Expect free agency of Gen Xers to replace the traditional employment model.

The pace and application of technological advancement is changing the job descriptions of upstream petroleum workers. Traditionally, to work in the oilfield you needed to be strong, tough and willing to work anywhere.

Effective employees now need to know how to interact with the continuous evolution of hi-tech tools, vastly more precise equipment and integrated digital systems that are the core of the modern oilfield. In combination with an aging and exiting workforce, this pressure to interact is creating a clear need for the industry to change its strategies toward recruiting, training and development practices as dramatically as it did for safe performance when it rendered the missing finger icon for oilfield workers a thing of the past. It's time the industry goes to school for its future.

Adding to the challenge of skilled worker recruitment - as our economy accelerates from production of goods and services to a knowledge economy - prospective employees capable of handling the industry's new technologies are the same people who are being targeted by other industries to work in their own technological environments.

With the workplace exodus of the Baby Boomers well under way, the battle for new talent is predominantly a battle for Generation X. These young men and women live in a world where, according to the US Department of Labor Statistics, the average employment tenure is down to 3.6 years from the 22.5 years that it was for their parents in 1960. Instead of climbing a career ladder they pursue a career matrix where jobs and work environments are constantly examined and compared. They look for the value of training and skills development that will be useful in their next move and, to the concern of their seniors, on the level of fun and adventure they offer.

What's The Problem?

Learning to do more work with less people is not unique in our industry. It is a trend that is taking place within companies that expect to deliver and sustain shareholder wealth without regard to where and how they compete. To some degree, that trend is rooted in the supply and demand economics of asset utilization and a shrinking workforce. Fewer people costing more money raise the break-even point for new technologies that reduce the number of people needed.

According to a June 2001 article in Staffing Industry Review, the "supply of workers ranging in age from 25 to 44 is expected to drop 15% over the next 15 years." This is a critical problem looming in the near term, because the upstream petroleum industry is just beginning to address future performance needs. Companies will be spending more time and more money competing for new workers if they want to succeed in meeting shareholders' expectations.

That competition is not going to be easy for our industry. Supply and demand have shifted. The processes of finding the right people and teaching them how to meet an employer's workplace needs now demands real attention.

Workers considering opportunities in the petroleum industry today will find little encouragement that the training and development that they are looking for to help them traverse the matrix will be available. Before the Internet bubble began to expand, the Aug. 28, 1995, issue of Staffing Industry Report published a study from consultants Towers and Perrin that - using proprietary compensation and benefits data - revealed of four major industries the petroleum industry had the lowest investment in employees at US $80 for every $1.00 in capital. This was compared to $1.60 for telecommunications, $3.60 for the chemicals industry and $6.40 for general manufacturing.

Companies within other industries typically form and rely on industry associations that work with public and private entities to develop and deliver training to their current workers and promote their industry to future workers. With few exceptions, integrated energy companies have developed their own training programs, built their own training centers and used them exclusively for their own people - not working together as an industry, but each company individually and, in most cases, simultaneously. That's the old school way.

For several years now, in response to the challenge of creating shareholder return on investment, major companies have been easing out of research, development and training. In their wake, service companies and institutions have been working hard to fill the voids and have been having some success. But without an industry-wide infrastructure to connect them, they have essentially succeeded only in driving a shift from exclusive, internal training systems to systems that are still difficult to access, fragmented in scope and content and geographically limited. That inconsistent approach seriously limits the abilities of both the soon-to-exit Baby Boomers who are hitting the high side of fifty and the ascending Gen Xer's to keep up with the rapidly changing technologies that have become the core of the industry's tools and skill sets.

Replacing the Boomers

In his recent book "Good to Great," author Jim Collins uses empirical data to document how effective leadership creates sustainable results inside corporate America. In Chapter Three, he clearly states that it matters that success strategies begin with "Who first" before any "What then" decisions are made. In summary, he advocates "Get the right people on the bus, get the right people in the right seats on the bus, get the wrong people off the bus and then decide where to drive the bus."

There is at least one valuable way to develop the right new people: commit to and support an infrastructure to establish a close collaboration between industry and education to develop curriculums and form working relationships with the large and growing network of community and technical colleges that already exist in the neighborhoods of the workers that need the training.

That solution has apparently taken root. In 1997, at Texas City, Texas, The College of the Mainland used monies from a Carl Perkins (the legislator, not the musician) grant to form the Gulf Coast Process Technology Alliance (GCPTA). In 1999 GCPTA partnered with the Center for the Advancement of Process Technology (CAPT) to win grants from both the National Science Foundation and the Department of Education and expand the development of curriculums for Process Technology. Those successes continued in 2002 when the National Science Foundation funded CAPT as an Advanced Technological Education Center of Excellence for Process Technology. This rise to a national center has provided clout in attracting national alliance partners which, in addition to the GCPTA, now include partners in Oklahoma, New Jersey, Alaska, California and North Dakota.

With the introduction of a pilot curriculum for the first of two new oil and gas production courses taking place in Spring 2003 and the expected wide distribution of those courses set to begin this fall, there is some hope that instead of a scattered patchwork of narrowly focused training programs, workers will one day have access to actual career paths for the upstream petroleum industry where they will find basic, transferable and marketable training and skills development that coordinates with future opportunities for advanced degree study. It's an inspiring thought and, according to CAPT, partner colleges are already graduating people who are finding jobs in downstream and related industries, the competition for the upstream petroleum industry.

Take action now

To make this a sustainable resource, the petroleum industry needs to promote its accomplishments, compete for and hire these graduates.

In his article "They're Not Employees, They're People," published in the February, 2003, issue of "Harvard Business Review," Peter F. Drucker writes, "developing talent is business' most important task - the sine qua non of competition in a knowledge economy."

The large sums of money spent on those "Old School" individuals and simultaneous training programs demonstrate that companies in our industry must have recognized that conclusion at some level. Technology is working - in the office, on the rig and at the wellhead. The question is whether those companies choose willingly to creatively abandon a generational history of independent action and learn to focus as an industry to develop the technology workers that each company needs - or wait until a crisis forces that change at a much higher price. Evaluate the choices and then decide. Decisive action is almost always the path to success.

Mitchell S. Fralick can be reached via e-mail at mfralick@pachouston.com.



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