For the big firms in the oil and gas industry, skills shortages will be the hot topic of 2014. Engineers and geoscientists, particularly those working subsurface, are in high demand. For example, the Texas Independent Producers & Royalty Owners Association recently reported that the US oil and gas industry alone added 23,000 new jobs in the first half of 2013. Furthermore, the Bureau of Labor Statistics showed oil and gas industry jobs grew 40% in the US between 2007 and 2012, way above the 1% growth in US payrolls over the same period. Despite all the positive news, skills shortages still appear to be much discussed in oil and gas. But is there really a skills shortage, or do the major players simply need to adopt a different approach to recruitment?

Too often in the modern world securing talent appears to be a low priority. However, it’s crucial to develop talent pipelines, especially in the oil and gas industry. It’s the geoscientists who establish what’s underneath the ground and how much of it there is, and it’s these findings that convince organizations to make the investment and drill. Consequently, it could be argued that technical professionals in oil and gas are the people who help make huge investment decisions, and the penalties of missing out on the top-drawer talent could potentially be enormous for firms. It’s for this reason that base salaries in some countries such as Canada, New Zealand, and the Netherlands rose above US $120,000 in 2012, according to oilprice.com, reflecting the importance of securing the right technical staff.

These lucrative opportunities aren’t centered on one area. In the modern oil and gas industry, job opportunities are truly global. Professionals have the chance to work in a vast range of locations. And, because of the varied nature of the sector, it really comes down to individual choice. Often this is influenced by family or geography, but usually it’s down to what employers are paying.

Currently, the same people are in demand across the globe with firms of all sizes. There is a particular thirst for subsurface engineers and geoscientists; however, there’s also a need for deepwater engineers as advances in technology have meant drilling is now possible in the most challenging locations. As a result of this ever-growing demand, companies are trying harder to hold on to talent. The increased use of retention bonuses and counter-offers has shown just how important technical professionals are to many firms. If a leading engineer was to leave an organization, it not only means the company loses the individual’s expertise, but the move could also perhaps be strengthening one of its rivals.

The ideal candidate

So what are firms looking for? The ideal candidate is someone who has demonstrated a stable career path across a number of locations. The major firms are constantly on the lookout for experienced professionals and engineers who can show varied drilling histories from all over the world, which will always be sought after. International experience is as important as it’s ever been as organizations want a guarantee that their new hire can work in a range of locations and cultures, sometimes in hostile environments. Those with experience with and an appetite to work in East Africa are in particular demand at the moment, and this trend is expected to continue as firms manage the problems with security and infrastructure in the region. So if the opportunities are available, why are the supermajors still struggling to recruit the right professionals?

Barriers to recruiting

One of the reasons behind the perceived skills shortage could be the increasing prevalence of internal job moves. Some of the big firms are providing opportunities to move internally to a wide variety of locations. With the focus on retaining talent becoming ever more important, engineers are increasingly choosing a change of location over a change of employer, and this could, partially at least, explain the lack of available professionals in the external market.

More than anything, the number of companies in the industry has grown hugely over recent years due to new technologies and discoveries, and some believe this led to the perceived skills shortage. More firms operating in the industry mean a diluted talent pool, which ultimately leads to less expertise and harder-to-find specialists. This is particularly the case with subsurface professionals, where there’s already a smaller pool of experts. As a natural result of the lack of available and qualified talent, much of the focus has turned to contract roles as organizations look to secure the top professionals. These aren’t typical short-term contract roles; many last up to two to three years and pay on average a third more than permanent positions. The benefits and job stability may not be the same, but in an industry where career decisions are usually motivated by money, this makes a big difference.

And in this hugely competitive environment, it appears that the smaller players are winning the war for talent. So why are the big companies missing out?

Brand isn’t everything

Currently, the supermajors seem to be too reliant on the power of the employer brand. They have to realize that this doesn’t carry as much weight in today’s market. As a result, they need to be looking for more ways to sell themselves to candidates through fast and efficient recruitment processes. If professionals are left waiting around for too long or don’t think the organization is doing enough to get them to join, they could quite easily find a more attractive job offer with a smaller, more agile company. Consequently, the big players have to make their decisions more quickly.

Too often, the problems are as basic as the mishandling of applications. Anecdotal evidence has suggested that in some companies, human resource teams without a full understanding of the technicalities of specific roles are ruling out competent candidates, and in today’s market this just isn’t sustainable. Technical professionals need to be involved at all levels of the recruitment process to ensure this doesn’t happen and that talent isn’t slipping through the cracks.

If the supermajors want to get their hands on the best professionals in the market, they also need to increase their understanding and awareness of current market rates and salaries. Proposed rates from bigger companies are sometimes below what is expected for top-level professionals. While it isn’t surprising that smaller firms pay more (without this happening, they wouldn’t have a place in the market), it’s still a point of interest.

There also needs to be more detailed and clarified role specifications so that professionals have a clearer understanding of what’s required of them when changing roles. These need to be more definite and focused not only on technical ability but also on “softer” skills. It’s often underappreciated how big the cultural and social shift can be when moving between locations, and this is something that needs to be looked at in more depth. While some companies are very good at onboarding and provide superb packages for their employees, the challenges and requirements of the role need to be more clearly outlined in specifications.

More than anything, the entire recruitment process has to be compressed. At the moment it’s too drawn out, especially at the supermajors. Far too often weeks, sometimes even months, may lapse between interview stages, and this won’t impress potential employees in any discipline, let alone one where they have ample opportunities available to them in a range of attractive locations. The period between the second and third meeting, in particular, needs to be shortened as this is where candidates are often drawn away by appealing offers from more nimble firms.

So is the skills shortage a reality or has it been created because of inefficient human resources processes? The talent is out there, but it has to be attracted and used by the big firms. Any skills shortage that may happen in the future will probably be avoidable; it’s up to the big players to take note.

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