Enter San Francisco-based Chevron Corp., a company succeeding in the unstable slicks of the oil industry. We all know the embattled state of the trade as a whole—in the past five years, repeated restructurings and downsizings have kept most oil companies from regaining firm footing. Chevron itself hasn't been impervious to the turbulence. But it has handled it laudably, always with an eye for avoiding layoffs. It has done so by building on that basic idea: The more skills employees have, the safer they are.
Through a special program instituted in 1992, Chevron has rematched employees with jobs internally, encouraging job-hopping from company to company. The matches don't have to be perfect—skills training smooths the rough edges. Employees who can't find another Chevron job are still offered opportunities to develop more marketable skills for job-hunting on the outside. The effort has protected hundreds upon hundreds of workers from the unemployment lines—and saved Chevron millions of dollars in severance payments.
To be so unlucky: Chevron just has too many high performers.
Since the late '80s, the oil industry has been beleaguered indeed. Many divisions at Chevron found themselves serving up severance packages and outplacement programs. It wasn't that the employees weren't great; the company just had to slim down to stay alive.
In 1992, the corporation began to ask itself if this was the only way. The company as a whole wasn't undergoing a downsizing; different divisions within the company were. Often, while one operating company was cutting its headcount, another was aggressively recruiting to keep up with demand.
Houston-based Chevron Production Co. was one of the first to come up with the idea: mixing and matching employees from one unit with another. "The process was based on the premise that these are highly skilled, bright people, and should we not think of using those skills in other operating companies," says Sam Fortune, manager of human resources for the Gulf of Mexico business unit, Chevron Production Co.
For instance, in production operations, a large number of employees are petroleum engineers with college degrees. Chevron's refineries have traditionally recruited chemical engineers. But with some training and assistance, couldn't a petroleum engineer fill the void? If it could work, it would be a winning situation all the way around: An over-staffed company would cut headcount without layoffs, an understaffed company would hire an employee already familiar with Chevron operations and the employee would hold onto his or her job.
Companies within Chevron were categorized as either supply (needing to cut headcount) or demand (needing to staff up). Within every operating company, redeployment coordinators were identified. Both demand and supply organizations had coordinators—high-level individuals who would negotiate matches.
The demand companies remained skeptical at first, on two counts. One: They were concerned about how far employees should try to stretch—would they try to jump entire job categories unqualified? Two: They were a little suspicious that "surplus" employees might be low performers who supply companies simply wanted to get rid of.
Chevron responded from the top level. The company made it clear that it was going to at least try this plan. To ensure its use, HR set up a job bank—demand organizations were required to first post their jobs in the database before they hired outside the company. To further alleviate any doubts, the company ruled that if relocation was involved, the supply company would pay for it—for both exempt and nonexempt workers. Chevron was ready to start its grand experiment, and an experiment it was. Says Fortune: "I have to admit, initially it was all theory. We just put the theory into practice and crossed our fingers."
Employees identify skills they have, train for those they lack.
While most demand companies originally searched for technical matches, many found they were swayed equally by an employee's "softer" skills: the ability to work in teams, to solve problems, to lead people. Field operators from production headed to refineries to train as board operators. Former techies were jumping into marketing positions whereas before only those with business degrees were hired. "Companies found that what was more important than the degree in many cases was the type of individual and the dimensions of their behavior," says Fortune. "They could actually be trained without a lot of effort to fit into a marketing environment."
Part of the redeployment coordinator's job was to help identify as many skill areas as possible. Coordinators received reports from employees' former supervisors and interviewed the employees to find out what kind of job they wanted and were suited for.
Jim Brady, manager of Elk Hills oil field in Bakersfield, California, found himself as the redeployment coordinator for the entire western business unit when more than 150 people were "surplused." He spent nearly 70% of his time for six months functioning as a coordinator. He says an important part of the program was this self-assessment process—identifying everything an employee had going for him or her. "The first thing we tried to tell employees was that they weren't being cut off because they weren't good," says Brady. "We told them, 'You've got skills that someone's going to want. All you have to do is identify those skills and find out what the other organizations need.'"
Of those that entered the redeployment and training program, Brady estimates that 80% found another job within the company. Those who weren't redeployed often were partly culpable—they were too rigid in their job interests or relocation destinations. "But people who truly, actively worked with the system, almost all of them were placed," says Brady.
Whenever possible, surplused employees were immediately released from their job duties so they could spend the full six-month grace period looking for an intracompany job. This allowed them to be free both for meetings with coordinators and interviews with interested demand organizations. For the period of highest intensity, May 1992 to May 1993, 1,050 individuals were redeployed, spanning job categories as broad as geologists, engineers, technicians, pilots, secretaries, information-systems specialists, offshore oil-platform workers and even more.
Some supply companies assisted employees in enhancing their marketability by offering their own training. For instance, one unit realized its employees were short on computer competencies, skills many demand companies were recruiting for. It hired Manpower Inc., the staffing firm, to teach onsite classes in computer-software programs such as WordPerfect and Lotus. During a six-week period, more than 200 training sessions were offered. Of the trainees taking all four courses, more than 85% found jobs.
Most often, however, training was handled by the demand organization. Take the case of Dave Reeves, a redeployee whose background was in health and environmental resources. He hired on at the El Segundo, California, refinery for a position as a reliability analyst. Not a perfect fit, but he met the refinery's basic criteria: a suitable technical background, good communication and problem-solving skills. However, he still required some training. "His background wasn't a refinery background," says his supervisor, Brian Garber, lead fixed-equipment analyst. "There were many processes here he wouldn't understand."
So Reeves underwent several weeks of education: process training (on how the refinery operates), reliability-candidate training (covering basic job skills and expectations) and incident training (instruction on identifying causes of system malfunctions) as well as safety, all conducted in the refinery by trainers or by Garber.
Garber says the time and cost of training was a worthwhile trade-off. Reeves was up and running quickly—both because he was familiar with Chevron and because he had a high-achieving personality. "Dave was making big, big changes around here in the first year," says Garber. "We had training in place that helped him get a good foot on the ground, but his progress was accelerated by his work ethics."
Despite success stories like Dave Reeves, redeployment wasn't a complete success—not all employees were good fits. But most demand organizations will tell you that the good ones more than made up for the poor ones. Sue Nutter, section supervisor for the environmental operations unit at El Segundo refinery, also supervises a redeployee. Roger Hahn came to the refinery from a production area, but glided through the training and readily applied it. He became such an asset to the division, Nutter actually created a new job for him, upped his pay and gave him supervisory responsibilities. "He was such a pleasant surprise," she says. "I have absolutely no complaints. We made out like bandits." Would she do it again? "If I could identify a good-fit candidate like Roger, I would definitely do it again."
Chevron even provided training opportunities for employees who weren't vying for a job within the company. An educational assistance program reimbursed 75% of tuition, books and fees—even for up to two years after termination—to employees taking courses that would enhance their opportunities for finding a job outside the company. Employees with bachelors' degrees who wanted to become teachers were reimbursed the cost of obtaining their teaching certificates.
Chevron's generous training and education efforts helped employees acquire marketable skills—which landed them jobs inside and outside of the company. Just as human resources had hypothesized early on, it was a winning situation all around. Demand companies have been extremely satisfied overall, says Fortune. "They've seen the benefits of getting an employee who knows the company, who has a track record and can bring quicker success than bringing in a new hire and starting fresh," he says.
Employees also have been satisfied. Some of Brady's redeployees have contacted him several years after their transfer to tell him how thankful they were for the process. In general, the workforce rests easier knowing that the redeployment option exists if ever they're surplused. Many check the job base regularly anyway, just to see what skills are in demand or to identify opportunities for job enrichment.
Chevron, as a company, has benefited in a variety of ways. For one thing, its workforce is more highly skilled as a result of the redeployment process. The effort also saved the company approximately $25 million in severance costs alone, and earned it kudos in the U.S. Department of Labor's Guide to Responsible Restructuring.
For organizations interested in a similar approach, having a variety of businesses running on different cycles as Chevron does is a definite plus. But Fortune believes the effort can work for most companies: "The biggest step rather than the size of the company is committing to at least making an effort to try it. You need top management support—saying, 'Before we let these people go, do we have needs elsewhere they can fill?'"
Today's job market is all about skills—how many do you have and what can you do with them? Chevron's answer to that question in 1996: Lots.
Personnel Journal, June 1996, Vol. 75, No. 6, pp. 77-79.