S10 ORME 6 2016 - Equipment Rental & IT_Layout 1 19/08/2016 09:00 Page 42
Recruitment & Retention
talent time bomb Andrew Ryan, VP Middle East and Central Asia at Airswift, stresses the need for all organisations to have the right resources in place to develop the next generation of skilled and gas professionals. HE OIL AND gas industry is facing what optimists call a demographic gap, and what pessimists describe as a talent time bomb. Even before the squeeze on resources caused by the drop in the price, an aging cohort of expertise was leaving the industry with little sign of replacement in sight. Of course, in the past couple of years, the exodus of talent has been accelerated by cost-cutting and efficiency drives in the face of low oil prices. Airswift estimates that since March 2015, more than 290,000 jobs have been lost worldwide, with many employees opting for early retirement packages where offered. Initial stopgap reductions are now extending deeper into organisations where some of the most skilled, and consequently most expensive, individuals have become expendable. At Airswift we have seen examples of Middle East operators and other participants across the value chain offloading talent with more than 10 years’ experience on specific projects.
Talent transfer and long-term effects Some individuals can transfer their skills to sectors that offer greater stability than the oil and gas industry. Project management and engineering talent is moving into other project-related sectors, for example mining, nuclear power, renewables, downstream and chemicals as well as infrastructure. It’s too soon to tell if the oil and gas industry has permanently lost this talent, but when the oil price recovers there may be a long-term, more pronounced talent shortage. And if companies are unable to fill essential positions, then the risk to their business is significant. Oil and gas projects are bigger, more complex and more resource-intensive than ever before. This requires a large, international and scalable employee base with the right skills and experience to support projects through to completion. If the right people aren’t available, these
Issue 6 2016
More than 290,000 jobs have been lost in the oil and gas industry globally since March 2015. (Photo: nirutft/Fotolia)
projects will be delayed, costing operators potentially millions of dollars.
Changing dynamics This tipping point could arrive sooner than expected. Saudi Arabia’s recently-appointed oil minister, Khalid Al-Falih, reasserted Saudi Arabia’s commitment to its oil economy in a recent interview and his firm expectations that the oil market will grow over the next two decades. Organisations may feel pressured to take proactive action to mitigate the risks of losing vital expertise. The priority has to be the retention of top performers. This is
The priority has to be the retention of top performers.”
crucial to ensure that each organisation has the right resources in place to train the next generation of talent and ensure knowledge transfer. For many firms, this is also a time to re-think flexible workforce management. The industry has long been dependent on flexible workforces to fill gaps quickly when they occur. But the inherent advantage of this now comes at a cost that is proving to be unsustainable. Initially, the instability and inherent risk of contingent and flexible contracts meant contractors could command higher remuneration packages. Although that risk element is much lower in an industry stretched for resources, the remuneration remains the same.
Thinking smarter Flexibility therefore needs to get smarter and operate on a global scale rather than on a series of local operations. Before