Powered Up: Knoll Workplace Research Breaks Down the Energy Market

Furniture manufacturer Knoll recently released a report detailing its research in the energy market, “Powered Up: Characteristics and Priorities of the Modern Energy Workplace.” While all markets have their complexities, energy firms today face an immensely heightened amount of internal and external factors impacting their work, sometimes on a strikingly immediate basis.

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Artwork: provided by Knoll

Knoll surveyed energy companies, organized roundtables and conducted one-on-one interviews with industry observers and experts across the country. Its resulting report is a great comprehensive designer’s guide to current and future workplace culture in the energy sector.

“Energy happens to be an industry where a lot of change is going on,” said Kylie Roth, director of workplace research and strategy at Knoll. “New people are entering the market, and it’s important to understand these high growth markets.”

Drivers and Cultural Nuances

Several key drivers and cultural characteristics inform the work climate that designers must understand to create productive work environments for their energy clients.

Internally, talent retention is a huge concern for energy firms. According to the study, “More than 50% of oil companies have labor shortages that will be exacerbated when their senior employees retire in the next few years, giving rise to a new form of ‘movable talent.’ Skilled retirees are frequently called back on projects about which they have unique knowledge or they are recruited for startups where they can hit the ground running. Such a highly competitive landscape has put a new premium on attracting and retaining a skilled workforce, forcing a delicate balance of managing the needs of veterans while creating a workplace that appeals to young employees and supports the workstyles of both generations.”

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Energy firms also operate under a traditional organizational structure and exacting, process-driven methodology. “Even as companies adopt a more progressive, collaborative workplace approach, a conservative culture prevails, sustained by a workforce seeking the predictability and stability a procedure-driven work environment offers.”

At the same time, a multitude of external challenges add up to a fierce climate of competition that has the power to, for example, quickly triple or cut in half a company’s business.

The report highlights the fact that change happens quickly and frequently in the energy sector, and a heightened level of volatility is “normal.” “Cycles of drill/explore/retreat and frequent mergers, acquisitions and consolidation can beget a cycle of rapid staff expansion and just as swift contraction.

“Energy companies also operate under some of the world’s most complex markets and regulations. Geopolitics has the capability to exert swift and disruptive pressure on the operations and security of energy assets across the world and can be a source for both opportunity and risk. Recent global economic turmoil, financial and supplier market uncertainty and expanding competition along with threefold price swings and exchange rate fluctuations have the potential to create vast change in the energy industry and the global economy as a whole.”

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Prevailing cultural expectations, rather than functional demands, combined with the relatively low cost of space compared to other energy investments, account for the prevalence of private, enclosed spaces for upper management in energy companies.

Knoll also pointed to the energy industry’s many sub-sectors – oil and gas, mining, utility and alternative energy – as drivers for distinct business objectives and workplace design strategies.

The report indicates, “As risk-taking explorers, upstream oil and gas workplaces tend to reflect bolder design choices versus the more pragmatic environment of midstream and downstream firms. Producers prefer more enclosure while suppliers are comfortable with open environments. Utility companies often embody a more functional aesthetic; alternative energy offices can resemble high-tech startups.”

“Each of the sub-sectors is moving toward more open environments, but at varying paces,” said Ms. Roth. “Because alternative energy companies are newer and less engrained in legacy processes, they’re a lot more nimble.”

In addition to sub-sectors, energy workers also often identify with micro-cultures within the corporate environment. Loyalty spawning from close relationships with engineering-based universities; increasingly global companies seeking a universal culture; a longevity in employees nurtured by energy companies accustomed to surviving boom and bust cycles; and the contrast in age ranges, all impact energy workplace environments.

2015.0907.W.KnollEnergyMarketResearch7.GreatCrewChange“As much of the oil and gas workforce prepares to retire (about half the workforce is eligible to retire in 2015, according to Rigzone), breakthroughs in shale drilling have spurred U.S. oil and gas production, drawing a younger generation of workers. Missing are many mid-career professionals, who due to the low oil prices and limited hiring from the mid-1980s through the mid-2000s, chose alternative industries. In contrast, many renewable energy firms embody the youthful culture found in high-tech companies.”

One final factor impacting energy company workplaces is the fact that, compared to the expense of leasing an offshore rig (about $500,000 per day according to Rigzone), the relatively low cost of premium office space has led to a higher-than-average proportion of private offices in the oil and gas sector.

Workplace Priorities

The drivers and cultural nuances detailed above have resulted in a list of well-defined priorities for workplace planning in the energy market:

>Safety/security. Due to extremely risky and dangerous operations in the upstream sector, “Universal safety standards are instilled so deeply they become part of the company-wide culture.”

>Advanced technology. “The technology that has propelled U.S. oil exploration is run on some of the biggest, most sophisticated computer systems in the world, according to Jon Fahey, Associated Press energy reporter. As the quest for new energy sources becomes increasingly complex, it demands an even greater reliance on technology and accompanying brainpower.”

>Attraction and retention. Labor shortages and a retiring workforce have put new premiums on attracting and retaining a skilled workforce.

>Collaboration and knowledge sharing. To bridge gaps between a new youthful workforce and industry vets with highly technical knowledge, energy “companies are implementing mentoring programs that balance hierarchy with flexibility such as leadership development rotations and cross-divisional/generational teams that collaborate on large-scale projects. Such agendas require environments that foster communication and collaboration, spark invention and enable fast problem solving and decision-making. Similarly, spaces need to be agile to support the fluidity of changing teams and project lifecycles.”

>Health and wellness. Due to the safety and security concerns in the energy industry as a whole, energy companies have customarily committed significant resources to “supporting the whole person” in the workplace.

>Focus space. “Design industry veterans agree that privacy and quiet are essential in energy sector environments. ‘Heads down’ space is vital not only for engineers who need long periods of uninterrupted time, but also for the large number of energy employees who do frequent focus work and/or are involved on highly confidential projects. Whether it’s the culture, the nature of the work or both, oil industry workers spend a large percentage of their day in their individual workspaces, and have a significantly higher utilization rate (close to 80%) than that of the average American or European knowledge worker (as low as 35%) according a GSA workplace utilization report.”

>Sustainability. Achieving LEED standards is a priority for many energy companies, and for companies in the renewable sector, sustainability is a way of life.

Workplace Solutions and Strategies

In answer to the specific needs of end users at current and future energy firms, Knoll presented in its report seven workplace solutions for designers.

>Facilitate mentoring and knowledge transfer

>Provide choice in workspaces

>Re-size and standardize work settings

>Support the whole person

>Design for maximum flexibility

>Prioritize safety, security and privacy

>Lead change from the top

Some of these solutions are no-brainers that would and do prove useful in every modern office design. The full report, available at https://www.knoll.com/knollnewsdetail/powered-up?trk_msg=IRGLGFFSO0N4BABSEVRJ73Q5L4&trk_contact=VJ874N11HSTCOU9FFIJ4KFFG90&utm_source=Listrak&utm_medium=Email&utm_term=Powered+Up&utm_campaign=Workplace+Video

“Energy firms are trying to figure out what’s next for their businesses, and they’re coming together for this type of knowledge sharing,” said Nicole Mirchandani, senior marketing director at Knoll. “Even considering the nuances of each sub-sector, there are lots of commonalities in the ways everyone is working. Many people are grappling with the same few issues, and there are big parallels.”

But, a designer or architect’s knowledge of the industry they’re designing for will prove to shape the resulting workplace in positive ways.