The oil and gas sector is no stranger to uncertainty. It has weathered crisis after crisis. Complex political, economical, and geographical conflicts are everyday obstacles. However, the sector faces a new and pressing problem heading into the next decade: an aging workforce and a disinterested youth.
Half of the workforce is set to retire in the next 5 to 7 years. Meanwhile, the number of students heading into oil and gas in the UK has decreased by 61 percent, according to the Higher Education Statistics Agency. These forces have created a skills crisis, which 40 percent of employers believe is already besieging the industry.
It’s not a problem that can be solved overnight. To attract fresh talent back onto the rigs, companies will have to make meaningful changes to recruitment, training, and retention practices.
Investment in Digital
Digitisation has bled into every industry, including oil and gas. There’s an increasing demand for individuals who can parse Big Data and work with technologies like automation and AI-enabled analytics. Subsequently, more workers also expect sufficient training for these skills. The rapid progress of automation means companies have to upskill workers to handle these new processes and tools–both a challenge and opportunity for companies who can provide proper training.
Developing digital skills may also help oil and gas attract engineers back from its fiercest competitor, tech firms. There’s a large overlap between the skills needed to go into tech and oil and gas, and the former is siphoning talent away from careers which some may see as “dirty” or blue-collar work.
Earlier Approaches to Training
Companies should invest more in their employees to increase retention and engagement. At oilfield services firm Schlumberger, upskilling even takes precedence over job cuts. “When times are tough we consider sending people away for a year or two to receive an education before cutting jobs. It means we don’t lose talent, and our employees have an opportunity to develop,” says Schlumberger M&A portfolio manager Ghassan Mirdad.
An even earlier approach is best. According to the Global Energy Talent Index, a part of the country’s shortage crisis can be blamed on cuts made to apprenticeships and graduate recruitment during a downturn. Clearly, companies need to continue investing in recruitment and training no matter the state of demand.
Prioritisation of Fit
Pressured by a shortage of experience and talent, some companies are hiring professionals who come from related fields, but have no experience and therefore do not know what to expect from a career in oil and gas. However, hiring for the short term can create more problems than it fixes. A mismatch between skill and purpose can leave companies short-staffed during crucial periods of development.
Understandably, suppliers are nervous about the increasing difficulty of finding experienced workers. Being selective seems counterintuitive. But to find and retain qualified candidates, companies need to take a long-term approach to recruitment. Ensure that prospective candidates understand the timelines of a project and expectations of the job.
Focus on Stability and Balance
The oil and gas sector is lucrative, yet also highly volatile. Boom and bust cycles have created a culture of hiring en masse during highs and cutting jobs when the margins tighten. The next generation of workers wants a stable job and good work-life balance, neither of which are strengths of oil and gas. Even incumbents state job instability as their number one reason for wanting to leave oil and gas.
Management also seems to have a poor grasp of what new graduates want from a career in oil and gas. A majority of executives think a large paycheck carries the most heft. Yet in actuality, pay is ranked nearly as high as work-life balance, with job satisfaction and stability not far behind. Oil and gas will need to reevaluate workplace practices if it wishes to keep today’s workforce satisfied.
Retiring from Retirement
The great turnover will be driven by retirement, but one of the ways to staunch it may be to literally come out of it.
Perennials are a new demographic of workers aged 55 or older. The reasons why these individuals are choosing to go back to work are complex. Some are driven by financial necessity, while others crave the social and cognitive stimulation of being part of the workforce. Whatever the reason, perennials not only represent willing bodies, but also a trove of experience that can be used to train the next generation of oil and gas employees.
Encourage Diversity
Women represent only 15 percent of oil and gas. Failure to fill the ranks with more can further exacerbate the skills shortage. “By 2025, we are going to be a millennial and generation Z workforce that is inclusive and diverse. If your business is not, you are going to get bottom-of-the-barrel workers,” says one oil and gas executive in an interview with research firm McKinsey.
Promoting diversity goes beyond optics and good PR. Companies with a significant number of female leaders outperform others, according to McKinsey. Like perennials, women represent a yet untapped demographic by oil and gas.
The great crew change is only a symptom of larger problems for oil and gas. To turn the tide against an eroding public image and decreasing interest from young professionals, the sector will have to adapt a fresher, long-term approach to hiring, training, and retention.
