Turnover of Millennials and Other Workers Challenge North American Chemical Companies as Retirement Surge Looms, New Survey by Accenture and American Chemistry Council Reports

Industry Addresses Issue at ACC Annual Business Meeting

COLORADO SPRINGS, Colo.–(BUSINESS WIRE)–North American chemical companies face workforce turnover issues, which
if not resolved, could mean more unplanned operations disruptions, more
hiring and training costs and more efforts to maintain safety – reports
a new survey by Accenture (NYSE:ACN) and the American Chemistry Council
(ACC). The survey was released today at the Council’s annual business
meeting.

Chemical companies face a shortage of experienced workers and must
replace a substantial number of retiring baby boomers in the coming
years. More than 20 percent of the chemicals workforce is approaching
retirement in the next three to five years, said 40 percent of
respondents.

If the aging workforce issue is not resolved in the next three to five
years, 86 percent said the chemical industry’s profitability will suffer
significantly. This includes 49 percent of chemical companies that agree
and 37 percent that strongly agree with this point of view at a time
when industry expansion is expected to continue in North America.

Furthermore, only approximately one quarter of North American chemicals
companies retained 90 percent or more of their millennial employees
hired in the past three years. Most saw a 30-50-percent attrition rate
among millennials. This compares with a recent Accenture
Strategy study
showing that new university graduates expect to stay
on the job for more than three years.

“Abundant supplies of domestic natural gas from shale have moved the
U.S. from being a high-cost producer of key petrochemicals and resins to
among the lowest cost producers globally, creating a period of
unprecedented growth,” said ACC President and CEO Cal Dooley. “We
currently have more than 262 new chemical projects announced that are
valued at over $161 billion. For the first time in more than a decade,
the U.S. chemical industry is once again creating good, high-paying
American jobs and it’s vital that we be able to attract and retain a
talented workforce that helps us continue to drive economic expansion,
innovation, and global competitiveness,” he added.

Executives interviewed noted that chemical companies have effective
knowledge transfer programs and can hire millennials with non-technical
degrees and train them in the technical knowledge to do the job. The
challenge for some is keeping millennials for long, productive careers
in an industry considered “old,” despite its track record of tremendous
innovation.

“Companies in all industries have a range of generations in their
workforce,” said Julie Sweet, Accenture’s group chief executive – North
America. “We find that across generations, employees all want
interesting work, an opportunity to make a meaningful contribution and a
balanced life. By focusing on transparency, providing a
hyper-personalized employee experience centered around these values, and
providing a feedback loop to keep close to their people, companies can
attract and inspire the best people across the generations.”

Most chemical firms compete with peers for personnel, filling open
positions mainly by hiring from other companies in the industry. This
makes for a limited talent pool and fierce competition. More than half
(52 percent) of chemical companies reported hiring professional talent
from competitors. This compares with US Bureau of Labor Statistics data
(from May 2015) showing that two-thirds of chemistry, chemical engineer
and material science graduates, fields desired by chemical companies,
work in other industries, including government agencies and energy firms.

Exacerbating the workforce challenges is the so-called “missing middle”
of workers ages 35 to 54. This is also a tight labor pool from which to
recruit and replace retiring workers with valuable expertise.

“Now that innovation in the U.S. energy sector has created a surge in
demand for chemical professionals, particularly skilled craft and
technical workers, the industry needs to work collaboratively to close
the growing gap,” said Peter Cella, incoming ACC chairman of the board
and President and CEO of Chevron Phillips Chemical Company. “Awareness
is a critical first step, but we also need to work closely with our
schools, communities and government leaders to ensure resources are in
place to prepare tomorrow’s workforce.”

“When you sum it all up, we are fighting the war for talent on many
fronts,” said Inga Carus, ACC board member and chair of Carus
Corporation. “We must not only hire the right people as older workers
retire and transfer their knowledge to a younger work force, we must
bridge the gap with millennials and get them excited about what we do
with chemistry as we develop new products to meet the needs of their
generation.”

Another challenge is that new technologies are changing the face of the
chemical industry workforce. Nearly two-thirds (63 percent) of
respondents said that half or more of the workforce is changing compared
to three years ago due to the advent of new skills, automation, robots
and cognitive agents. Most (78 percent) expect further change due to
digital technologies automating jobs, causing moderate (56 percent) to
significant (22 percent) workforce reductions, though more skilled
support jobs will be needed.

“While all of these workforce issues exist, 60 percent of chemical
companies said they are adapting to digital technologies, but with some
resistance,” said David Yankovitz, managing director and chemical
practice lead for Accenture. “They also recognize a greater need to
embrace digital technologies to gain a competitive advantage. So as the
industry overcomes this resistance and advances a people-first mindset
to bolster the workforce, success will come in many areas from the
production plant to the back office to the market with new products and
services.”

Methodology

The survey of more than 500 chemicals industry respondents, including
100 C-suite participants, was conducted in April-May, 2016. The U.S. had
393 respondents and Canada had 112, with company headquarters worldwide.
More than 80 percent of the companies represented in the survey had
annual revenues of more than $1 billion; 23 percent had more than $5
billion.

About Accenture

Accenture is a leading global professional services company, providing a
broad range of services and solutions in strategy, consulting, digital,
technology and operations. Combining unmatched experience and
specialized skills across more than 40 industries and all business
functions – underpinned by the world’s largest delivery network –
Accenture works at the intersection of business and technology to help
clients improve their performance and create sustainable value for their
stakeholders. With approximately 373,000 people serving clients in more
than 120 countries, Accenture drives innovation to improve the way the
world works and lives. Visit us at www.accenture.com.

About the American Chemistry Council

The American Chemistry Council (ACC) represents the leading companies
engaged in the business of chemistry. ACC members apply the science of
chemistry to make innovative products and services that make people’s
lives better, healthier and safer. ACC is committed to improved
environmental, health and safety performance through Responsible Care®,
common sense advocacy designed to address major public policy issues,
and health and environmental research and product testing. The business
of chemistry is an $801 billion enterprise and a key element of the
nation’s economy. It is the nation’s largest exporter, accounting for
fourteen percent of all U.S. exports. Chemistry companies are among the
largest investors in research and development. Safety and security have
always been primary concerns of ACC members, and they have intensified
their efforts, working closely with government agencies to improve
security and to defend against any threat to the nation’s critical
infrastructure.

Contacts

Accenture
Guy Cantwell, +1 281-900-9089
guy.cantwell@accenture.com
or
Matt
Corser, +44 755 784 9009
matthew.corser@accenture.com
or
American
Chemistry Council

Patrick Hurston, +1 202-249-6506
patrick_hurston@americanchemistry.com