The oil and gas industry is feeling the effects of the most severe downturn since the mid-1980s. The past three years have been characterized by significant headcount reductions around the globe as the sector responded to collapsing activity levels. The risk this industry now faces is eroding its capability to deliver large and complex projects, leaving a skillset and experience void that will take a long time to recover.

It is not the first time the industry has seen this trend in action. This time, however, it’s different. There are several other factors that are contributing to a potential “perfect storm” for the future of skills and capability in the oil and gas industry that need to be addressed sooner rather than later.

The downturn has affected the perception of the industry across the world. The repetitive cycles of hiring and firing throughout the industry’s downturns have created a barrier to entry for tomorrow’s workforce. The same fears of job insecurity are felt in the existing workforce, and the industry risks losing highly sought-after and curated talent to other more attractive and, perceptively, more secure sectors.

New generation

Capacity-driven adjustments are not the only reason for losing critical skills. The industry also is facing a generational change with the long foreseen “great crew change” beginning to take effect. Many of the most experienced industry veterans are now choosing to retire from the sector and will not return. It is imperative that companies act now to ensure that this knowledge and experience is effectively transferred to the next generation.

It is fair to say that the industry has not been good at managing its collective public relations in the past. There is a poor perception of oil and gas, especially regarding its environmental credentials. The emerging generation cares deeply about social and environmental responsibility and is asking why they should be tempted to join an industry with an apparently ambiguous environmental focus.

Combined, these factors raise concerns about the future capability and what will happen when the market inevitably recovers. This urgent problem needs to be addressed collectively and not in isolation.

Initiating change

The strength in the SPE Offshore Europe conference program is its ability to bring decision-makers and leaders together, helping to initiate dialog and changes in their own businesses. It is a forum where new ideas are not only disseminated but where participants get the opportunity to tackle the really big questions that impact us all.

When it comes to the issue of future talent, the conference brings several different voices together to debate how the industry, as a whole, is going to attract, develop and manage a sustainable, capable and skilled workforce going forward.

In parallel with this, companies also need to better understand the capabilities the industry requires in the future. Although there will always be an ongoing need for traditional engineering and technical roles to build the infrastructure and maintain it, a shift already has occurred in this area. Much of the workforce now operates in a high-tech, clean environment—radically different to the early days of oil and gas. There is now more of a requirement to meet the exponentially increasing demand for world-class digital skills and Big Data analysis as the industry continues to evolve.

Apprentices and graduates fresh out of school or a university can bring a new edge to the industry; their appetite for advanced technology and digital enhancement can help drive the sector forward. Combining old and new knowledge can result in new ways of digitalizing and automating work processes which, again, can increase efficiency and reduce costs.

Attraction, retention

At this point the industry needs to understand how to find and attract these people in the first place. How does it retain and develop a completely different profile of recruits than the ones that would have been recruited before? As the industry changes, is it able to change the traditional view of oil and gas careers? Can it offer the type of working environment and benefits that young people expect from an employer today?

When it comes to the future talent for the industry, companies need to adopt a global perspective. Perhaps they will need to look for talent beyond the traditional oil and gas geographies.

In this new world where portfolio careers are much more prevalent and the idea of a “job for life” is long gone, the industry needs to demonstrate to prospective employees that the skills they can develop within oil and gas are absolutely transferable to a host of other sectors. And, of course, the reverse also applies. The industry needs to have a fl exible approach to recruitment, looking to attract those who have developed transferable skills in other sectors and can add new innovation and capability to the energy industry.

Ultimately, the industry needs to change how it approaches its skills needs. The oil price drop has forced the industry to look hard at its delivery structures, cost base and business models. It now needs to take the opportunity to put as much effort and focus into rethinking its approach to finding, developing and retaining tomorrow’s talent for the future of companies and the industry.

The downturn has been extremely painful, but there will be more pain in the future if companies don’t open the debate and address this skills issue now.

During SPE Offshore Europe 2017 representatives from across the industry will participate in a panel discussion on tomorrow’s talent. This will explore in greater detail the exhibition and conference theme of “Embracing New Realities: Reinventing our Industry.” This theme applies directly to the skills arena. The industry needs to embrace the new reality it faces, and it needs to reinvent how it addresses the issue of skills and talent to safeguard a sustainable future.

Have a story idea for Industry Pulse? This feature looks at big-picture trends that are likely to affect the upstream oil and gas industry. Submit your story ideas to Group Managing Editor Jo Ann Davy at jdavy@hartenergy.com.

Comments