Executive viewpoint

What a difference 12 months can make in the oil and gas industry. This time last year, with oil prices comfortably over $100/bbl, there was a high degree of confidence that we were in line for a period of sustained stability and security.

One of our biggest challenges was where to find additional personnel to carry out the increasing amount of work, including a source of new recruits to keep this growing sector at the forefront of industrial and technological development. The six-month dramatic decline in oil price saw it tumble to a six-year low, below $50/bbl. Some forecasters predict that we may see the price hover around $60 for the rest of 2015, while others suggest it could take us as long as three years to return to previous levels.

Unfortunately this has led to contractor and staffing reductions at a number of companies. However, we all know that the oil and gas business is cyclical—the industry will recover. This leaves us with a different challenge. During a downturn, how do we maintain the highly skilled, innovative people our industry needs, while attracting new/additional talent after the recovery period?

The current climate has forced us to become even more pioneering, collaborating to find the very best technological and cost-effective solutions. We need experienced, innovative people to deliver this, which is why it is important to maintain (and nurture) this talent. The oil and gas global workforce survey (Q1), published by OilCareers.com and Air Energi, highlighted that 80% of respondents felt that the skills shortage is real. Furthermore, 44% agreed that this represented the “biggest threat” to the industry.

At the heart of employee retention is a strong approach to engagement, ensuring open communication throughout a downturn. Although no employer can promise employees immunity from external factors, open engagement facilitates understanding and a greater degree of support, when hard decisions have to be made. This means pulling together as a company, rising to the challenges that are faced across the business.

Companies also must think more creatively about employee development during this time. While training budgets may need to be reduced, the UK Institute of Directors (IoD) study, “Training in the recession: Winner or loser?” highlighted a reluctance to cut in this area. Of 937 directors who participated in the survey, many felt that the downturn presented their organizations with an opportunity to invest now, to grow quicker following an upturn. Thus, 80% of organizations had subsequently maintained or increased their training investment, while only 20% reduced theirs in the same period.

However, we must apply this within the context of the industry and the scale of this downturn. The IoD study found that a recession also forced organizations to reassess the types of training offered. Indeed, 46% of directors confirmed that their organization was prioritizing “essential” training, to meet immediate business needs, over long-term “investment” training.

We shouldn’t underestimate the job satisfaction that employees derive from being involved in challenging projects, technical paper schemes and mentoring programs. Investment in training can improve staff morale 76%, improving productivity and/or profitability 74%. Like our technical challenges, it’s important that we pioneer employee development programs to retain and motivate our best people.

This is being emphasized through our theme at SPE Offshore Europe 2015: “How to Inspire the Next Generation.” Irrespective of the current challenges, this global conference recognizes the long-term need for a secure talent pipeline, opening its doors to a younger audience throughout the entire week.

We cannot limit our focus purely to the next generation. This needs to be supported by a broader skills base—improving our demographics and widening the talent pool. The global workforce survey, “Women in Oil and Gas: The Diversity Challenge,” also published by OilCareers.com and Air Energi, revealed that overall efforts to encourage more women into the industry are not working. Results also highlight widespread confusion among the workforce as to whether or not internal initiatives were effective.

The survey found that among respondents, 47% of employees and 40% of hiring managers reported the gender gap as an issue. Nevertheless, responses showed that there was a real appetite to change this, with 63% of employees and 71% of hiring managers agreeing that addressing the situation would give the industry access to a wider talent pool.

Actions that the workforce thought should be taken to address the issue also were considered. In the Americas, 41% reported that the industry should encourage more young women to study science, technology, engineering and mathematics (STEM) subjects, while 34% stated that an emphasis on progression and leadership opportunities would encourage more women into the industry.

If companies do not continue to invest in attracting new talent, including a broader demographic and wider employee base, we risk making the same mistakes from the past. Similar to our approach to training, careful consideration must be given to managing our short-term demand, while keeping our eye on future skills requirements.

If we don’t take these actions now, the industry will recover and, once again, we will be left facing a significant skills gap, exacerbated by a disengaged or lost generation within the workforce. We must take the right steps to avoid discouraging talented individuals from considering a career in the energy sector, now and in the future.