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FeedsHome: Issue 10 2011 › Cover Story › A personnel problem
A personnel problem
04/11/2011 | Channel: Human Resources
For oil and gas companies worldwide, recruitment remains one of the key challenges in the industry
For some time it has been widely reported that the industry is facing a critical skills challenge, an endemic problem based around finding new, fresh recruits to cover and take over the jobs that are soon to be left by the ageing workforce that categorises the oil and gas industry employment map. While the challenges of sourcing personnel have been well documented the evolving market in recent years has seen the employment map, and indeed the oil and gas industry itself, experience further developments that have certainly had an impact.
For example, major trends in the industry between 2008 and 2010 have seen the global downturn effect oil and gas spending, operations and the structure of many of the majors. We have witnessed a number of challenging years for employers and candidates in the oil and gas industry that have seen many companies approaching the area of recruitment with a ‘guarded optimism’ that has not been witnessed before.
Similarly, as many of the world’s leading players approach new projects with caution recruiters have highlighted the rise in job opportunities in niche areas such as geoscience, marine/diving/ROVs, management roles and IT. While these areas are indicative of increased hiring of sorts it means that some of the key traditional roles, such as engineering, are still stalling at the recruitment phase.
This, of course, represents a significant problem. Going forwards the power sector is critical to achieving some buoyancy in the European, and global economy, particularly in the UK where the Government’s energy challenge targets will face a severe test of delivery if oil and gas companies have continued problems recruiting. An ageing workforce, replacement and growth of infrastructure, rapid advancement of new technologies and strong competition for ‘talent’ in the marketplace are all threatening to impact the energy industry in the coming years.
The key challenge for companies at present though is in managing the correct approach to recruitment. In light of the global economic crisis, a new dynamic has been added to the challenges that oil and gas companies face. As noted, there remains an urgent need to fill skilled positions at many of the major players in the industry, but now these same companies have to balance the need to fill such positions with the caution and care that is necessary in a time of global instability.
For example, the last time oil prices crashed significantly, in the 1980s, there was a considerable drop in employment of new personnel in oil and gas based careers, and also in enrolment at universities on courses related to the industry, such as chemical engineering and geophysical science. However, it is believed that even if the current oil prices drop further the demand for new resources, and for further exploration will remain strong. What remains to be seen is how companies will address recruitment in the current climate.
One of the key areas of concern for potential candidates noted here is that while oil and gas companies are continuing to hire – it may be a challenge, but is essential after all – some of the decision processes and accompany recruitment logistical decisions are taking a lot longer, or going through a far more complex process. While the interviews are still taking place and job placements are occurring, companies are paying far greater attention to the quality of the individuals, as ensuring that they make the best investment possible in the current climate is vital. Previously, in a period where there was an extreme dearth of talent and an overriding need to make job placements companies could afford to be a little more flexible, but there is little doubt that this approach has certainly changed.
During the recruitment phase it is the quality of the individual that has always been paramount for energy companies when hiring. Of course, new employees have the relevant qualifications and the desired level of knowledge to take on a role, but experience is a factor that cannot be simply learned, particularly in the fast paced, highly evolving E&P business.
Unfortunately for companies, at present that experience lies in it ageing workforce, the older generation of oil and gas workers that has developed alongside the industry. The ageing workforce, without question, remains one of the major issues for the oil and gas industry. It is estimated that upwards of 50 per cent of industry employees will be eligible to retire in the next ten years and that, while the education system seems to be working hard to attract young people onto suitable university courses, there’s a huge gap between new entrants to the industry and those nearing retirement that is simply not being filled.
Globally, engineers with more than ten years of experience are in short supply, which means that oil and gas companies have been forced to adapt their recruitment and personnel management strategies to accommodate this issue. While, as discussed, the economic climate means that employment is certainly not progressing at anything like the pace needed, which will be an issue as the retirement of ageing workers approaches, companies have taken some manageable steps in the right direction. For example, mentoring and skills transfer programmes between entry level and post-retirement age workers have, in some instances, helped to speed up the rate at which skills are acquired, while the value of transferable skills has increased dramatically.
While this issue has been a focus for companies for some years, the rapid pace of development in the industry, together with the changing nature of E&P has given rise to some other challenges that need to be addressed. For example, many commentators have stated that the very pace in which technology is developing in the sector is, in fact, exacerbating the problem. It must not be forgotten that it takes many years to train an individual to the required standard to operate safely and effectively in an offshore environment, but recruiters are stating that so fast is the innovative nature of meeting energy demand that the training and career introduction can, in some respects, not keep up with industry expansion.
In this instance, some more proactive companies and recruitment agencies are arguing for the training and promotion of oil and gas-based skills for younger people, with some government organisations, such as the National Skills Academy working to introduce energy sector topics in schools and colleges. One example of this being the National Skills Academy for Power, which was created to specifically tackle this issue by creating a network of training opportunities, apprenticeships and trade and career fairs to make the prospect of a career in oil and gas more appealing to young students.
Of course, with the development of the industry comes the movement of exploration and production to more hostile environments, a factor that some argue is influencing the decision of young workers, which may be behind the reason for a drop in graduates choosing a career in oil and gas. Added to this is the recent geo-political unrest and problems in the Middle East and African states, many of which have significant oil and gas industries, such as Iraq and Libya. Entering such regions has always been a challenge, but companies are now faced with the added complication of making extreme climates or high-risk regions seem attractive to possible employees.
While there are a number of issues facing companies in the area of recruitment at present, there are naturally areas in the industry where young recruits are in urgent need. Alongside the previously mentioned growing niche areas, one such sector is decommissioning, which is rapidly developing its talent pool, particularly in the North Sea region. There are of course both positive and negative aspects to such developments. For example, with decommissioning estimated to be a multi-million pound industry in the near future, employment is essential for companies operating in the field. What could potentially be a problem however is that decommissioning, much like IT, diving or ROV operation requires a unique skill set that differs to the requirements of, say, and E&P engineer. With this development comes the necessity therefore for further variation of training programmes, new skill sets to be learned and an increased spreading of the already thin reserves of potential new intake to the industry.
So, what does this mean for the future? At present there is still a degree of caution within some of the major companies with regards to recruitment, although it remains to be seen what affect this caution could have in the long-term. Ultimately, the demand for oil and gas is only going to increase in the future, and with it, the demand for the personnel that are able to provide those resources. Some industry analysts even believe that the economic crisis could in fact have a positive effect on employment, explaining that during a period of economic stability many graduates seek employment away from traditional vocations such as engineering or the sciences. Conversely, in the current climate roles with long-term prospects, such as those provided in the energy sector could seem more appealing. For oil and gas companies, solving the recruitment riddle is about balance and hard work. There needs to be a steady influx of new recruits to the industry to ensure future survival, while at the same time businesses must work hard at the grass roots level to ensure that in the long-term we ca eradicate any shortages that may be present.
For example, major trends in the industry between 2008 and 2010 have seen the global downturn effect oil and gas spending, operations and the structure of many of the majors. We have witnessed a number of challenging years for employers and candidates in the oil and gas industry that have seen many companies approaching the area of recruitment with a ‘guarded optimism’ that has not been witnessed before.
Similarly, as many of the world’s leading players approach new projects with caution recruiters have highlighted the rise in job opportunities in niche areas such as geoscience, marine/diving/ROVs, management roles and IT. While these areas are indicative of increased hiring of sorts it means that some of the key traditional roles, such as engineering, are still stalling at the recruitment phase.
This, of course, represents a significant problem. Going forwards the power sector is critical to achieving some buoyancy in the European, and global economy, particularly in the UK where the Government’s energy challenge targets will face a severe test of delivery if oil and gas companies have continued problems recruiting. An ageing workforce, replacement and growth of infrastructure, rapid advancement of new technologies and strong competition for ‘talent’ in the marketplace are all threatening to impact the energy industry in the coming years.
The key challenge for companies at present though is in managing the correct approach to recruitment. In light of the global economic crisis, a new dynamic has been added to the challenges that oil and gas companies face. As noted, there remains an urgent need to fill skilled positions at many of the major players in the industry, but now these same companies have to balance the need to fill such positions with the caution and care that is necessary in a time of global instability.
For example, the last time oil prices crashed significantly, in the 1980s, there was a considerable drop in employment of new personnel in oil and gas based careers, and also in enrolment at universities on courses related to the industry, such as chemical engineering and geophysical science. However, it is believed that even if the current oil prices drop further the demand for new resources, and for further exploration will remain strong. What remains to be seen is how companies will address recruitment in the current climate.
One of the key areas of concern for potential candidates noted here is that while oil and gas companies are continuing to hire – it may be a challenge, but is essential after all – some of the decision processes and accompany recruitment logistical decisions are taking a lot longer, or going through a far more complex process. While the interviews are still taking place and job placements are occurring, companies are paying far greater attention to the quality of the individuals, as ensuring that they make the best investment possible in the current climate is vital. Previously, in a period where there was an extreme dearth of talent and an overriding need to make job placements companies could afford to be a little more flexible, but there is little doubt that this approach has certainly changed.
During the recruitment phase it is the quality of the individual that has always been paramount for energy companies when hiring. Of course, new employees have the relevant qualifications and the desired level of knowledge to take on a role, but experience is a factor that cannot be simply learned, particularly in the fast paced, highly evolving E&P business.
Unfortunately for companies, at present that experience lies in it ageing workforce, the older generation of oil and gas workers that has developed alongside the industry. The ageing workforce, without question, remains one of the major issues for the oil and gas industry. It is estimated that upwards of 50 per cent of industry employees will be eligible to retire in the next ten years and that, while the education system seems to be working hard to attract young people onto suitable university courses, there’s a huge gap between new entrants to the industry and those nearing retirement that is simply not being filled.
Globally, engineers with more than ten years of experience are in short supply, which means that oil and gas companies have been forced to adapt their recruitment and personnel management strategies to accommodate this issue. While, as discussed, the economic climate means that employment is certainly not progressing at anything like the pace needed, which will be an issue as the retirement of ageing workers approaches, companies have taken some manageable steps in the right direction. For example, mentoring and skills transfer programmes between entry level and post-retirement age workers have, in some instances, helped to speed up the rate at which skills are acquired, while the value of transferable skills has increased dramatically.
While this issue has been a focus for companies for some years, the rapid pace of development in the industry, together with the changing nature of E&P has given rise to some other challenges that need to be addressed. For example, many commentators have stated that the very pace in which technology is developing in the sector is, in fact, exacerbating the problem. It must not be forgotten that it takes many years to train an individual to the required standard to operate safely and effectively in an offshore environment, but recruiters are stating that so fast is the innovative nature of meeting energy demand that the training and career introduction can, in some respects, not keep up with industry expansion.
In this instance, some more proactive companies and recruitment agencies are arguing for the training and promotion of oil and gas-based skills for younger people, with some government organisations, such as the National Skills Academy working to introduce energy sector topics in schools and colleges. One example of this being the National Skills Academy for Power, which was created to specifically tackle this issue by creating a network of training opportunities, apprenticeships and trade and career fairs to make the prospect of a career in oil and gas more appealing to young students.
Of course, with the development of the industry comes the movement of exploration and production to more hostile environments, a factor that some argue is influencing the decision of young workers, which may be behind the reason for a drop in graduates choosing a career in oil and gas. Added to this is the recent geo-political unrest and problems in the Middle East and African states, many of which have significant oil and gas industries, such as Iraq and Libya. Entering such regions has always been a challenge, but companies are now faced with the added complication of making extreme climates or high-risk regions seem attractive to possible employees.
While there are a number of issues facing companies in the area of recruitment at present, there are naturally areas in the industry where young recruits are in urgent need. Alongside the previously mentioned growing niche areas, one such sector is decommissioning, which is rapidly developing its talent pool, particularly in the North Sea region. There are of course both positive and negative aspects to such developments. For example, with decommissioning estimated to be a multi-million pound industry in the near future, employment is essential for companies operating in the field. What could potentially be a problem however is that decommissioning, much like IT, diving or ROV operation requires a unique skill set that differs to the requirements of, say, and E&P engineer. With this development comes the necessity therefore for further variation of training programmes, new skill sets to be learned and an increased spreading of the already thin reserves of potential new intake to the industry.
So, what does this mean for the future? At present there is still a degree of caution within some of the major companies with regards to recruitment, although it remains to be seen what affect this caution could have in the long-term. Ultimately, the demand for oil and gas is only going to increase in the future, and with it, the demand for the personnel that are able to provide those resources. Some industry analysts even believe that the economic crisis could in fact have a positive effect on employment, explaining that during a period of economic stability many graduates seek employment away from traditional vocations such as engineering or the sciences. Conversely, in the current climate roles with long-term prospects, such as those provided in the energy sector could seem more appealing. For oil and gas companies, solving the recruitment riddle is about balance and hard work. There needs to be a steady influx of new recruits to the industry to ensure future survival, while at the same time businesses must work hard at the grass roots level to ensure that in the long-term we ca eradicate any shortages that may be present.
