When oil prices began their slide in late 2014, energy executives responded as they typically do during a downturn— paring back workforces, canceling capital-intensive projects, reducing spending wherever possible and waiting for an uptick. But as 2017 begins and the market shows little sign of improvement, oil and gas executives are beginning to realize that lower-for-longer oil prices will reshape the industry and their individual companies in dramatic and long-term ways.

The era of energy abundance requires a new strategic approach and a workforce that has both unique competencies and diverse perspectives. The oil and gas companies best-positioned for success are those that can make the transition to a less rigid, more collaborative future.

To prepare, energy executives should be asking themselves:

• How should we alter our talent pipeline, recruiting and retention practices to best align our workforce with the company’s strategic direction and the changing requirements of the global marketplace?; and

• What skills and experiences will our future company leaders need, and what should we be doing today to develop those capabilities?

Addressing these questions now will help companies navigate the sector’s talent needs and create a positive impact on diversity across the industry. Just as important, it will produce future leadership teams capable of guiding a workforce increasingly composed of millennials, a generation of employees who have markedly different needs and expectations of work.

A new generation

Most oil and gas CEOs have traditionally come from operational backgrounds, which are still male dominated—all the way back to undergraduate engineering programs. A recent study by the American Society for Engineering Education found that in the 2012-2013 school year, just 14% of petroleum engineering graduates were women. From a broader perspective, of the 93,000 engineering undergraduate degrees awarded that year, only 19% went to women, a percentage that has been relatively unchanged for more than a decade despite efforts to increase interest in science, technology, engineering and math careers among women and minorities.

Those numbers are reflected in the percentage of women in key positions across the industry. EY’s recent study of gender diversity in oil and gas found that 11% of the industry’s top global executives are women, many in traditional staff areas such as law, human resources and administration or finance, where they are typically siloed.

The talent pipeline

While the survey found that three-fourths of respondents believe their companies have done a good job of attracting and retaining women employees, half said their companies have been effective at identifying future female leaders and promoting women into leadership. In fact, 63% of respondents believe women remain the most underutilized talent resource in the sector.

In other words, companies might be successful in hiring women, and most make a concerted effort to do so, but those women often are not going into the talent pipeline that develops individuals for future C-level positions.

What happens if companies alter this mindset and reconsider the pathway to leadership?

For the most part, today’s executives began their careers as engineers and learned the financial, legal and human resources elements of leadership through various assignments over the years. With the right exposure and opportunities, future executives could begin as accountants or lawyers and learn the operational aspects of the business in the same manner.

This type of strategic retooling of the executive development pool comes at a time when the needs of companies and their workforces are evolving as well, in large part due to rapid developments in technology, the influence of younger employees and the changing demands of the oil and gas business itself.

So what will the “future of work” look like for companies in the energy industry?

In EY’s ongoing study of these major trends and their potential impact on the future of work, it has identified seven major elements, or levers, companies in oil and gas will need to address:

Purpose—Increasingly, corporate executives believe an organization with a shared purpose, often one that blends their corporate and social agenda, is more successful in transformation activities. Millennials are also more likely to choose a company with a commitment to community and/or social motives if all other factors were the same;

Digital leadership—A majority of workers think their job requires human abilities and interaction that technology will never replace. Empathy is identified as the most critical attribute for the next generation of digital leaders;

Teaming ability—The continuing need for innovation is demanding more effective collaboration and teaming. Virtual and network teams will dominate the new landscape. New ways of working, new mindsets and new behaviors around work are required;

Mind clarity—The competition for talent is driving companies to focus on employee experience and employee wellness. Employees look to work as a means of growth and fulfillment;

Performance and rewards—The nature of pay and benefits is changing. Companies need systems and structure to reinforce employee needs and priorities. High pay is no longer sufficient to attract talent. New approaches to driving behavior change are required;

Technology experience—Employees increasingly want the same seamless digital experience at work they are able to get at home and on personal devices, and they quickly get frustrated when their companies can’t make that happen; and

Physical environment—In addition to minimizing capital asset costs, companies increasingly view office space as a value generator by locating offices near talent pools and creating inspirational spaces that drive collaboration and innovation.

Those seven levers point to one inescapable fact: The successful leaders of tomorrow won’t necessarily be the ones with the most technical or operational experience; they will be talented individuals with varying backgrounds, genders, ethnicities and perspectives who can communicate effectively and engage, inspire and motivate a diverse, educated, highly demanding workforce.

Cross-line teams

Further, the oil and gas company of tomorrow will use flexible teams that collaborate easily across service lines. Employees will rotate among a wide range of jobs to gain a broader, more comprehensive understanding of the company as a whole and improve their ability to communicate and work with others. In this environment, detailed career planning, where paths to leadership roles are clearly defined and communicated, will be a necessity, and companies will need to do a much better job of helping good employees move forward.

Viewing these paths to leadership as well as necessary executive skill sets in a new light—and, in response, opening up leadership opportunities to a broader range of high-potential employees—will help oil and gas companies attract smart young talent from across the globe and eventually provide needed balance to the C-suite. This diversity will in turn create stronger, more vibrant energy companies that are reflective of society and the global marketplace.

It might sound shocking, but 50% of the companies comprising the Fortune 500 just a decade ago are no longer in existence, having succumbed to a wide range of competitive challenges and changes in customer interests and habits. Being aware of major trends and accepting of how these tectonic shifts will impact your business is a necessity in a world where change is unrelenting.

Deborah Byers is the U.S. oil and gas leader and managing partner and Glenn Nevill is principal, people advisory services, for EY. The views reflected in this article are the views of the authors and do not necessarily reflect the views of the global EY organization or its member firms.

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