Editor's Notebook: Remember The Workforce

June 2012 Vol. 239 No. 6

An issue is beginning to crop up again that we haven’t heard much about recently. Somewhat hidden by the enduring economic slowdown and 8% unemployment rate, we may have been led to think that the workforce issue in the oil and gas industry was no longer a serious problem.

Well, guess again. What the slowdown has accomplished is merely what it says: slowing down the numbers of skilled men and women who have left the workforce while moving them several steps closer to retirement.

That’s going to be a key topic for the 25th World Gas Conference in Malaysia that we will have attended in early June. The International Gas Union (IGU), which stages the tri-annual event, reports the average gas industry age profile of 45 years and above is a cause of increasing concern, particularly in Europe and North America. Many of the existing skilled workers will soon face retirement and the industry must address the challenge of competing for a limited pool of experienced professionals.

The industry lacks both young talent in the distribution segment as well as experienced mid-career talent throughout the entire value chain. Hundreds of thousands of technical professionals are needed to meet the increasing global gas demand. As expected, the most required technical skills are in engineering, construction, projects and operations.
“Human capital is the power that drives this industry forward. Tackling the talent crunch, addressing human capital issues and shaping the future direction of the global gas industry are among our strategic approaches to ensure the industry’s sustainability,” says Datuk Dr Abdul Rahim Hashim, IGU president.

In response, the IGU created a task force under the guise of "Building Strategic Human Capital" to deliver a comprehensive analysis of the key human talent issues affecting the gas industry and address its future. It will report on what the industry can do to attract and retain talent and the roles of government and educational institutions.
A survey of 80 companies has looked specifically at demographics of the gas industry, gender diversity, retirement, supply and demand of key staff, recruitment challenges, competency development, career management practices, regional issues and talent attraction.

The shortage also drew concern at the Offshore Technology Conference in Houston. A poll by GL Noble Denton found that 72% of industry professionals felt not enough is being done to avert an impending shortage of technical talent.

“The increasing shortage of technical skills in the industry is a topic close to the hearts of oil and gas professionals. The overall feeling is that the sector will encounter challenges as a result of its failure to attract, recruit and retain highly talented people,” said John Wishart, president of GL Noble Denton. “It is clear that we need to work together more cohesively to help educate emerging young talent on the benefits of joining the oil and gas industry.”

Maybe it would help to quote a recent survey from Rigzone, an online source of oil and gas information which found that the average earnings of North American-based oil and gas professionals rose 3% in 2011 to $99,175. Energy professionals directly connected with drilling saw a strong increase, and earnings for entry-level professionals grew 9% year/year. Those working on a rotational schedule earned more than $112,000 in 2011, a 6% increase from 2010.