The international energy industry has registered a steady decline in the numbers of new recruits entering the sector, with science, engineering and technical (SET) skills particularly affected. Many parts of the industry have been undergoing slower growth rates than in the 1970s but, until recently, the situation had been manageable.

Over the last decade, the risk of serious shortages in SET skills has emerged, exacerbated by increasing global demand, a large section of the industry’s workforce rapidly approaching retirement, and large-scale downsizing leading to lack of recruitment into the energy sector during the 1980s. Such shortages would be felt at all professional levels, from technical specialists to senior managers.

Skills research

Since 2005, the Energy Institute (EI) has been working with Deloitte and Norman Broadbent to review the skills issues facing the industry. At the end of 2007, the first stage of this research was concluded.

Its purpose was to establish the scale and the level of awareness of this potential problem among energy companies. The findings showed:

Over 70% of energy companies surveyed said they would not have enough leaders to meet the industry’s future challenges.

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Internal development programmes are delivering insufficient numbers of trained personnel to develop into senior roles.

The average age of the workforce in the sample was 45 years.

50% of respondents expected to leave the industry in the next decade, mostly through retirement.

The main shortage area was for technical specialists, in particular, engineers. The level of specialisation required in many cases led to recruitment being mostly from within the industry.

A perceived lack of interest in the industry, rather than lack of skills, was seen as a big barrier in recruiting outside the industry.

The shortage of key talent within the energy industry, particularly within oil and gas, has reached a critical level of awareness. For example, in the US almost half of the boards of companies surveyed by Deloitte in 2005 have discussed the issue.

“Key issues around future skills provision need to be addressed.”

Some key issues around future skills provision need to be addressed, not only at the level of leadership skills, which will fall as the age profile of the workforce rises, but also around the immediate need for technical skills at all levels and in all sectors of the energy industry, which will eventually feed through into the leaders of the future.

Sustainable future

This research led to a series of recommendations to support a recruitment and retention strategy for a sustainable future:

To raise the profile of the energy industry as one of the most exciting to work in to combat increasing competition from other industries for these shortage skills – the sector needs to be well presented to young people as a prime career choice.

Re-skilling and cross-training existing or new staff to combat the decline in SET skills – support for training organisations is critical if they are to meet industry needs on high level skills.

Getting the rewards right for engineers and technical specialists in order to combat decreasing numbers of SET graduates choosing to enter a SET career – SET careers need to be seen as attractive and financially rewarding to compete with ‘high flying’ roles in finance, management and law.

To develop new and potential graduates at an early stage to combat lack of experienced hires for key roles in an expanding industry – employers need to be more innovative in their methods of training and development, looking for efficient and effective ways of benchmarking employees’ competence and giving them the experience and support to develop those skills.

Developing strategies to manage retention of experience and transfer of knowledge – to make a more creative use of an experienced workforce and prospective returners to combat the rapid strides towards larger scale retirement year on year.

Engagement with universities offering technical support, student placements and allowing recruits to return to university to promote the industry to future graduates.

The next phase of this work will consider some of the specific areas that have an impact on how the industry deals with the skills shortage in the next few years. In particular, the take-up of energy-related university courses and the numbers of graduates going into energy-related roles.