I read a couple of articles in recent weeks (including the one that had this great image) that reminded me of the continuing challenge of matching workers with jobs in our recovering economy due to the “Skills Gap”, whether real or perceived. In fact, since this is a theme that pops up on a regular basis (usually after government employment statistics come out) I already had this blog post started but needed to finish it…
Where Did The Skills Gap Come From?
The Skills Gap, or mismatch between the skills held by the available workforce and those in demand by employers, has been a common theme during this economic rebound. As low-tech manufacturing jobs are replaced with high-tech ones – whether in manufacturing, IT, or services – a structural mismatch is created between the unemployed workforce and the available opportunities.
Exacerbating the situation is the fact that operators are generally looking to fill these available positions with plug-and-play workers who already possess the required skills, certifications and expertise – not hire someone with a different set of competencies and move them up the skills curve.
The articles below are from a couple months ago and were the initial impetus for a discussion among our team on this skills gap, specifically as it pertains to the oil & gas industry and high-growth areas such as the Marcellus and Utica shale regions.
WSJ: A Jobless Dilema: What’s Wrong With Fort Wayne?
NBC: Employers may be aggravating the ‘skills gap’
The Jobs Are Out There
According to Dept. of Labor statistics released on January 10, there were 3.7 million job openings in November 2012 (unchanged from October). As an organization that specializes in oil and gas training and knowledge transfer, we at EKTi tend to lean toward the view that a competency-based human resource structure and proper training initiatives can bring the right employee or candidate up to speed with necessary knowledge and skills requirements.
We are mindful, however, of the cost of training and how that investment sometimes walks right out the door once the new skills are obtained.
Companies Begin to Reevaluate Their Role
These two more recent articles alluded to the fact that companies are recognizing the importance of coordinating with local vocational schools and universities as well as developing internal training programs.
One article, while not petroleum industry related per se, shows a bank taking the creative (and apparently effective) role of career counselor and trainer to customers who lost jobs and are at risk of foreclosing on their mortgages.
Impatient Employers Step in to Educate Prospective Workers
FifthThird Expands Job Re-Training Program for Borrowers
60 Minutes had a piece on the Skills Gap last November which highlighted a similar scenario where a small manufacturer was forced to be more proactive in creating and developing its local workforce through partnerships with other local businesses and vocational oil and gas training programs.
Skills Gap, Training in Oil and Gas
An ironic twist in the conversation for the oil and gas industry in particular is the fact that our industry has not done a great job attracting talent.
The well documented aging of talent in our industry was brought up by SPE President (2012), Ganesh Thakur in a Linkedin discussion that brought some well thought out responses. We also discussed the topic here:
How Do We Attract the Young Talent and Accelerate Their Development?
Pressure from the Rapid Growth of Unconventionals
Community leaders in the Marcellus shale region have recognized that in order for the localities to fully reap the rewards of job opportunities in oil & gas over the long term they must be able to supply a steady stream of skilled labor.
Focused training programs, developed in conjunction with energy companies, at community colleges and vocational schools have seen record demand. But it took partnership with those companies to develop programs that met their particular training needs. Over the long term, these types of programs will help to ensure that local jobs are filled by local workers.
Related Article: Upstream vs. Downstream
Read more about the difference between Upstream and Downstream segments of the oil and gas industry.
Areas such as the Eagle Ford in Texas have less acute issues do to the legacy of oil and gas operation in the region. However, rapid development in the Utica shale and newly discovered shale deposits in places like Utah have led to skills gap and worker supply issues. Factor in the pressure that rapid development of unconventional resources globally will bring to the equation, and companies will have to become even further invested in developing their future human assets.
With the rate of technological advancement, we have entered a world where it will always be difficult for workers to keep up with the demands of their industries. Companies need to recognize their role in helping create a stable supply of workers that possess the skills they need.
About EKT Interactive
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The issues that need to be cosidered are:
First, ensuring that training meets both regulatory compliance and industry standards.
Secondly, proprietary technologies and individual operational methods of the company.
Thirdly, expense.
Internal training departments and the use of training organizations should partner to meet the needs of the industry.
My experience in training over a thousand workers in the Bakken is that the workers are a very mobile and competitive, moving from one company to another looking for the better conditions and pay, They repeated the same training over and over again. In spite of attempts at industry training standardization, like API , Rigpass and SafelandUSA there is still an inconsistency and lack of reciprocity in basic safety training, let alone operational training.
Community based training as mentioned consolidates the source of training to the public sector. This is in direct competition with sources such as BMI Safety Training ( http://www.bmisafetytraining.com ).
It would be devastating to nationalize the Oil and Gas industry and the same is true for ancillary industries. Just as individual Oil and Gas Service companies would be non competitive with nationalized ( Public Sector) companies, training organizations are finding it extremity difficult to compete with public sector or community colleges and universities. The standards for safety training for instance, are set by both industry associations as in API and NFPA and regulation as in OSHA. This model allows private industry to meet the market demands, creating jobs and furthering the economic recovery. Competition is good for business and companies that can provide a quality service that is cost saving should do well in a free market.
Ron,
Thanks for your response to our article. Your points are very well taken. As a training organization ourselves, we are familiar with the less-than-level playing field that can be presented when public organizations take initiatives to train that are funded with grants and public money.
We have found that the best path can be to support such initiatives since the organizations may have dollars (usually) and subject matter expertise (sometimes), but need curriculum development, design and delivery experience.
EKT Interactive was able to partner with the PA Fire Commissioner to develop a series of well site first responder training courses. These courses have been rolled out across the state and taken by over 4,000 first responders.
You can see some video clips here:
First Responder Wellsite Hazard Awareness
PA Fire Commissioner Greets First Responders
Best of Luck.