5. Loss of professionals
These shortages are mainly
the result of demographic
challenges. According to a
Boston Consulting Group
study, Turning the challenge
of an older workforce into a
managed opportunity, by
2050 the global population
aged 60 and over will
exceed the number of
people aged 15 and under
for the first time in history.
6. Reduction in Production
For the oil and gas industry, there are two major business challenges:
(i) reduction in production caused by supply shortages of workers;
and
(ii) a reduction in productivity due to an ageing workforce as well as
replacement of experienced workers with less experienced
workers.
These challenges are very real. Two-thirds of the Society of Petroleum
Engineers (SPE) membership is now over 40 years old; and according to
Cambridge Energy Research Associates (CERA), more than half of all oilfield
professionals will reach retirement age in the next decade. In Saudi Arabia,
more than 60 % of engineers will have less than ten years’ experience in the
next few years. In the Middle East, daily operations in the industry are
threatened as a result of unprecedented growth. Overall, the skills shortage
has resulted in the use of contract labor on a regular basis in almost all
occupations, including senior positions.
“The big crew change: Turnover in the oil workforce”, in The Oil Drum: Europe, 17 Mar. 2007.
“Fight the talent war”, in Business Management (Cardiff), No. 4, Oct. 2008.
G. Thomson: “Tackling the skills gap in the oil and gas sector”, in Holyrood (Edinburgh), 28 Mar. 2011
7. ILO - G20 Training Strategy
“A skilled workforce for strong, sustainable and balanced growth”
This Strategy focuses on building bridges between the world of
education and training and the world of work. It explains why a
skills strategy is needed, outlines a conceptual framework and
assembles the essential building blocks of a robust training strategy
– including the roles of the social partners
10. Growing Job roles within the
Oil and Gas Industry
An aging workforce
Because of the high
level of training and
experience required,
the oil and gas
industry is a middle-
aged person’s game.
The Society of
Petroleum Engineers
estimates that up to 50
% of skilled workers
could retire within the
next 4 to 6 years,
presenting an
immense challenge to
the industry.
11. Strategic Issues Oil and Gas
Companies faces now
Due to the technical
nature of the industry
today, the current open
positions cannot be filled
by simple laborers. They
need to be filled by an
individual with technical
expertise.
New hires need to be
experienced engineers
and geoscientists who
understand the
technology, and can make
contributions to operations
immediately. According to
some reports, it can take
anywhere from 7 to 10
years to develop a senior
engineer or scientist. The
challenge then is attracting
young technical workers
into the industry today, so
that they can take over
when the older generation
retires in the next 5 to 10
years.
12. Shaping the supply of talent
Some countries will see a
100 percent to 300
percent increase in
production from 2010 to
2030, according to
Rystad Energy.
E&P requires a huge
range of operational,
technical and
commercial skills, ranging
from geological and
subsurface specialties to
complex engineering
and project
management
capabilities. These jobs
demand the ability to
make decisions that are
based on deep and
varied experience, in
ambiguous and
technically challenging
situations.
Bain industry brief, 2011
13. Big Crew Change looming
ahead
Halting the decline of
production from the world’s
mature fields depends on finding
people with the right skills and
experience for emerging
conditions. Companies are
exploring for oil and gas in often
difficult-to-access reserves, such
as at increasing depths offshore,
in the Arctic and in
unconventional resources.
People with experience in these
more unusual conditions are, by
definition, more scarce. Even
more serious, a shortage in
skilled technical talent has major
implications for the industry’s
entire pipeline of top leadership,
which tends to move up from
the ranks of experienced
managers of skilled technical
positions. With what’s known as
the Big Crew Change looming
ahead, companies face an
even more significant challenge:
crew change at the top. The
industry will have to groom
tomorrow’s leaders quickly from
thin ranks.
Bain industry brief, 2011
14. The 5 forces
behind the talent shortage
Bain industry brief, 2011
1. RAPID INDUSTRY GROWTH
2. HIGHLY SPECIALIZED AND EXPERIENCED JOBS
3. AN AGING WORKFORCE
4. CONSTRAINTS ON SUPPLY
5. RISING TECHNICAL COMPLEXITY
15. Build an understanding of
the Skill Gap
Make an analysis of the mismatch between supply and demand makes these challenges visible.
Understanding the demand side begins with some fundamental questions:
What will the business look like over the next five years?
How are the business’s needs changing?
How many employees will the company need in each discipline, sub-discipline, geography or functional unit?
What skills does existing people have?
What skills must new people have?
Construct scenarios based on quantitative factors like the number of new wells and active rigs, and
qualitative factors like technical complexity and portfolio needs.
How many mission-critical workers, such as geologists and well engineers, do we have in each key
discipline? What are their experience levels? How rapidly are workers
gaining the experience they need?
