Replenishing our Petroleum Workforce

Author Deirdre O’Donnell, Managing Director, Working Smart

With the impending departure of “Baby Boomers" from the upstream oil and gas industry, there is a recognised need to replenish this workforce in order to sustain a viable exploration and production business.

Deidre O’Donnell is Managing Director of Working Smart, a specialist recruitment company supplying personnel solely to oil, gas and related service companies. It also operates Graduate Smart, the world’s first dedicated graduate e-recruitment solution for connecting young geoscientists and engineers with the upstream oil and gas industry.

Career development and succession planning and retention strategies have become of key importance to most companies in filling this experience gap.  With companies developing and promoting from within, there is a void of more junior staff in many organizations. Attracting and hiring new geoscience and engineering graduates is imperative to ensure a viable workforce for the future.

However, the plight of the graduate has become even more apparent since the 2008 global economic crisis, as many graduate career programs have been suspended totally or reduced dramatically in the last few years and there does not appear to be any great movement to change this scenario.  We now observe students still without job offers, having graduated from universities that typically had all their graduates in secured employment months before completion of degrees.

At Working Smart, a specialist recruitment company in upstream oil and gas, we have seen a major increase in the number of applicants for graduate jobs. Most of these roles attract in excess of 200 applicants, with a high percentage of MSc and some PhDs applying.

As recruiters, we are seeing the mid-tier experienced group (i.e. 10-15 years) commanding and securing salaries that are not dissimilar to salaries of the 20+ veterans. The reasons are many, but mainly companies prefer this age demographic to develop and succeed those departing the upper echelons.  In addition, the salaries of the 5-10 year experienced group has increased due to shortage of supply, which is a result of the 1998 oil and gas economic downturn where we saw little to no graduate recruitment for many years – hence we now have a skills gap in this sector.

Graduate lunch at Petex 2008 Photo: Guy Elliott/PESGB

Challenges to overcome

So at the upper level we have impending retirements (some say in excess of 45%) in the next 5 years, and in the mid and lower demographics we have skill shortages. The obvious solution is to replenish with graduates.  But this in itself presents us with challenges to overcome:

  • The UK and many other countries have seen a decline in the number of science graduates in recent years. In addition, research has indicated that more than 50% of UK geoscience graduates choose other industries, such as environmental, geotechnical, remote sensing and GIS. Reasons given include the historic volatility of our industry, “green” factors and the higher degree level demanded by many E&P related companies, achievement of which requires additional expense to students who are often already in significant debt.

  • Many parts of the world have no shortage of geoscience graduates, but recruiting these graduates can pose challenges, including non-standard qualifications across countries and with austerity measures being enforced, countries are seriously tightening their work permit restrictions.

  • A lot of companies are reluctant to hire graduates due to work pressures. Typical reasons given include: “we need experienced professionals to meet our immediate service requirements”; “we do not have a structured training program in-place” and “we do not have the capacity to provide support and mentoring to graduates”.

Many companies still prefer to hire a 1-2 year experienced candidate rather than take on and train a new graduate; however the industry as a whole cannot sustain this approach. Companies with a more strategic approach to the long-term problem, and a commitment to hiring and training graduates, are using a variety of recruitment approaches. These include providing financial assistance to universities, sponsoring degrees, providing lectures and materials, encouraging joint research projects and participating at career fairs and academic milk rounds. Working Smart in association with the PESGB are hosting the first graduate career centre at the PETEX conference in London in November.
 
There are an increasing number of initiatives to improve collaboration between academia and industry, stimulate student interest in geoscience and develop teaching curricula to better meet industry needs. However, the bottom line is that if we do not rebuild our workforce with graduates, we will create greater competitiveness within the existing market, roaring permanent salaries, higher consultancy day rates, and in general a major lack of resources.
 
In conclusion, I believe that we as an industry recognise the challenges ahead. However, I also believe that the time has now come to abandon complacency and take action and to start replenishing our workforces with our graduates – we have plenty on the market, qualified, keen and eager to become our next generation of geoscientists and engineers.