Oil and gas employers reap their own over-paid, short-term, poacher-based, home-made recruitment crisis

Oil worker training skills general photo ScotentCompanies operating in the oil and gas industry are presently facing a ‘home-made’ recruitment crisis, as well as the jobs slump caused by the 50% fall in crude oil prices.

According to a new report from KPMG and Rigzone – based on a survey of more than 2,500 oil and gas professionals – the industry’s on-going ‘talent problem’ is primarily attributable to a failure to anticipate demographic-related issues.

As workers first hired in the 1970s and 1980s are now approaching retirement and an industry-wide slump in the 1980s and 1990s – combined with inadequate workforce planning – has now translated into a lack of qualified personnel ready to replace them.

The talent crisis survey revealed a ‘deeply concerning’ lack of internal candidates (only 21% of companies are able to draw from their own ranks) and defined strategies for talent management (only 23% have planned sufficiently).

Additionally, only 24% of respondents believe that their company’s leadership team is effectively engaging employees.

According to the report, energy companies must view recruitment in a new way by thinking long-term and developing a strategic approach:

  • Defining a strategic workforce planning model that truly understands the needs of the present and the needs of the future;
  • Making the most of analytics in order to gather objective data to guide decision making;
  • Managing third-parties more actively in order to optimise their strategic contributions to the company;
  • Safeguarding knowledge by implementing programs to ensure that experienced workers pass on their company and industry knowledge to the next generation; and
  • Re-thinking the employee value proposition to attract, develop and retain people in the earlier years of their careers and avoid ongoing talent issues.

Eddie Norrie, associate partner with KPMG in Scotland, said: “Companies need to take a strategic approach, even as they deal with the multiple challenges posed by the current low oil price.

“This will help to address internal issues and will bring considerable advantages when it comes to competing for new talent. If the industry does not change its approach the crisis will persist and when the price of oil increases it will only worsen.

“The industry has a history of overlooking issues related to its talent needs. Long-term strategic planning has not been the priority for many companies and most short-term strategies have fallen short in solving the problem.

“This unintentional neglect has led to significant shortages, inflated salaries, the overuse of third party contractors and widespread poaching.

“It has also left the oil and gas sector a step behind other industries when it comes to attracting talented people in the early stages of their careers.”

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