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THE CONFIDENCE CYCLE BY Milan Brlík, SEniOr COnSUlTanT, lEVEraGE ParTnErSHiP

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t is no secret that oil prices set trends in the Oil and Gas industry. Balance sheets, departmental budgets and even whole companies give in to the pressure of falling oil prices. However, it is not just about the numbers that we see in the headlines of newspaper articles. We often forget that budget cuts have an effect on the people who work in the industry. The Exploration & Production Sector (the target market of our recruitment firm) has always swung violently with each move of the oil price index. When the price is high, people are happy, confident, and full of expectations. When the oil price plummets, the mood does too; everyone, from the CEOs at the top to the junior engineers at the bottom, become anxious about their future careers. Cynicism and doomsday talk become the new social norm. Working as a recruiter focusing on such a volatile market, you always feel these changes first-hand. It is amazing how the general mood of the market pours from Malaysia, the Middle East, South America or the North Sea into our small office in London Victoria. Since part of our job is to function as confidants to clients and candidates, we are highly prone to absorb the mood of their world. People share with us. They tell us confidentially about their departmental plans and proposed budget cuts. They brag about their great jobs during the good times and they moan about how painful and boring their jobs are during the bad times. As a

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by-product, their mood gets transferred into recruiters’ soul (that is, provided recruiters have one). Recently, as a result of OPEC’s decision to curb its competitors by lowering the oil price, the atmosphere in our office has hit rock bottom. The usual bragging and self-confidence of Oil and Gas high-flyers has gone. The Italians are less loud, the Middle Eastern engineers do not haggle their salaries so much, and the cautious Germans are even more careful. Everyone seems to have been caught in the latest wave of confidence slump – and I do not just mean the economic one. The condition of any market is always about the confidence of the people who work within it, and the general industry confidence-level can spread quite quickly. The issue is that, as with any mental setting, the overall mood can create a self-fulfilling prophecy. Therefore, during these bad times, I wonder how much the performance of the market is because of hard numbers and how much is as a result of fragile, easily-disturbed, emotions. Looking around the office these days, I suppose that for the confidence level to change we need a strong impulse – perhaps the next breakthrough in technology or geo-political negotiations. Then, based on one OPEC meeting, or a strongly positive article in the Financial Times, the whole confidence spiral will start spinning the other way and the good mood will spread through the Oil and Gas world – until the arrival of further bad news.

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