KEEPING THE BEST AND THE BRIGHTEST
European chemical industry executives fret about how to attract and retain young workers
PATRICIA L. SHORT,C&EN LONDON
It was a somewhat unusual subject for European chemical industry executives, who are typically more concerned about such business factors as overcapacity, feedstock supplies, and competition. But for the delegates to this year's annual meeting of the London-based Society of Chemical Industry, held earlier this month in Dublin, the topic was critical: how to attract and hold on to the bright young scientists on which the industry's future depends.
The industry's managers know that they are facing competition not so much among themselves as from other businesses. Sectors such as electronics, investment banking, and communications are seen as much more appealing--much sexier--to young people, with the result that many parts of Europe are seeing a dwindling supply of talent.
As Volker Trautz, president and chief executive officer of Basell Polyolefins and chairman of the meeting, put it in his opening remarks, the industry's key recruitment challenges are finding the best talent, ensuring that all a company's employees understand their roles, and ensuring further diversity in the organization.
He cited some disheartening results from a recent survey of 7,000 engineering, science, and business students in 159 educational institutions in Europe that indicate the dimensions of the problem. Less than one-third of chemistry students see chemical companies as their ideal employer, he pointed out. Even worse, few students in the sciences recognize the names of even the giants in the chemical industry. Students recognized oil companies, but only for their gasoline stations.
However, the survey pointed out one potential plus for the widely globalized chemical industry: Students are no longer constrained by geography. The single most attractive feature of a potential employer, according to Trautz's reading of the survey results, is its ability to offer an international career.
"The most creative young people cannot be motivated solely by benefits of a career in the sciences, but also by how they can contribute to build the world we in society all want," advised Hubert Markl, professor of biology at the University of Konstanz in Germany, and, from 1996 to 2002, president of the Max Planck Society in Munich.
The younger population in developing countries still shows growth, he pointed out, but in developed nations the population is "gray and aging and shrinking. The brighter the students, the choosier they will be."
THAT POSES A CHALLENGE to science-based industries already coping with the increasingly bad image of science in the eyes of the public--a trend especially true in those countries most dependent on science. The benefits provided by the chemical industry, Markl suggested, are seen almost like "natural entitlements" no longer needing any work. "The industry looks like jobs for repairmen, not for the future.
"Many young people are assuming that science is coming to an end of appealing challenges--that everything worth discovering has been," he said, and that outlook turns off many students. Moreover, relying on recruiting a supply of students from outside of developed countries is no longer the answer.
Peter Lorange, president of IMD, an international business school in Lausanne, Switzerland, told the meeting attendees that companies must tackle the talent dilemma on their own. "You can look at surveys and so on, but in the end, it comes down to each individual company to attract and retain talent," he said.
As Lorange sees it, managing talented people involves several "musts" for a company.
CEOs, for instance, must allow their key people to experiment. "You must show a willingness to back up your people, wholeheartedly. Don't dribble out resources on a key new project, but force resources on it: Spend the money and the people it takes.
"Insist on disciplined performers; set demands," he urged, for two different kinds of budgets, what he termed strategic bud-gets and operating budgets. Strategic bud-gets involve time--milestones, for example--in projects that could generate top-line growth. Operating budgets, more classically, involve deviations in actual versus planned bottom-line results.
And CEOs must, Lorange added, "play major roles in stimulating the attracting, retention, and development of key people. Be a global thinker with your key people--you must be accessible. Contribute and practice internationalism: Travel and communicate."
Internationalism and fostering diversity was the focus of Raj Gupta, chairman and CEO of Rohm and Haas, who discussed how to discover, develop, and deploy talent in the chemical industry. The ability to do this successfully, he suggested, would help close the gap with other industries in the competition for talented people.
The chemical industry is very important, serving as the link between suppliers of primary raw materials, such as oil companies, and the retail stores that sell products made through chemistry, Gupta pointed out. Measured by market capitalization, however, the industry's importance is lower. This low stock-market value, he suggested, reflects the lack of excitement felt about the industry by the investment community--and that, in turn, feeds the lack of enthusiasm felt by many prospective employees.
Gupta, who was born in India, is one of the beneficiaries of a changed culture within Rohm and Haas. In 1982, he pointed out, all members of the company's management team were born in the U.S. Today, 41% of the current management team was born outside the U.S.
Twenty years ago, all of the company's businesses were based at headquarters in Philadelphia; today, nearly two-thirds are based outside the home office. Twenty years ago, only 41% of the company's management team had worked outside the U.S., compared with 62% now; and 38% of managers--up from 12% in 1982--are multilingual.
In fact, Gupta said, the recruitment of top people is so important that it is an area in which he is deeply involved. For example, traditionally Rohm and Haas has had little luck attracting applicants from its hometown business school, Wharton. This year, he said, the company has hired three Wharton graduates and several from Harvard Business School. Gupta personally helped interview all of these new hires.
AND THAT PERSONAL, hands-on involvement may be one point for company executives to understand and take on, according to two young speakers who are in the SCI's Tomorrow's Leaders program.
For example, Ian Collins, a colloid science Ph.D. working as a scale management consultant with BP's exploration division, contended that "at one point, the industry had attraction and retention of staff wrong."
Among the mistakes companies make, Collins suggested, are a company culture that seems to marginalize research, an environment marked by excessive bureaucracy and rigid hierarchy, and a lack of diversity. "Being surrounded by different cultures and different ways of thought is critical," he said.
And how is industry getting it right, now? Collins pointed out as pluses such factors as promoting diversity; offering performance rewards based on quantitative, transparent metrics; and allowing the freedom to create and innovate, knowing that a high attrition rate for new ideas is natural.
Collins stressed the need for nonhierarchical management that empowers young employees through coaching and mentoring. "You can't just dump them into the organization and expect them to get on with it," he observed.
That is as true for newcomers going into small teams as into an organization as a whole, argued Ilari Högström, who is responsible for worldwide sales and marketing of fine and specialty chemicals at Finnish Chemicals.
"Sharing knowledge is most important for young employees. This can benefit both ways--young employees need to learn about the company, but as more recent graduates, they may have the latest information on technology, for example," Hög-ström pointed out. "You are sharing knowledge to get the best results."