Once considered a safe asset, oil and gas is becoming increasingly unstable, with investors and employees now straying away from the sector. With high public scrutiny, a price crash, and severe disruption caused by Covid-19, it comes as no surprise that interest in the sector is declining. As new talent looks to relocate to other fields requiring technical knowledge, the offshore sector might need to up its game in order to attract new talent.
While the current outlook of the industry might not be too bright, Boris Ivanov, founder and managing director of international petroleum producer GPB Global Resources , suggests that it might not be too late for oil and gas to bounce back from the setbacks by rethinking its current approaches and future recruitment strategies.
“The situation can certainly be reverted, but only if oil and gas recruitment teams develop strong attraction and retention strategies,” he says.
The reality of the dire oil and gas job loss situation
Prior to the Covid-19 crisis, drilling had already been in decline over the past few years, influenced by a downturn in activity. As Reuters reported in October 2019, “employment in oil and gas support activities, subsector 213112 in the North American Industry Classification System, had fallen by 14,000, or 5%, between its cyclical peak in October 2018 and August 2019.”
In addition, the number of rigs drilling for oil fell by 176 (20%) and for gas by 51 (26%), between November 2018 and October 2019, according to oil service company Baker Hughes.
Furthermore, analysis by BW Research Partnership, a California-based researcher, which used US Department of Labour data, combined with the firm’s own survey data, found that the US oil and gas industry shed nearly 51,000 drilling and refining jobs in March 2020, a consequence of the lockdown-affected fall in oil and gas demand.
When it comes to the Covid-19 impact on UK oil and gas, the ‘Business Outlook: Activity and Supply Chain’ report by Oil and Gas UK (OGUK), the UK trade association, published in April, predicts that the UK’s oil and gas industry is expected to lose as many as 30,000 jobs over the following 10–16 months and see drilling levels plunge by a third amid the Covid-19 drop-off in investment and slumping energy prices. Along with this, an increasing number of graduates turning away from the sector could mean a serious long-term lack of talent and sufficient workforce for the future, according to OGUK.
Ivanov also points out that the crisis could intensify as the sector goes through “a transformation known as the ‘Great Crew Change’, when many older workers approach retirement and only have a small pool of recruits to pass their decades of experiential knowledge on to. This means the industry loses invaluable experience.”
What can be done to stop the losses
While high prices, low borrowing costs, and good investment in the offshore sector have previously made it attractive for employers and employees alike, recent trends seem to indicate that, in order for the industry to recover, it will need substantial support and a re-evaluation of priorities.
As OGUK chief executive Deirdre Michie has said in a Bloomberg article, the new Covid-19 crisis placed a burden on the worldwide offshore industry not long after the previous downturn brought by the 2007-2008 financial crisis. Since it is unclear how long these challenges will last, “this industry will need sustained and targeted support if it is to weather the storm.” Government funding will remain essential during the following years to help build-up and redefine the already changing sector.
In relation to attracting graduate interest and bringing back trust in the industry, Ivanov suggests that businesses need to mend the disconnect between millennial views on the oil and gas industry and “real career opportunities”.
He explains: “Research shows that young people are less attracted to huge salaries and are more interested in roles that offer promotion opportunities and growth. Recruiters should therefore be clear on their firms’ interests in reducing the risk they pose to the environment, communicate new career progression opportunities, and combat misconceptions by sharing stories from current employees.”
An important step that recruitment teams from the sphere should also take is to adjust their recruitment strategies; Ivanov believes that “firms need to recognise that the world has changed and consequently, the desires and priorities of the next generation of talent are different.”
Offshore industry strengths and alternative job options
Despite the currently uncertain future of the oil and gas sector, a quick rebound in oil prices, provoked by further support and increased offshore demand, would still be a viable solution to revive the industry and bring jobs back.
While the sector is battling the current challenges, its globally dynamic nature still has a lot to offer. Not only can the sector look forward to further technological progress and industrial developments, but gas is planned to remain an essential part of the energy mix during the renewable transition.
However, in order to attract youth to the offshore business, Ivanov believes that conscious changes need to be made: “The younger generation wants to be multi-skilled, and expects to work smarter rather than harder. The oil industry needs to get this balance right if they are going to attract the top talent and create an appealing culture and work environment.”
When it comes to graduate talent relocating to other fields, graduates with oil and gas education would likely consider joining other forward-thinking power sectors, which require similar knowledge and technical capabilities.
Ivanov continues: “Oil and gas companies seek digital business talent, especially people with industry, leadership, digital skillsets, and a drive to solve business needs with digital solutions. There is fierce competition between industries for graduates possessing these skills, with many students choosing to move into fast moving technology firms over traditional sectors.”
Having said that, the need for graduates to relocate might mean that technically-educated young people would be welcome to join innovative power companies instead, as renewables are already seen overtaking fossil fuels.
With unexpected events like a crash in demand and negative oil prices, brought on by the global Covid-19 pandemic, it is difficult to predict how well the industry will handle the next obstacle. Whether recent doubts regarding the future of oil and gas will continue to scare away new graduates or offshore will end up providing a fresh workforce to the growing energy sectors, only time will tell.