As oil prices remain high and offshore oil and gas activities continue to grow, what does the international skills pool look like? Has industry made progress in plugging the much-discussed skills gap or is there still a mass shortage of highly skilled individuals? Industry insiders give us the lowdown.
In 2013, offshore oil and gas HR managers and recruitment specialists continued to voice concerns about a serious skills shortage in the industry pitted against an increase in activity. The pause in apprentice training schemes during the peak of the 2008 financial crisis and the imminent retirement of the baby boomer generation has resulted in a huge and potentially damaging skills gap, they warn. Calls for more investment in training schemes and an opening-up of the typically closed industry to skilled people from other sectors and to more women ensued.
A year on, has the global skills gap improved? And has the industry made progress in coming up with a long-term solution to the issue, as it needs to do? In a roundtable interview, six industry insiders working directly in HR or recruitment give us their opinion.
The contributors include Jon Tait, most of world recruitment director, BP Upstream; Jo McGregor, director of well construction recruitment specialist McGregor Consultants; John Faraguna, managing director of oil and gas recruiting expert Hays Oil & Gas; Steve Greig, head of division at recruitment specialist Orion; Frank Wetzels, director at international engineering and project management consultancy Royal HaskoningDHV; and Bruce Christie, head of HR for brownfield asset management business at multinational consultancy, engineering and project management company AMEC.
Heidi Vella: Has progress been made to plug the offshore oil and gas skills gap?
BP most of world recruitment director Jon Tait: The issue that we now face is that demand has outstripped supply. This is especially true in the case of engineers and scientists, who are the life-blood of the oil and gas sector. This is a trend that will continue in the medium term.
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McGregor Consultants director Jo McGregor: I think it is a serious, on-going problem. I think there has definitely been progress to plug the gap. There are a lot more apprentice and graduate schemes and so on. It is being addressed.
Hays Oil & Gas managing director John Faraguna: Many employers have optimistic expectations of headcount growth for the year ahead, with businesses continuing to rely heavily on contract workers and permanent hiring reaching an all-time high. Yet, with a growing number of new workers entering the industry and the baby boomer generation nearing retirement age, employers will be facing an exodus of knowledge and skill-set in the coming years. This means businesses will need to work hard this year to ensure they have the right people and succession plans in place to ensure their growth for the future.
Orion head of division Steve Greig: It is probably worse this year than it has been. It’s a progressive problem as the markets get busy and new exploration projects come onboard. We are finding it difficult to both attract and retain the staff on a contract and permanent basis. Oil price is really high and what we are finding is a lot of companies are trying to extract the oil and gas as quick as they can so everyone is looking for the same skills. It’s just a supply and demand problem.
The oil price is quite high just now, so I don’t expect it to get any better for the next 24 months. But in the world economy, if something happens, the oil price will dip down and the activity will be shelved. What we’re finding is a lot of the projects are being looked at from a cost point of view right now and if there are not many people available the rates go up. What we’re finding now is a few projects have been cancelled because it is not cost-effective. We have just started seeing that in the last three or four months and that will probably become more common as we move through 2014.
Like any job tenacity and perseverance go a long way, but what else does it take to become a specialist oil and gas recruiter?
HV: Which areas of the world are most affected?
JT: The competition for talent is taking place on a global scale and isn’t limited to one part of the world. There are a number of global hot spots, in which skilled workers are in particular shortage. This can be seen particularly in countries that are rapidly developing their oil and gas industries. So, for example, in Angola there are 15 operators, all competing for talent, and this is creating one of the most competitive recruitment markets in the global oil and gas industry.
HV: What more needs to be done to plug the skills gap?
JM: I think just more people coming through; people getting promoted up through the industry would help. It would create new opportunities for people. A lot of people are at retirement age and there is a gap between them and the next people coming through. So promotion is essential. The other issue globally is a lot of countries have a work Visa restriction from the age of 60. There are a lot of very active 60+ people with a lot of experience and it is a shame there are certain countries they can’t work in. There seems to be more and more countries joining that 60 age restriction for Visas.
JF: Social media is a key space to be in when targeting job seekers, particularly the Gen Y workforce, who will play an increasingly important role in solving the industry’s skill shortages. Recruiting in the digital space means creating an effective online profile to attract the right candidate for your position. It is increasingly essential to target today’s job seeker when and where they are available and there may be no better direct route then mobile.
SG: They [graduates] will go through a training plan of maybe three or four years but there is this big gap between the graduates and the experienced personnel. What we’re finding is it is very much cross-selling; we’re trying to get other industries involved, like the armed forces and nuclear fuels division, but the problem with that is as the economy grows the [industries that were] smaller and quieter maybe a year ago are busy now so it is a sort of Catch 22 situation.
HV: Which particular skills are most sought after?
JT: Geoscience disciplines, such as geologists, geophysicists and geoscientists are some of the critical roles where the industry really sees a supply deficit. Additionally, BP is a leader in deepwater exploration and operations and individuals with deepwater experience are highly valued. These include subsea, drilling and completion engineers.
JM: I can only speak from our perspective – we are very specialised on well engineering and we always have a lack of drilling engineers, completion engineers, anything within the well engineering arena.
SG: The people with the HNC (Higher National Certificate) and HND (Higher National Diploma) degrees are very hard to find just now. Obviously because there is not much movement in the market we tend to find it is more your project manager or your specialist, your subsea process structural pipeline engineer; those are the ones in really high demand just now because a high, high percentage of work right now is subsea-based. But everyone seems to be looking for the same people so it is a bit of a merry-go-round, shall we say.
HV: What kind of training and qualifications do you look for in a prospective employee?
JM: Again, because we are well engineering, it depends on the job and the degree qualification they have got, the level of experience and where they have been exposed to. If they want to be a well engineer they would go to university and they would then either get a graduate program or some kind of training within the service industry within the oil and gas industry and be exposed to drilling operations in some form, whether it be offshore or office-based.
It is always good to have someone who has engineering skills but also someone who has exposure to offshore operations. I think personality is equally as important as technical ability. These people work in such a high-pressured job they have got to be able to get on together. Each company has a different ethos and it is important to fit within that ethos. Especially offshore it is so, so important.
SG: We look for a proven academic background with a couple of years of field experience. If it is a project manager we will look for someone who has a degree and a proven track record from a chartered engineer along with 10 – 15 years’ experience within oil and gas areas or a similar industry.
Royal HaskoningDHV director business unit (oil, gas & chemical industry) Frank Wetzels: We are looking for graduates as well as those with a masters in science or mechanical engineering; more or less those with a technical background.
HV: Do you think the industry is improving its appeal to women?
JM: I think it is, absolutely. To attract more women they need to go back down to the school age and I think they are doing it. I think it is capturing people young enough to show them what an exciting industry it is and what the opportunities are within the industry globally, not just locally. Percentage wise you’re probably talking 5% [women coming through the recruitment agency].
SG: We have seen a change. We’re seeing quite a few people we deal with in senior teams and management are actually women now. It has always been a male-dominated area but as the market develops, as graduates come through, it seems that a lot more in the last few years have been female. Maybe as the market becomes more challenging and difficult it will open up a lot more. I think there are more women wanting to be engineers. I would probably say it is still heavily weighted towards males, so probably 85% male and 15% females in the engineering part. This has probably increased from 5% a few years ago.
FW: The oil and gas sector is not very women-friendly, I think. It is still a man’s world. We have our diversification policy and we want to attract women in management positions. If we have two people who are equal we prefer women or those from a minority background. It is very hard to find women who are willing to travel around the world, especially if they have children and a family. It is perhaps even more difficult than finding a man who will travel all over the world. Also, women with a technical background are more scarce than men. We have a ratio in my business unit of one woman to two men, but in the international offshore oil and gas world it is less. It’s about one to ten.
JT: Looking at recruitment trends within BP, it would be fair to say that the industry is increasingly appealing to women. We recruit talented women and around a third of our graduate hires are now female – up from a quarter a few years ago.
HV: What is the industry doing to attract school leavers and university undergraduates, and is it enough?
JM: In Aberdeen there are lots of operators that have teamed up with the secondary schools here and they are doing a fantastic job by spending a lot of time with the kids.
SG: We have seen a lot more emphasis being put on school leavers and apprenticeships but again that takes a while to go through the process. If an apprentice starts now they probably won’t be trained up for two to three years.
HV: Do you find skilled people are willing to travel abroad?
SG: Yes, we are finding an awful lot of that. That’s what is putting a pressure on the skill shortage just now. Maybe a project in the UK is a year and overseas is 10 years, so it is longevity; they will move their families over. We have a network of 40 offices, so we have various initiatives, but first and foremost we try and get local people.
However, with some of the initiatives we have in place…a good example is Poland as they have various skill sets the UK has a shortage of. Bulgaria is coming in to the EU along with Romania, again they tend to be more your blue-collar type of people because it is more prevalent in those areas to have welders, plasterers; the technical engineers don’t seem to exist there. When we do work overseas there needs to be a certain amount of local contractors. A good example is in Kazakhstan there has got to be 90% local contractors and 10% expat.
FW: [In Holland] they are willing but of course if they have a family it is hard to find people who are flexible enough to do a job for one year in Kazakhstan and the next year they will be in Australia. International flexibility is a problem and that is what the sector asks, especially in the projects we are working on.
HV: Are you seeing an increase in people switching from other industries to oil and gas?
JM: Yeah, absolutely and I think they have got essential skills and can certainly be transferred into the oil industry. I think the frustrating thing for them as individuals and something I can’t answer is, where do they go? I think there is a lot of press about how well the industry is doing but there is very little communication on how these people gain access to these jobs. We get a lot of guys that are mechanics, service engineers that work in factories or work in machinery, we also get guys that have no skills that are trying to get into the industry.
SG: Yes, because there are only so many people who have got the skills in the oil and gas industry. People coming from the armed forces has been quite common for the last four or five years. There are companies that have got cross-training courses to train people from the armed forces into to the oil and gas industry. It tends to be more your support services, like your logistics, materials, admin, tech support, management.
FW: Yes, you see it, but, on the other hand, it is difficult to transform them to the industry; the industry has its own culture and is relatively difficult to fit in those people to the culture. The work load, the flexibility, it’s the language. It is doable but it is difficult. We have hired people from the public sector, those from the chemicals sector, from institutional companies like the Royal Bank. Most people were already working in the industry. It is a small world.
JT: We are seeing people with transferrable skills move into the oil and gas industry from sectors such as aeronautics, to give an example. While there is a good pool of talent, the competition for that talent is higher than ever. This is not just from other engineering-based companies, but increasingly from banks, consulting firms and other leading companies, who also value the special attributes these candidates possess.
HV: Do you currently offer any training or apprenticeship schemes?
AMEC head of HR for brownfield asset management business Bruce Christie: Our people all have access to the AMEC Academy, which offers a range of courses in things like management and leadership skills, project management, engineering and technical, supply chain management and business support functions. We also have programmes to help high-calibre people enter the oil and gas industry mid-career, as well as via the traditional entry points. They are all designed to help our people achieve their career aspirations. We have over 170 graduates and trainees in the UK currently working through our four-year graduate programme and trainee programmes, which include design, planning, engineering systems, quality and cost.
FW: [Trainees] make up about 50% of our staff. It could be on different levels; on the executive level [it is] management-orientated but we also give commercial training courses. We have a management development programme but also on the skills and content we give a course.
JT: At BP we run the Schools Link programme, in which BP employees go into schools to lead classroom activities and to mentor pupils. The main focus of this is to support schools in encouraging young people to study the STEM [science, technology, engineering and mathematics] subjects and consider a career that uses these skills. At a graduate level, BP runs a number of initiatives that are intended to allow students to discover the numerous career opportunities that exist within our industry.
HV: If someone is reading this and thinking about working in the oil and gas industry, where should they start?
SG: It depends on what sort of level they are at. If they are a graduate there are avenues available from the universities and the colleges. What is quite difficult is getting the first step on the ladder if you don’t have the experience, a lot of companies will try and get people with experience because they will hit the ground a lot quicker. There are a lot of share fairs and forums, and career fairs are probably the best bet for people to see if they are happy doing it and happy working offshore or overseas.
FW: They should decide if they want to work on the operator side or do they want to be consultants? It is good to start with an operator and gain experience in the oil and gas sector and perhaps make the switch later on [to consultancy], or start with a consultancy because then you see a lot of operators and you gain experience in a more general way and then switch to an operator, to an oil and gas company like BP or Shell.