Oil and natural gas operators use a wealth of data to weather cyclical cycles, and they could do the same to manage their human resources, according to consultants with Deloitte Center for Energy Solutions.
“The old workforce planning strategy of ‘set it and forget it’ has outlived its use,” said the authors of a report issued earlier this month, “Oil and Gas Talent Management Powered by Analytics.”
Rapid changes in strategic business direction by many oil and gas industry players, in conjunction with sweeping changes and developments across the industry, are creating a need to define workforce requirements while adopting a progressive, forward-thinking workforce management approach.
The recent recession granted oil and gas human resource departments some respite from the headwinds, but those days appear numbered.
“We are on the cusp of unprecedented numbers of retiring workers and the ranks of suitable replacements are still thin,” the authors said.
Employees come and go, an unavoidable certainty. However, U.S. employers are bracing for what may be the largest wave of retirees ever over the next 10 years, which for the energy industry may lead to a “serious shortfall” of experienced technical professionals.
A survey funded by Schlumberger Ltd. in 2011 found the industry likely would lose a net 5,000 experienced geoscientists and petroleum engineers by 2014 as recruitment lags projected retirements, Deloitte said.
“The challenge is as much about the number of workers retiring as it is about those ready to replace them. The number of new graduates with petroleum engineering degrees has increased in recent years, but the fact remains that U.S. universities and colleges are still only producing about 1,000-1,200 skilled market entrants each year, woefully short of what will be needed to meet increased demand to support the industry’s growth.”
Also troubling: demand has been flat for masters degrees and doctorates (PhD) for petroleum engineering programs, “contributing to a dearth of educators.”
A recent analysis was conducted by Deloitte of petroleum engineering degrees awarded in 2012. Consultants examined a sample of eight of the largest U.S. programs, using a proxy for the number of “petrotechnicals” entering the industry.
“The analysis revealed that these critical programs produced only 736 bachelor’s students, 232 master’s students, and 56 PhD students, which is a small fraction of the total petrotechnical graduate hires needed each year for U.S.-based oil and gas firms.”
The analysis is backed up by the membership composition of the Society of Petroleum Engineers (SPE). Membership among 20-34 year-olds is higher than it was 15 years ago, “but there is a massive disparity between the 1997 and 2012 samples in the age group slated to become the next generation of leaders, specifically, those in the center of the age continuum.”
The lack of SPE members aged 35-50, said Deloitte, “should be a call to action for companies employing petroleum engineers, namely companies within the oil and gas industry.”
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