The Great Crew Change
The aging of the workforce in the oil and gas industry is a very common theme at industry events and in the press. However, those new to the industry or pursuing opportunities in oil and gas might not know what all the fuss is about. Here is some background on what led to the current human resources situation and why there are amazing career opportunities in our industry right now.
Decades of Hiring Stagnation
As in all commodity-driven businesses, the price of crude oil is the key driver of investment and hiring decisions in the oil and gas industry. The oil industry experienced a hiring surge in the late 1970s and early 1980s, followed by an extended period of decline.
For reference here is a long-term chart of historical crude oil prices going back to 1986. Once oil prices had stabilized after the embargoes of the 1970’s, stagnant and persistently low prices prevailed for over two decades with prices bottoming out near $11/barrel in 1998. Low prices meant that economics did not support exploration and production activities, or investment in human resources.
While clearly oil and gas has been a hot sector for job growth in our nation, this new talent has not made up for decades of depressed hiring activity. As a result, over half of today’s U.S. workforce is eligible for retirement within the next 10 years, and this is often referred to as “The Great Crew Change.”
A 2008 survey by Ernst and Young and Rice University confirmed the extent of the struggle that oil and gas companies have in recruiting, training, and developing a sufficient number of staff:
- Nearly 90% of the senior executives interviewed at 22 top international oil and gas companies called the talent shortage one of the top five issues facing their companies.
- More than half the executives surveyed feel the talent void could hurt corporate growth as a result of an inability to staff projects.
Nearly three quarters agreed that the need for training has increased due to changing workforce demographics. And that was before the domestic boom in oil and gas production due to horizontal drilling and hydraulic fracturing.
More recently, a study performed by Schlumberger Business Consulting (2011) highlighted a loss of 5,000 experienced petrotechnical professionals by 2014. Universities have succeeded in ramping up graduates in petroleum engineering and geosciences. However, over 70% of these graduates come from Asia and Russia CIS which will require a global mindset in recruitment of talent.
As Chad Hawkinson, VP of Product Design at IHS told NPR:
This couldn’t happen at a worse time.
Related Article: Upstream vs. Downstream
Read more about the difference between Upstream and Downstream segments of the oil and gas industry.
Employment Trends and Opportunities in Oil and Gas
The boom in oil and gas domestically has created opportunities beyond engineers and geologists. Supervisors and staff in areas including Accounting, Marketing, Computer Support and IT, Office and Administration, Executive Assistance are all seeing tremendous growth. Geographically, the job boom spreads beyond traditional oil patch centers.
Industry and education groups are racing to keep up with the future demands for skilled labor and support staff in oil and gas. Every week there are announcements of oil and gas industry groups collaborating with vocational schools, community colleges, and universities to get more people trained to fill available positions. This is a long-term trend which won’t be slowing down any time soon.
Regardless of your skill level or education background, gaining a more well rounded understanding of this dynamic, global industry is imperative to Get Hired or Get Ahead in oil and gas.