The oil and gas industry has faced adversity in developing and retaining a talented workforce in recent years. According to an article by Clifford Krauss from The New York Times, the oil and gas industry declined over 20% since 2016 (roughly 700,000 employees).
So, what’s going on?
Well, a myriad of things, most of which are outside our control. Recent geopolitical events, technological developments, and environmental concerns have not only directly affected extreme rises and falls in oil and gas prices but also modern hiring practices and the negative public image of our industry.
These different challenges have only caused talent attraction and retention to become more difficult. However, there are ways we can attract, develop, and retain a qualified and experienced workforce.
Some concerns in our industry that affect employee attraction and retention include the following:
Let's address them.
The oil and gas industry encompasses many blue- and white-collar jobs, and their talent is highly sought after and transferable to many other industries. Additionally, online job boards and social platforms like LinkedIn have made it significantly easier for workers to job hop and recruiters to poach talent.
Nearly 80% of workers in oil and gas-related positions have been approached by recruiters within the past year, according to the 2023 Global Energy Talent Index (GETI) Report. The same report states that 85% of the oil and gas workforce has considered transferring to another role outside the industry for career progression, job stability, and innovation.
According to the 2023 United States Energy and Employment Report released by the Department of Energy (DOE), the top three reasons recruiters had difficulties hiring in our field include the following:
The main concern for our industry is that we lack qualified individuals to perform needed tasks. This is because qualified individuals are being poached by other industries, including those related to energy (such as mining and extraction, renewable energy, and petrochemicals).
Offering more incentives for personnel to stay can help prevent them from leaving. The 2023 GETI report states that the top two influencers of job satisfaction were pay and benefits. Specifically, offering retention bonuses and perks to employees who reach certain milestones could positively influence loyalty and commitment to their company.
But what can you do if providing competitive wages and benefits is impossible because of economic restraints? Consider instead offering some lesser-costing incentives like more flexible work hours, extra vacation hours, or remote work opportunities.
Ever since the 2020 lockdown, maintaining a balance between work and personal life has been an increasingly important factor for employees in all industries. However, for oil and gas specifically, nearly 50% of oil and gas workers find their jobs exhausting, and 39% of them are frustrated with their work. Flexible working conditions can drastically reduce burnout, increase productivity, and create a healthier working environment.
As previously stated, insufficient qualifications and education were the top reasons for the difficulty in hiring employees in fields relating to training, distributing, and transporting fuels. While job hopping and poaching are partially to blame, another factor is the skill gap between laborers leaving the workforce and those entering it.
Fortunately, the natural gas sector has a pretty healthy age demographic compared to other energy sectors. Currently, the composition of the natural gas workforce is :
However, 56% of the overall workforce has less than ten years of experience. If including engineers and line workers, that number is 60%.
Between 2021 and 2022, there was a 24.1% increase in jobs in the natural gas industry. Yet, the overall count of fuel sector jobs, which includes petroleum, natural gas, and biofuels, stood at 1,031,799, which is 117,094 less than the 2019 total of 1,148,893, as reported by the Department of Energy (DOE).
Inflation, material costs, and other supply chain issues have diverted costs and resources previously used for training and recruiting workers. As a result, workers for qualified positions are in such high demand that it takes longer to fill job roles.
To address the lack of qualified workers in our industry, we need to put more effort into developing and improving training and mentorship programs. In particular, companies should develop processes for obtaining and documenting unwritten knowledge from workers projected to retire within the near future.
One way to implement this strategy is to train and incentivize those workers expected to retire to become teachers or mentors.
Training and knowledge transfer can be as formal or informal as you want to make it. These styles of training encourage cross-generational collaboration between all age groups.
Historically, higher educational interest in petroleum engineering and similar fields relating to oil and gas fluctuated accordingly with its price.
Because many oil and gas-related jobs are cyclical, workers entering or remaining in the field often experience these rises and falls. This means as oil prices increase, so do pay, benefits, and job opportunities. Likewise, as they fall, there are more layoffs because there’s less need for workers to drill, transport, or perform other activities.
“Climate quitting” refers to workers quitting their jobs because of perceived negative environmental impacts caused by their careers or industry. Though extreme, some workers already in our field are outright leaving to pursue other interests. More commonly, however, is the increasing shift from petroleum and fuels to renewable energies.
Besides environmental interests, many renewable energy companies can receive government incentives (like grants, rebates, and tax credits) with the goal of reaching net zero emissions by 2050. Additionally, many of these companies are relatively new but fast-growing start-ups with the opportunity to create new markets and economic growth.
This can be appealing to workers of all skill levels in oil and gas. Experienced workers have highly sought-after and transferrable skills, while less experienced workers are entering a relatively newer market with opportunities for quicker vertical job growth since the starting point is relatively even.
Although renewable energies do not threaten the oil and gas industry, there is growing competition. Clean energy jobs in all sectors grew 3.9% or 114,000 people compared to the fuels sector alone, which experienced a 13.6% or 123,377 growth.
According to former leadership member of Chevron Barbara Burger, oil and gas companies must communicate their energy transition strategies better. This can include implementing carbon capturing and storing strategies, developing more efficient processes that eliminate emissions, and branching out and investing in other energy sectors or technologies.
To that end, chances are your company is already taking preliminary actions to reduce greenhouse gas (GHG) emissions. To better hire or retain workers that may be climate conscientious, it may help to develop and communicate your company’s vision, mission, policies, or priorities that address sustainability and environmental concerns.
This can include highlighting any research or development, providing information on carbon-reducing procedures or technologies, or including performance metrics. Openly providing this information and periodically addressing updates on strategies used for progressing toward sustainability and reducing environmental concerns could help retain employees or attract new ones.
The challenge of attracting, developing, and retaining talent in the oil and gas industry remains a complex situation with no singular answer. However, addressing and acting against problems like better employment opportunities, aging or disinterested workers, and environmental concerns can help bring solutions or prevent future issues.
To help prevent workers from transitioning to other industries or fields, consider offering competitive wages, benefits, and other incentives. However, when economic constraints limit pay incentives, quarantine has shown the importance of non-pay incentives, such as allowing for more flexible work arrangements or improving work-life balance policies.
Additionally, our industry needs to focus on and develop training and mentorship programs that can effectively transfer knowledge from experienced workers expected to retire to younger generation employees.
As a whole, our industry needs to communicate energy transition strategies better to address environmental concerns. However, it is up to the company to develop and communicate its vision, mission, or other strategies that address sustainability and environmental concerns.
Doing so may help retain and attract employees.
Written by Richard Bogdan, EWN Technical Writer