Recognition This was the second consecutive year that Fortune magazine ranked Devon Energy among its 100 Best Companies to Work For, distinguishing the Oklahoma-based independent oil and gas producer as one of the nation’s most desirable employers. “While making the Fortune list is wonderful recognition for the company, it says even more about our employees,” said Devon’s chairman and Chief Executive Officer, Larry Nichols, when the announcement was made at the start of the year. “Our employees’ values and their commitment are what make Devon a great place to work. We have an outstanding company with many wonderful assets, but we believe our people are at the foundation of our strength.” Even in the current recession, some companies are going out of their way to please employees. As Google slips to number four, 2009 sees a new number one. Will 2010 see another boost for Devon? 1. NetApp (14*) 2. Edward Jones (4*) 3. Boston Consulting Group (11*) 4. Google (1*) 5. Wegmans Food Market (3*) 13. Devon Energy (48* * 2008 ranking
“Look at the impact the current price of oil and natural gas has on your capital investment – look at the huge amount of declining rigs around the world, especially projects that are more short-term, and the amount of capital reduced there. If you don’t have the same capital you can’t go after the resources that the world needs, and I think this talent shortage situation will have the same impact. If you’re not able to grow enough talent to meet your needs, you aren’t going to be able to drill enough to meet the needs of a nation because you won’t have the technical expertise. And I’m not saying this is the absolute scenario, but that’s what every company, from the majors to the small and large independents, are working really hard to make sure doesn’t happen.” That said, continues Rudolph, when you are looking for people that are between the ages of 40 to 50 with high technical skills, there are some big issues. “Trying to fi nd people with 20 years of experience takes us back to the 1980s when the oil and gas industry had some really big-time issues. And again they couldn’t get anyone to go into those disciplines, which now means there is a big hole in the market.” So how is Rudolph attracting employees with the requisite experience? Well, he explains, fi rstly from a total compensation standpoint, Devon pay more at a competitive level. The firm also made a decision a couple of years back to look at the retirement program and went from a defi ned benefit to a defi ned contribution. Indeed, Fortune also tabbed Devon at number six on its list of ‘Eight Great Places to Retire From’ in October 2009. After beefi ng up its retirement program in 2007, overhauling its program and contributing eight
percent of a new employee’s salary into a retirement account, boosted to 16 percent after the employee completes 15 years of service. And Devon will match employee contribution up to six percent, unlike most companies that typically match only half of employee contributions up to six percent, meaning the company’s total offering can reach 22 percent. “Our defi ned contribution amounts, which are when someone gets to around 10 years experience, receive 22 percent of their pay matched onto that defi ned benefit program – and as such it’s been described as a 401(k) on steroids. With this we can convince people to make a midterm career decision based upon what they can see in front of them from a retirement point of view, and that has really helped a lot.” Rudolph also believes that the working culture at Devon, driven by these values and attributes, has made a big difference to how potential employees perceive the independent oil and gas giant. “I’m not just talking about the recent economic recession; people look for a culture that they can relate to, for values that are practiced in the company, and that helps to attract the talent.” And in respect of the values of the company, Devon was voted the 13th in Fortune’s 100 Best Companies, moving up 35 places from the previous year – which, according to Rudolph, significantly added to Devon’s employment brand. “It’s a powerful brand and provides great recognition internally that we’re doing the right things and that our employees recognize that too, so it’s a great feedback loop that we can use,” says Rudolph. “And mostly I would say that once in a while it’s just nice to get recognized for doing positive things, especially in the climate we’re looking at today. And we’ve seen a huge increase in the amount of unsolicited resumes that we get, particularly as over 90 percent them reference the 100 Best Places to Work For status.”
Talent Absolutely critical to Devon’s success is the development of top talent at the firm. While the company continues to attract employees, people development is key if Devon want to keep its best staffi ng resources. “It’s really about what I would call a world class approach,” says Rudolph. “With a creative approach, processes drive quantitative results around people development. Looking year over year and asking ourselves whether we are moving the needle with respect to developing our talent is critical. And whatever you’re doing on a short-term basis, it has to feed into a longer-term workforce planning model that deals with and understands your drivers for adding people – which could be capital investment, wells drilled, etc. You then need to understand how that spreads to the rest of the company. “We’ve moved very quickly from a soft approach on developing staff to a very process, quantitative, disciplined approach to developing talent both in the short-term and the long-term too. Understanding your needs tomorrow and making sure that you’re balancing the need that you’ll have tomorrow with what you are doing today with regards to developing talent is key.” It seems Rudolph has a balancing act on his hands to ensure that both new recruits continue to be attracted to the company as well as prepare for the inevitable departure of the babyboomer generation from 2016 onwards. That said, Rudolph is working hard to ensure that the disruption to his fi rm is kept to a minimum.
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