The shale gale has brought many positives to the U.S. and, obviously, the oil and gas industry, but it has not been without its challenges. The most visible are hydrocarbon opponents who seek to stall pipeline and other infrastructure projects, who want to eliminate industry practices such as hydraulic fracturing or who endeavor to severely restrict the industry’s ability to move volumes both domestically and abroad through legislative and regulatory action.

The current downturn in prices is a familiar challenge that the industry faces. An important question is will the industry have the staffing it needs when the downturn ends.

The war for talent that is slowly but surely catching up to the industry goes back to lower oil prices in the 1980s and 1990s that saw the elimination of many positions, especially those with less seniority.

Many workers left the sector and students chose other career paths.

The recent boom has been a double-edged sword with companies needing more workers to sustain recent growth, but facing the impending retirements of an aging workforce.

While oil and gas companies were able to overcome the challenges posed by this talent exodus as unconventional technology unlocked more and more volumes that were previously unrecoverable, activity increased to the point that firms needed to begin to recruit new workers.

The downturn

The downturn in crude oil, natural gas and NGL prices is causing some companies to reorganize while others are looking further out after a price recovery and are still actively recruiting, Whitney Brady, manager, oil and gas division—Americas at Faststream Recruitment Group, told Midstream Business. Faststream is a global recruiting firm focused on niche vertical markets and sectors, including oil and gas, shipping, maritime and marine, offshore crew, the built environment and architecture and interior design.

“Some of our clients will use the low oil price as an opportunity to reorganize and reshape their organizations. It’s a great time to look at who you need, and who you don’t need. Other companies are using this as a time to take a longer-term view, and are partnering with recruiting firms to go out and find talent and build bench strength. So while there is a lot of bad news out there, there are still a lot of companies hiring and will continue to do so throughout the year,” she added.

She aid that companies can’t over-hire in this environment. Instead, they need to adopt a flexible staffing atmosphere, which includes using contract workers. These workers are used heavily for offshore work, but not as much onshore. “More and more candidates are going to have to be open to doing contract work. Companies are going to have to look at this talent pool of available people who have been laid off and are open to contract work,” Brady said.

Despite the downturn, midstream companies are still executing on expansion projects that were already in place. Should prices remain challenged in the second half of 2015, it is possible that more companies will push some projects back. However, experts in the sector are still highly prized.

Retention

Keeping good workers may be a challenge in the current environment. Thus far, the industry has worked around the talent gap in the midstream and in the downstream through various means, including international recruiting, working with colleges and universities to develop new curriculum focused on unconventional production, offering tuition assistance to high school students and by retaining more experienced workers through incentives and improved benefits.

The most obvious way to retain employees is through improved pay and bonuses, as well as continued advancement opportunities along with other benefits such as stock options, improved insurance and matching 401(k) programs.

However, the time is coming for companies to really focus on making the handoff from one generation of workers to the next. “Preparing for the ‘big crew change’ is something that every company really needs to work on,” Brady said.

Companies have also been active in not just recruiting new workers to the industry, but also trying to regain some of the workers that left the industry during the aforementioned downturn. Their experience is still helpful but the leap in technology still increases the likelihood of retraining.

Energy’s complexity

In many ways energy workers are similar to those in other industries, especially biotech and transportation, who are recruited because their skills are transferrable to the energy industry. However, the sheer complexity and uniqueness of the oil and gas industries ensure that steep learning curves are still to be expected.

The good news is that even though more experienced workers are seeking to reduce their work schedules, they are willing to consult for their employers and participate in mentor programs to train younger or newer workers.

“Mentor programs are huge for these companies because it offers an opportunity for that experience and knowledge to be passed on to the next generation of workers,” Brady said. While workers have a finite number of years in their lives for their careers, their insight is invaluable and can be passed along to help their companies grow.

One of the biggest issues that companies involved in oil and gas production face has been finding workers willing to travel or be away from family. Fortunately, this can be a draw for younger workers who want to experience more of the world, Brady said.

An important tool for both companies and recruits is utilizing an internship program that will help prepare college students for work in the industry as well as acclimate them to a company’s culture and operations while also giving companies a feel for their potential. “Interns will frequently have the opportunity to apply for a position at the end of the internship. It’s a great tool for both parties,” she said.

Well capitalized and experienced industry leaders who have been through down cycles before are seeking to take advantage by getting their foot in the door in various regions through lower cost acquisitions, which could create new alternatives for workers. There will be definite winners and losers with the LNG sector being one of the big winners because of the amount of activity taking place and the longer view that these projects require, according to Brady.

Frank Nieto can be reached at fnieto@hartenergy.com or 703-891-4807.

Rewarding Experience

By Frank Nieto

Retaining employees in a competitive market can be difficult, but integrated rewards programs are proving successful.

Clearly, benefits and room for advancement are a major part of these efforts, but another way to combine all of these efforts is through employee recognition platforms that involve employees. Not only can these programs help to retain employees, they also serve to motivate them to continue to produce high-quality work.

The industry wasn’t among the first to adopt social media like Facebook, GlassDoor and YouTube to recruit talent, but it has begun to embrace this medium and is quickly playing catch-up as companies are now utilizing social media for employee engagement and retention.

One company that helps to manage these initiatives is Achievers, which builds social human resources software similar to Facebook and other social media outlets and helps to build an employee success platform that companies can use to reward employees for hitting goals or living company values. Started in 2002, Achievers serves more than 200 companies and employees in 110 countries. Many of these companies are large, multinational corporations.

The rewards offered through the platform come in the form of points, which can be redeemed for real-world items such as Apple iPads, gift card and trips from Expedia.

“Our peer-to-peer recognition system allows co-workers to recognize work that is specifically tied into company values, and it will show up in the employee’s profile that highlights all of your accomplishments in the workplace,” Razor Suleman, Achievers’ founder, told Midstream Business.

Through a concept it calls “LOVE: Living Our Values Every Day,” the Achievers system encourages employees to bring company values to life. “Most companies have come up with three to five corporate values like excellence and integrity. Often these sit on the wall behind the receptionist’s desk and nobody could probably even list them to you, let alone identify them actually happening in the workplace. What we wanted to do is take these values off the wall and make them a part of the DNA of the company every day,” he said.

This system allows any employee to recognize and reward other employees for living one of the corporate values. Most customers provide each employee a small amount of money, typically between $10 and $25, to award to their fellow employees.

According to Suleman, the average utilization rate in an organization is 70% on a regular basis. This data can be tracked and reported on to see who are being recognized as a company’s top performers by accumulating the most points. This follows the lead of companies like Google that have moved from offering annual bonuses toward peer-to-peer style bonuses. Employees are further empowered by the fact that there are no approvals necessary to issue these bonuses.

When employees start work with a company that utilizes the platform, their accounts are loaded with a nominal amount of points for personal use to introduce them to the program. They are also provided a similar amount of points to award other employees. Achievers has found that receiving and giving points work equally well at increasing employee engagement.

This platform resides on the Web and is similar to other social media sites and can track and display users’ achievements similar to Facebook’s time line. This social aspect is the biggest difference between the platform and other enterprise software.

The biggest difference between Achievers and social media sites is that Achievers is behind a firewall that can be integrated with a company’s intranet and HR system with employee files. The platform can even be integrated so that users are automatically signed in when they log into the company network to start their day.

This integrated approach provides the capability for automatic rewards based on the company or a division reaching goals such as 90 days without incident and service awards for length of employment, while also allowing managers and supervisors to reward employees who went above and beyond in reaching a company goal.

“Instead of waiting for an annual performance review for recognition, Achievers encourages companies to catch people doing something right, allowing the supervisor to go onto their smartphone, tablet or PC and send a clear and quick recognition with a monetary reward to that employee,” Suleman said.

Specific goals can also be designed and tracked in the system through a tool called a “Results Driver” that shows users how close they are to achieving a goal along with a leader board for the company or division. “This allows for a healthy peer competition that makes everyone want to perform better because everyone wants to be on the top of the leaderboard,” he said.

The social networking aspect not only helps companies with safety campaigns and other initiatives, it can also help in recruiting campaigns through an employee referral program that can provide employees with significant points if a referral is successfully hired.

The fact that many oil and gas workers are not located directly in front of a computer each day is the biggest hurdle that Achievers has to face to ensure that consistent access is provided to each employee. “This isn’t just unique to the oil and gas industry—retailers and the hospitality industry have a similar challenge—but there’s such a wide range of positions that companies want to make sure everyone feels they have equal access to the program,” he said.

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