the development of the CIA, and its position and policy on key issues. One objective of the scheme is to improve the reputation of the industry by enrolling promising chemical engineers to become role models, spreading the message at schools, universities and careers fairs. For more on the initiative read our interview with the reigning young ambassador, Jennifer Clark, on page 19.

American Chemistry Council (ACC) - http://tinyurl.com/2jrer2

Highlighting the importance of chemistry to the economy, the ACC offers articles, fact sheets and information explaining how chemistry affects our lives each day.

Institution of Chemical Engineers (IChemE) - www.whynotchemeng.com

The IChemE launched its whynotchemeng campaign back in 2001. The website features information for students considering careers in chemical engineering, and teachers and parents. Sections include: course information, interviews, and work experience. IChemE successfully rolled out the initiative to Australia in October 2007.

American Institute of Chemical Engineers (AIChE) - http://tinyurl.com/2u79lm

The US-focused AIChE website provides a search engine to find the latest job vacancies, and resources including salary comparisons and information about chemical suppliers.

Employment4students - www.e4s.co.uk

The online recruitment website has been updated, offering temporary, part-time and holiday jobs, as well as details of internships and overseas gap year positions.

See also Andy's ICIS TV Recruitment special and send him your views. Email andy.brice@icis.com

For more information on ICIS training courses, go to: www.icis.com/training





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