In its third annual report, the Global Energy Talent Index looks at the oil and gas recruitment trends in 2019. In a detailed analysis, the report throws light upon the effects of skill gap in the talent pool within the energy landscape.
According to the report, the current year is no exception. In 2018, the oil and gas recruitment trends reflected a few patterns. The respondents to the survey by GETI expressed great concerns over the shortage of skills in the years ahead. The following factors contributed to these concerns:
- A large number of approaching retirements
- Lack of young workforce entering the field
- Inception of automation and the need for more digital skills for the ongoing digital revolution across the industry
- A persistent shortage of women in the industry
Oil and Gas Recruitment at Crossroads
Times have changed. Wages alone cannot retain talent anymore. It is important to identify the points and areas of vulnerability in the industry that can help it close the skills gap. From accommodating automation and training the employees for the digital oil and gas to a major shift in workplace culture, the oil and gas recruitment trends are experiencing a paradigm shift.
What do the new age oil and gas professionals care about?
The oil and gas recruitment trends analysed by the GETI report has recognized one universal truth: money matters less. In the present times, the oil and gas professionals care about:
- Career Progression: The modern oil and gas professionals are passionate about learning new skills and are poised to take up bigger roles. More importantly, they wish to climb up the career ladder and are eager to know that they would not have to spend years waiting for promotions.
- Flexibility in Career: The modern professionals are more dynamic and high spirited than the older generations with respect to the desire to work abroad, to develop fluid skill sets and, if need be, to move to new sectors.
- Resourceful Work Culture – From the opportunity to work with paradigm-shifting solutions to flexible working, technology is at the core of what professionals seek. A renewed sense of confidence arrives among individuals when working culture lays emphasis on technology. This helps the professionals understand that the industry is evolving and not stagnant.
Shifting Oil and Gas Recruitment Strategies
The modern oil and gas recruitment strategies will have to address the emerging concerns but this will be a gradual process. However, the oil and gas companies can quickly implement certain actions to help address the pressing skill requirements.
Digitization can play a key role here. New skills and ways of skill development await the digital oil and gas landscape. As digitization rears its head forward, automation takes on the limelight and will address many of these urgent issues directly. With the promises to relieve the oil and gas professionals of tedious tasks, automation will empower them to transition their skills to other important industry aspects.
How this shift in oil and gas recruitment strategies will shape the workforce of oil and gas will be an interesting development to observe. An analysis of the oil and gas recruitment trends in the present times will give us some perspective.
Oil and Gas Recruitment Trends to watch in 2019
“Many corporations are reviewing salaries, because they want to prevent other companies from luring employees away. Executives have told us that they are genuinely afraid of having talent poached.”
Increasing oil prices tend to bring about an increase in salaries. A higher oil price environment has translated into strong pay hikes. This has further led to a sense of optimism for future wage hikes.
According to the GTEI Report, 65% of workers believe their pay will increase in the next year and 39% think that it will increase by over five per cent.
Expectations for higher remuneration packages are also being driven by competition amongst oil and gas companies for talent. Amidst a scarce pool of talent, companies try to use generous compensation offers to attract individuals away from their competitors or retain talent.
Global Mobility for Growth
Are higher remuneration packages on the table the best strategy to retain talent?
The respondents to the GTEI Survey say that career progression is the prime moving force, not money. Oil and gas professionals are ready to relocate for better career prospects.
“During the downturn, professionals moved abroad because local employment was scarce. Now, local jobs are abundant, but a lot of the workforce still wants to move. This tells us that global mobility is now driven by the desire to work on more career-advancing projects.”
A major highlight of oil and gas recruitment trends in 2019 is the search of opportunities for career growth on a high priority than any other contributing factor. 9 in 10 oil and gas professionals said they would consider moving to another region and 37% said that they would relocate for greater professional growth.
Looming Crisis in the Permian?
“The Permian is in a unique situation, but it’s one that we can see playing out across the world as growth continues. In countries where obtaining visas is arduous, companies are really going to be challenged.”
For the manpower crisis that is being observed across the industry, the circumstances in the US Permian Basin arrive as a warning sign. Massive talent shortage has occurred in the Permian owing to rapid growth and increased competition. Even higher wages are failing to attract the best professionals and oil and gas companies are fighting a hard battle to fulfill their workforce requirements. This situation has twisted the oil and gas recruitment strategies to a great extent.
The oil and gas millennials are more worried about the shrinking talent pool than their older generation of professionals. Opportunities for career advancement expand with retirements on one hand and on the other, the lack of new and fresh talent to fill the gaps might result in higher workload for the existing workforce. Consequently, the work life balance can experience a downfall.
Shrinking Blue Collar Talent Pool
“In the US, blue-collar skills are more in demand than engineering roles. Again, it’s a regional trend that should serve as a warning for the rest of the world.”
Over half of the GTEI survey respondents said that engineering is the most likely business function to be affected by an impending manpower crisis. However, the talent shortages are yet to fully manifest themselves for the development of viable and concrete oil and gas recruitment strategies.
The blue collar talent pool is rapidly shrinking. Further, these skills are in great demand, especially in the Permian region.
Money no longer talks to attract talent
An interesting phenomenon in oil and gas recruitment trend is being observed across the industry – the appeal of high salaries has lost its power. Back in time, there was a direct correlation between the economic cycle and the flow of talent. As the oil prices would rise, the companies would upscale their remuneration package to attract young talent or bring back veterans.
Tables have turned now.
Only 30% of respondents to the GTEI survey under the age of 25 believe that higher pay is a way to attract talent.
The report further highlights that the oil and gas companies need to keep up with the changing times. Competition is very high and majority of the technology companies are going after engineering students who would have otherwise entered the oil and gas industry. Amidst this backdrop and despite whatever happens economically, the companies need to invest more in oil and gas recruitment and talent strategies.
Is the Oil & Gas sector making the right moves?
“Leaders and oil and gas recruitment managers realise that the world has changed and the desires of young professionals are very different. Providing individuals with opportunities to grow their career, travel and work with new technologies will be crucial.”
The challenge ahead for the oil and gas companies is maintaining a pipeline of fresh and skilled professionals. But the oil and gas industry is making some right moves – embracing the digital revolution, revival of outreach programmes, creating a welcoming work culture for women, and so on.
The focus on training programmes is also increasing. These programmes are crucial as they prepare the employees for more challenging and dynamic roles and further preserve the priceless skills that the senior oil and gas professionals own. The desire for career advancement greatly reinforces the relevance of training programmes.
However, there are some issues that deserve attention. Closing the gender gap remains a major concern for the industry. Amidst all the talks on attracting more female talent, only 17% of the GETI survey respondents suggested attracting more women employees to the industry. The oil and gas recruitment strategies in the present times must incorporate this concern and view it as a collective problem.
Oil and gas companies need to keep up with the pace of digital revolution within the industry and automation. The consequences can be painful for companies if they do not move fast enough to adapt to new technologies and expand their talent pool.
Industry experts have also pointed out that one of the leading causes of the skills shortage is the impact of economic cycles on job stability. Today’s talent crunch can be explained by job losses during the recession. But this is just a part of the story. The bigger picture is yet to unfold and oil and gas recruitment trends will continue to evolve.
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