Finding and retaining maritime professionals is no easy feat. In fact, figures today show that there’s an estimated shortage of around 26,240 STCW-certified officers and by 2026 we can expect to need an additional 89,510 officers to operate the world merchant fleet¹.

Competition for talent in this niche industry is fierce. Skilled professionals are in demand but companies often struggle to meet the standards they require due to the scarcity of competent personnel.

Furthermore, the introduction of increasingly sophisticated technologies onboard ships is adding pressure on seafarers to rapidly acquire new skills and competencies to operate them.

Poorly trained or unmotivated individuals present a huge risk to organisations. Whether through action or inaction, they are less likely to run a safe, well-maintained ship or to have the same goals as the business.

Ultimately, this leads to an organisation with a high turnover. In time, a revolving door of people coming and going creates risks that are both hard to define and hard to control.

So, what’s the answer?

Recent research undertaken by maritime research firm Thetius and commissioned by Ocean Technologies Group (OTG) has found that deploying an effective Human Capital Management (HCM) strategy is critical to securing a talented and loyal workforce, reducing organisational risk and minimising turnover.

In a nutshell, HCM takes a holistic approach to managing people, the human capital. It encourages leaders to treat people as critical assets of the organisation that need to be invested in and considers their long-term development married with a data-driven approach with the culture and values of an organisation.

HCM requires finding and recruiting talented people, supporting them with an effective onboarding process, providing them with the opportunity to learn and develop their skills, managing their performance, and rewarding excellence. This ensures that the right people are selected for the right roles and that they are motivated and engaged in the work that they do, ultimately securing and retaining top talent.

While many elements make up a successful HCM strategy, there are three key points that are worth noting:

1. HCM is about finding the best talent and working hard to keep it
   A good HCM strategy first finds and recruits the best talent available and then ensures the talent is harnessed and retained. It’s hard work to source the right people with the necessary skills, but it’s even harder to then lose them because you didn’t maximise their potential. When employees leave they take with them valuable knowledge and skills they have learned. Neglecting to secure these intellectual assets can have costly repercussions.
   
   An effective approach to HCM facilitates skills development alongside performance management. This enables seafarers to understand not just where they need to improve, but how to get there. Furthermore, a good HCM strategy ensures that employees feel valued. This includes factors such as paying crew their salaries on time and in a currency most useful to them. Those that are happy in their work, will also be loyal. Ultimately, this reduces the risk of costly and disruptive turnover.

2. It’s not all about money
   An HCM approach to retention is about more than just throwing money at seafarers. While no one is going to turn down a pay rise, money is not the silver bullet. Instead, what is required is a culture of continuous learning and personal development. Invest in your people to unlock their full potential. By doing so, you will create a future-proof workforce that has the skills and expertise to navigate complex situations and maintain the highest standards of safety and compliance.
   
3. Creating value from data
   Using data to understand how different parameters interrelate is part of a good HCM strategy. Good quality data should be used to create true value and lasting impact. For example, combining port state control performance data with training data to better understand how learning management affects port state control performance. In research conducted by OTG in 2023, it was found that operators with a data-driven approach to learning management were 49.5% less likely to receive port state control deficiencies, and 33% less likely to be detained.

Where to begin

Once you’ve decided that an HCM strategy is for you, where and how do you start? Thetius recommends visualising the organisation you want to be and the employee experience you want to shape. Crucially, this vision must be communicated to your employees to ensure alignment of the vision and values across the organisation.

Regular check-ins with your people to gauge the overall mood, engagement, morale, and well-being of employees are also recommended. This will help to determine if your vision and messages are landing with the people who are performing the work.

Winning hearts and minds is also key. With the implementation of any new tool or process, there is likely to be some reluctance from employees. By preparing and readying those who will be affected by the change, the chance of achieving organisational-wide buy-in, and therefore successful deployment, is heightened.

If you’d like to know more about HCM and how an effective strategy can help you achieve your business and performance goals, download The Bottom Line.

1. BIMCO, ICS (2021) Seafarer workforce report ↩︎

It is hard to overstate the profound impact that ESG and sustainability have had on the business landscape in recent years. Unprecedented public awareness of climate change, coupled with leading financial institutions conditioning access to capital on companies demonstrating strong ESG standards, has brought these issues from a specialist area into a priority for boards and leadership teams across nearly every sector.

The Backlash Against ESG

However, all is not well in the realm of ESG and sustainability. A growing backlash has been building for quite some time, fuelled by rampant greenwashing, a realisation that the presumed link between ESG practices and profitability may have been overstated, and a sentiment — particularly in the United States — that business is becoming ensnared in “woke” politics.

Rethinking Our Approach to ESG

ESG has veered off course. This view may surprise some who know me as an “ESG pioneer” and have heard me advocate for industry’s role in resolving pressing global challenge at forums like COP and the World Economic Forum. However, business cannot solve these issues alone. It has to operate within confines of market economics and regulation. To unleash the innovative force of business, we must refocus the ESG debate on areas of material impact, and policymakers and regulators must step up, take difficult decisions, and create the right incentives. The US Inflation Reduction Act serves as an example of proactively shaping those dynamics, leading several of the world’s most successful green companies to gravitate toward the US. To maintain competitiveness, Europe must follow suit. In the words of a friend and European finance minister, “We have already solved much of the climate crisis, technically. We just can’t seem to solve it politically.”

The Future of ESG: More, but Different

Despite the backlash, claims that “ESG is dead” should be taken with a big pinch of scepticism. ESG has catalysed a real paradigm shift, and there’s no turning back. The future will see more ESG, not less, but it will be different. Business leaders who wish to remain competitive in this evolving landscape must adapt with a sense of urgency to stay ahead of the curve. Looking ahead, three critical shifts can be anticipated:

From Voluntary Standards to Mandatory Compliance

The proliferation of ESG standards has been overwhelming. A 2021 study by E&Y identified 600 different standards. With such a vast smorgasbord of pickings, it has been far too easy to superficially create the appearance of “good ESG” by merely signing up. This will consolidate into fewer, better, and mandatory rules. Initiatives such as the EU’s CSRD (Corporate Sustainability Reporting Directive) and SFDR (Sustainable Finance Disclosure Regulation) will enhance transparency and focus, level the playing field, and shift the perception of ESG from reputation management to compliance and risk management.

Increased Focus on Behaviour and Specific Impact Targets

As an advisor I often meet leaders committed to making a constructive contribution but unsure where to start or focus. Surveys reveal that up to 75% of CEOs lack confidence in their ESG strategies being fit for purpose and aligned with long-term objectives. I often recommend shutting out all the external noise by re-articulating ESG from “Environmental, Social & Governance” to “Environmental & Social Governance.” This shift is not mere semantics; it is a powerful tool to crystallise the critical question: “What are our primary environmental and social impacts as a business, and what governance tools can we deploy to minimise undesirable impacts and
maximise desirable ones?”

ESG should not primarily be about what you do, but how you do it. The oversimplified notion that certain sectors constitute “bad ESG” has proven disastrous. It has forced companies with worldclass environmental stewardship to sell off ‘dirty’ assets to less prudent operators to not be excluded from access to capital, and has led to underinvestments in the energy sector that have contributed to European cost- and energy-security crises. Any business that demonstrates genuine commitment to identify and optimise environmental and social impacts, and does its best to move the needle in the direction of a more sustainable future should be encouraged, not penalised, and should pass the “ESG red-face test” with investors, policymakers, and civil society.

Stakeholder Management as a Priority

As ESG becomes more disclosure and compliance oriented, competitive edge will increasingly lie in how businesses manage stakeholder relations. How well they articulate value propositions, attract resources, and build “political and social license” with stakeholders more demanding and better equipped to scrutinise impacts. The transition to a more sustainable future promises increasingly complex relationships at all levels. Especially in sectors with significant geopolitical, environmental, and social impacts, such as the maritime, energy, and infrastructure sectors where failing stakeholder relations frequently constitute primary reasons for delays or failure.

Final Remarks

Today represents an unsettling race against time in many aspects, yet it is also an exciting period for business leaders. Competitive advantage is increasingly less about financial and operational resources and more about mindset and strategic clarity. Companies that embrace this complex and ambiguous landscape by adopting new ideas and methods, and successfully integrate diverse experiences and expertise into their leadership ranks will punch far above their weight. They are more likely to turn prevailing risks into real opportunities for growth and value creation.

Blog written by Rikard Scoufias

Rikard Scoufias is a board advisor and the non-executive chairman of Greece’s national energy resources company. During his tenure, the state oil & gas company has undergone a significant transformation into a diversified group involved in gas exploration, offshore wind, decarbonisation, and infrastructure. With over 20 years of international experience in strategic and operational roles, Rikard has managed high-stakes political and stakeholder relations on five continents, and is widely recognised for his contributions to handling “license to operate” risks, ESG, and the energy transition. Previously, he served as Country CEO for the Trans Adriatic Pipeline, and was before that a member of BP Plc.’s senior leadership team responsible for BP group’s Government & Corporate Relations in Europe and several of the company’s most challenging global assets.

There is an old British First World War recruitment poster that shows a little girl sitting on her father’s lap with the subscript ‘’Daddy, what did YOU do during the Great War?’’.

Hindsight can deliver harsh judgement on those who did nothing but their best to keep things afloat on a daily basis and to leave some sort of legacy for their children and grandchildren. For shipowners and the shipping community, keeping things afloat is more challenging than most on the outside realise, especially in volatile economic and geo-political conditions. But extraordinary times call for extraordinary measures. And within the context of climate change, the outside is demanding that shipping changes its ways, fast, and that it becomes more green and sustainable. This is a mammoth challenge for a capital intensive industry where supply is complex and change is expensive, very expensive.

But what is sustainability? There is a risk, as with any fashionable term, that sustainability becomes something that we dress up with a single idea but we do not really understand. To illustrate, a respected industry colleague recently said, “currently the only real sustainability show in shipping town is decarbonisation”. To be clear, this was not intended to downplay the crucial task of bringing down Greenhouse Gas (GHG) emissions but to highlight where shipping’s sustainability focus and efforts lie. Decarbonisation is driving the development of digital platforms, alternative fuels and energy efficiency, to name but a few. Further, in terms of governance, one must acknowledge that shipping already has an intensive regulatory environment with multi-faceted requirements which will only intensify (for expedience’ sake we will not delve into these). But sustainability is a much broader subject and it is vital to understand and address it.

The United Nations (UN) defined sustainability as “meeting the needs of the present without compromising the ability of future generations to meet their own needs” (United Nations Brundtland Commission, 1987). To create a common language and agenda, the UN adopted the 2030 Agenda for Sustainable Development and its accompanying 17 Sustainable Development Goals (SDGs). These goals set out the requirements for achieving sustainable development. To enable organisations to measure and report on the impact of their activities on these goals, three subdivisions were identified – environmental, social and governance (ESG). Subsequently, a number of sustainability or ESG reporting formats have emerged, such as the Global Reporting Initiative (GRI).

Across the globe there is an increase in reporting requirements, demanding greater transparency and accountability from organisations. As an example, in the EU the Corporate Sustainability Reporting Directive (CSRD) which came into force in January 2023, requires designated companies to apply the new rules to the 2024 financial year of which reports will be published in 2025. These reports will have to comply with the European Sustainability Reporting Standards (ESRS) and initiatives such as the GRI are ensuring that their users can do so. (At this point you will be forgiven for feeling somewhat overwhelmed with all the acronyms.)

Amongst other, the sustainability reporting process requires that organisations identify and engage with STAKEHOLDERS to create a more accurate picture of the business’ impacts. To make sure that we are all on the same page, the GRI defines stakeholders as “an individual or group that has an interest that is affected or could be affected by the organisation’s activities”. So, who are these stakeholders who are affected and need to be heard? A stakeholder analysis will enable you to identify these but let us touch on two that are highly significant.

At a recent lunch with a few highly respected colleagues who are all ex-seafarers, I asked the question, “what should shipping be most ashamed of?” The response was unequivocal – CREW. Our shipping crews are the backbone of the global economy and yet, whether it be a geo-political crisis, a shipping incident or a pandemic, they are the ones who are most exposed. Over the last 10 years concerns over crew recruitment have grown, with officer shortages worsening. This should not be a surprise. Life at sea is not for the faint hearted and challenges include amongst other, long periods away from home and sailing through conflict zones. Working under threat of attack takes its toll on the crew and a small crew war bonus does not alleviate the effect of that stress which extends to their shore based families and communities.

Another disturbing occurrence reared its ugly head during the COVID-19 pandemic. As the airlines moth-balled their planes, the essential task of moving shipping crew around the world became problematic, at times impossible. But in spite of this, there were Charterers who refused the desperately needed crew changes during their voyage charters. Astonishingly short sighted in terms of safety and inhumane. Healthy, well trained and fairly treated crew are essential for safety and environmental protection. Whilst crew welfare is receiving growing recognition from industry initiatives and some Shipowners, more comprehensive action is needed to meet the industry’s needs and fulfil the SDGs.

The second, despite lacking its own legal status, acts as a collector of stakeholders and is key to our survival – the OCEAN. It plays a crucial role in the carbon cycle, the climate and is a source of food. We are highly dependent on very small prolific marine life forms called plankton. These form the basis of the marine food chain and is a major contributor of oxygen to the atmosphere whilst also removing vasts amounts of carbon dioxide from the air. In short, a healthy ocean sustains life on earth. Accelerated climate change has lead to ocean acidification, increasing ocean temperatures and sea level rise. The Arctic circle is being transformed. And this year has seen another mass bleaching event of coral reefs across the globe. It paints a very gloomy picture.

Shipping has to own up to its own contribution through various forms of pollution which affect the already stressed marine eco-system, including but not limited to noise, air, biofouling, invasive species, plastic and cargo and fuel spills. On the high seas it may go without visible consequences but the impact is evident in coastal communities who rely on the ocean for fishing, tourism and other economic activities.

An excellent example of these communities are the Small Island Developing States (SIDS). The UN designates SIDS as “a group of low-lying island nations that are home to approximately 65 million people who live across more than 1,000 islands” and include well known destinations such as the Maldives, Barbados, Seychelles and Samoa. Their vulnerability to external shocks can be attributed to their remoteness, high dependence on imports and exports and sensitive marine and land ecosystems. It places them in the eye of the environmental and climate change storm. If we are smart we will draw from their learnings and support their efforts to mitigate and restore the damage.

The ocean is shipping’s operating environment. We are dependent on it and we need to participate in maintaining its ability to provide for future generations and in doing so further fulfil the SDGs. Jacques Yves Cousteau pointed out poetically “the sea, the great unifier, is man’s only hope. Now, as never before, the old phrase has a literal meaning: we are all in the same boat.”

Ultimately, we protect what we value. Sustainability starts with drowning out the daily noise and having the courage to put ourselves and our businesses under the looking glass. Even if we are not all required to publish sustainability reports, we must do the groundwork. And if all of this seems too demanding and if the outside world with its pointed fingers seems unreasonable, let us remember that future generations, the ones who sit on our laps, will ask what we did about sustainability and deliver judgement on the legacy that we leave. We need to do more.

So what are some of the things we can we do beyond what we are already doing?

• Make sustainability and ESG a subject of interest, a priority, a modus operandi and investigate and resource the reporting process
• Seek expertise and assistance – commit to educating yourself and your staff and develop an understanding of the impacts that operational and commercial decisions have
• Listen and speak to known and newly identified stakeholders – build trust relationships beyond your commercial network
• Identify opportunities to improve and repair, whether it be setting higher standards of training or operations, participating in research initiatives, sponsorship of reparation initiatives or championing causes – collaborate. And if you need ideas, reach out, I have quite a few and the opportunities are endless

In answer to the question, “is shipping doing enough”, start by asking your stakeholders.

Blog written by Yvette du Preez