Q3 2022 Market Review
Category: Insights

Q3 2022 Market Review: Energy Crisis, Capturing Value and Talent

HC Group’s Q3 2022 Market Review is now available, with the latest notable people moves and talent market trends in the commodities world.

The relentless energy crisis in Europe sparked by the war in Ukraine has led governments to step in by bailing out energy companies, while grappling with mounting political and social tension due to inflation and the rising cost of living. This crisis has also triggered a heated debate on the role of trading markets – and on their potential failures. In the Editorial Comment, in our Q3 2022 Market Review, we call on the need for the commodity sector and its people to take their rightful place and act as part of the solution. 

Meanwhile, across HC Group’s energy practice, talent demand has been driven by companies’ strategies to capture value and opportunities, at a time when many have been struggling with liquidity constraints and carefully revising their exposure to short-term price spikes and volatility.

Increased talent demand in the refining segment is a prime example. HC Group’s practices in the Americas, Europe and Asia have seen interest from a broad section of participants including trading houses, majors, funds and even investment banks. But as is the case for other markets like gas and LNG, recruiters have been facing high retention rates. Key talent has been reluctant to walk away from record bonuses anticipated in the new year following strong trading performance.

Despite the ongoing turmoil across global markets, the energy transition remains a priority with talent requirements taking various forms depending on products and sectors.

Meanwhile, despite the ongoing turmoil across global markets, the energy transition remains a priority with talent requirements taking various forms depending on products and sectors. Specifically, HC Group has been actively supporting companies who are either building or expanding their presence in the renewable fuels segment. On the carbon front, the growth of voluntary markets has kept our practices busy across various regions. In Latin America for instance, HC Group has also been active in filling carbon market positions to support clients in the agriculture sector who are leading initiatives to provide carbon certificates.  

In the metals and mining sector, the energy crisis is having many ripple effects for metals and mining manufacturers who have had to shut down capacity due to the costs of electricity and growing threats of fuel shortages. While some recent closures in Europe have had no major impact on the workforce, HC Group expects a potential influx of talent should production capacity be further curtailed in coming months. In Asia, HC Group has seen a resurgence in coal talent with renewed interest from small companies keen to capitalize on higher coal and energy prices.

HC Group Agriculture practice was busiest supporting clients in the renewable fuels and plant protein sectors in Q3 22. But beyond roles that support companies’ strategies to reduce their carbon footprint, origination talent and skillsets remain very much in demand. This forms part of efforts to find alternative sources of grains, oilseeds and other key agri products as higher energy and commodity prices in the wake of Russia’s invasion of Ukraine continue to disrupt trade flows.

In Corporate Functions, the turmoil that has gripped commodities due to geopolitical drivers is also fuelling demand for compliance, risk and insurance talent demand to manage the impact of sanctions and other legal restrictions caused by the war. Liquidity constraints have increased demand for expertise and skillsets in trade finance, as well as in legal and tax and M&A expertise.

The growth and sophistication of commodity trading – notably through digitalization – is also exacerbating new risks in the current geopolitical environment. Cybersecurity risk is one of them. The strategic nature of energy, commodities and other resources participants makes them an easy target for cybercriminals. But as observed by HC Group’s Technology practice, recruiters are faced with a serious talent shortage and in some cases, the need for companies to rethink the very structure and organization of their operations, trading, risk and technology teams. 

View the full issue of HC Group’s Q3 2022 Market Review here