FACED WITH one of the biggest periods of investment and expansion in its history, the global oil and gas industry is being held back by its failure to attract, recruit and retain highly skilled staff
FACED WITH one of the biggest periods of investment and expansion in its history, the global oil and gas industry is being held back by its failure to attract, recruit and retain highly skilled staff.
A global report has found that, over the past 12 to 18 months, oil prices, planned investments and industry demographics have combined to stretch industry resources to breaking point with the real potential of stalling the oil and gas boom.
The average employee working for a major operator or service company is 46 to 49 years old, and with the average retirement age for the industry 55 years, the industry faces a crisis over the next decade as more than half of the employee base leaves the workforce.
The industry’s ability to increase the workforce and replenish experience is limited by years of contraction, perceived instability and an image problem as people are reluctant to become part of an industry associated with monopolies, environmental pollution and price fixing.
“The industry is now paying heavily for this short-sightedness, treating human resources like a tap that can be turned on and off at will,” said Varya Davidson, principal at Booz Allen Hamilton, which produced the report.
The shortage affects all positions from rig workers to senior scientists and engineers. With oil and natural gas prices soaring, companies are expanding and reactivating everywhere, and are confronted with a shortage of skilled workers who can man and service the installations.
It’s not merely a lack of hands but a capability shortage as well. With little slack in the system, the report found senior employees are driven to deliver through to retirement, with ever less time to transfer their accumulated knowledge. As overstretched companies are forced to do more with less, on-the-job training, mentoring and coaching have become virtually things of the past.
This is no longer an isolated people issue, but presents a strategic business challenge requiring joint ownership between technical, operating and HR leaders, the report found.
Targeted interventions are essential and management needs to make time to carefully assess the business impact of skills shortages and consider the options available to build capability. Companies need to determine how best to recruit, resource, develop and retain their staff, with HR, technical and operations functions owning and working the problem together, according to the report.
The talent issue is so significant that it has the potential to be a factor in reshaping the industry, according to Peter Parry, head of the global upstream business for Booz Allen Hamilton.
“This will take the industry a decade to sort out. Some players who set strategies and really find the key to develop and retain talent will build significant competitive advantage and this may even drive consolidation if companies with projects and capital simply can’t find the skills to develop and operate them,” he said.
