Oil & gas is facing a severe talent shortage

“The oil and gas industry is experiencing a resource crunch as an aging workforce is not replaced quickly enough with new talent. This is a particular concern given the length of time it takes to train specialists in areas such as geology and petro-physics to make independent decisions.

They are needed to more safely explore and exploit oil wells in increasingly challenging environments,” says Martin Denari, Orange Business Services’ global director of oil, gas and mining vertical.

According to a recent poll of energy industry professionals conducted by Honeywell in the Middle East, one third of respondents cited a shortage of skilled personnel as the biggest challenge to the industry. In an effort to address the problem, 25% of those polled said that they expected to make a significant investment in human resources in the immediate future.

Investment in human resource development is one initiative that private and public energy companies are placing an emphasis on, in order to address the growing talent gap.

“In order to drive the oil & gas vertical’s growth in the Middle East, we need to attract the best in local and global talent. However, with about 50% of skilled engineers being eligible to retire in the next decade, this is a challenge. As the war for talent intensifies, increasingly innovative solutions are required to fill in demand disciplines,” states Darren Grainger, Middle East regional director at recruitment specialists NES Global Talent.

Sean Price, head of direct delivery at Pearson, says that the industry must look ahead to ensure it has the staff requirements to meet an expected strong, global demand for energy.

The Society of Petroleum Engineers estimates that up to 50% of skilled workers could retire within the next ?ve to seven years, leaving a large hole on the experienced talent available.

The wide-held view of both the industry and independent analysts is that there will be a rise in the number of workers needed in the hydrocarbon sector over the coming decade and beyond. This is in part due to an increase in demand for oil & gas, as well as a rise in the number of conventional and non-conventional energy fields being developed around the world.

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There are many reasons for the shortage in skilled oil & gas staff, according to business development solutions provider grow.ME, less people are graduating in sciences, including engineering, and this increases competition for fewer people.

Another primary cause of the skills shortage is simply that companies are not investing enough in the training and development of new recruits, even as their existing skilled resources are coming up for retirement. In many cases, the jobs that are hardest to recruit for are those where there are going to be the highest levels of retirement.

“It has been said that most of the new entrants to the industry have 0-4 years of experience. At some point very soon it will reach critical mass, if it hasn’t already, and if there are not enough qualified people to fill the jobs, the growth for companies that have not invested in the future workforce is headed for a downward trajectory,” Elaine Welch, a consultant at grow.ME, tells Oil & Gas Middle East.

Soft-skills training has also taken a back seat. There is a huge skills gap among the highly qualified and competent technical and scientific workforce, who, as they move up in the organisation, lack the management skills and requisite financial acumen required to drive the company towards achieving its strategic & financial objectives.

Retaining employees:
Most companies have to work hard to attract and retain skilled employees. There is no cookie-cutter solution to tackle this problem. Rather, a multi-pronged and long view approach is required in identifying and setting up a sustainable and accelerated recruitment, intake and development plan that creates ongoing opportunities for skilled and semi-skilled personnel.

This includes a competitive compensation and benefits structure. Although, some caution needs to be exercised on the compensation and benefits structure, as often the pressure of meeting contract obligations means a race to the top of salaries in order to secure qualified staff. Monetary compensation should be considered as just one part of the equation.

“Depending on the size of the company, compensation and benefits can be a difficult proposition. Many of the small to mid-sized companies don’t have the bandwidth, or the financial ability to support such activities as graduate programmes, apprentice programmes, or comprehensive, quality in-house training,” states Welch.

In addition to a gap in skills to ‘do the job’, safety standards are also in jeopardy by not having the right people on the ground.

Furthermore, security incidents in areas of instability, such as the recent tragedies in Algeria and Iraq, place significant pressure on the oil & gas industry and individual companies in attracting and retaining employees, in addition to the substantial financial outlay in providing adequate security around their operations in high-risk locations.

There are many companies in strong competition with one another, especially where expertise is at a premium around very specific technical skills or specialised equipment (eg electric submersible pumping systems).

This often causes the same talent to circulate around just a few companies, often changing companies for more money, better terms and conditions, better rotations, more opportunities for development, and so on.

“It’s not enough to just consider continually pushing up pay and benefits in reaction to recruitment and retention issues though. It cannot be said enough, that companies must look to retain their skilled staff through robust learning and development and succession planning opportunities,” explains Welch.

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A 2013 study, sponsored by BP and conducted by the Society of Petroleum Engineers, found that 53% of those surveyed would consider jumping to another employer for lack of training and development opportunities. Seventy-five percent said training and development factored heavily into their choice of employment. The survey also found 25% believed a lack of training hurt their careers.

“In addition, companies can look to find creative alternatives and initiatives such as work/life balance options for the workforce, this being of particular importance to the younger generations,” says Welch.

According to Pearson, competition for skilled labour is particularly acute in Gulf countries, where despite efforts by local governments, an expatriate oil & gas workforce remains the norm. There is a substantial shortage of workers who possess technical or vocational qualifications in the electrical, production processes, mechanical, pipe-fitting, drilling operations and plant construction fields.

Pearson says that part of the problem lies in the lack of educational institutions providing qualifications in these skill-sets, and that education providers and industry must work together to ensure that the education options available to young Gulf nationals meets the oil & gas industry’s demand for skilled vocational workers.

Pearson, through its training business, TQ, is assisting governments with the implementation of national employment strategies by offering Gulf nationals the opportunity to gain an internationally recognised qualification that will help them gain employment in an oil and gas company.

The training of young people in the Arab world for promising careers in oil and gas will also help to secure the future stability of the industry. A recent report from Deloitte says the sector’s skills shortage is one of the major challenges facing the energy industry.

A lack of adequately trained energy industry personnel is a global problem, but more pronounced in the Middle East where not enough students are pursuing science and technology related careers. Price says that this shortage is set to have serious ramifications for the region’s energy industry.

TQ works with a number of education and training providers in Saudi Arabia and is responsible for operating the Saudi Petroleum Services Polytechnic (SPSP) which was founded to provide training solutions specifically for the oil and gas industry.

The College equips Saudi school leavers with a two year vocational qualification that was developed in close consultation with major employers in the Kingdom to meet developing personnel needs.

TQ also delivers academic and construction skills training at Jizan Construction Centre in the south-west of the Kingdom and provides an extensive portfolio of training options for Saudi Aramco. Price says he hopes that the increasing popularity of TQ’s programmes in Saudi Arabia is evidence of the growing number of young people seeking a career in the hydrocarbon sector.

“A major strength of TQ is its oil & gas training experience, providing young people in Saudi and beyond with the skills and qualifications they need for a long and successful career in the industry,” he states.

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“Equipping school leavers in Saudi with the tools they need to thrive in an energy company is helping to build a strong, capable workforce for the future of a country where oil & gas exploitation is the cornerstone of economic prosperity.”

It is very important that information about opportunities at all levels in the oil & gas industry is proactively communicated from high school level upwards.

Young people need to know where their talents will be best used in today’s world, where they’ll get the most opportunity for learning and development, advancement, compensation and benefits, and the types of jobs that will be available.

Garnering their interest early and ensuring that they know the education requirements is paramount.

In addition to the standard initiatives through school and university career counseling departments, creative programmes must be developed to engage student interest; this could be in the form of direct communication with people in the field and communication through social media.

According to oil & gas service company, AlMansoori Specialised Engineering, students must also be encouraged by the oil & gas companies themselves to take part in the sector.

“Students’ interest in the oil & gas industry can be inspired by taking them on site visits, and holding presentations and conferences to introduce them to the industry. At AlMansoori we conduct regular company tours for students to provide them with an understanding of our business as well as the organisation’s culture,” explains Ibrahim Al-Alawi, Deputy CEO, AlMansoori Specialised Engineering.

There is still much to be done to encourage students to consider career options in STEM-based fields (science, technology, engineering and mathematics).

“It is encouraging to see that many companies are collaborating to drive this forward, and evoke passion and enthusiasm for this industry once again. As despite a push for economic diversification, oil & gas continues to play a central role in the stability of this region, and will continue to do so for many years to come,” states Mansour Belhadj, sales director for Honeywell Process Solutions, Middle East.

Women are one of the greatest untapped sources of skilled labour for oil & gas in the Middle East, according to industry anaysts, although cultural challenges must be addressed before women can fully take part in the sector.

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With more women graduating in engineering and geosciences, there is a significant opportunity for companies who are willing to rethink the way they do business in this male dominated environment in order to attract more women into both office-based and field-based positions.

There are, however, challenges around maternity, dual career couples, and flexible work scheduling.

“As with the student population, there is a real need for the industry to enlighten women about the wide range of opportunities available to them. There are already some initiatives both regionally and internationally to encourage women into the oil & gas industry,” states grow.ME’s Welch.

“The Petroleum Institute of Abu Dhabi has a created a women’s facility to increase the number of undergraduates into the oil & gas industry. Shell also offers a ‘Girls in Energy’ course for 14-16 year olds.”

Women entering the industry will also need to be able to work alongside their male counterparts. This can provide some challenges, due to social and cultural restrictions.
Field-based (and remote) positions will require much more independence than office-based roles. However, there are plenty of options where female technical staff can add value and there are already some who are well established in the industry who could point the way.

“Last year, I was at the Higher College of Technology in Ruwais and I met a bunch of female engineering students who were just so enthusiastic and it was tremendous to see them asking how to break into the industry and asking how to get a real job in the country as a female engineering graduate.

That is a challenge because it is not a traditional place for females to work in in this country, but they are 50% of the workforce, and are perhaps underutilised, so there is a lot to be done,” explains Andrew Vaughan, country chair, Abu Dhabi, VP Abu Dhabi, Kuwait & Syria, Upstream International, at Shell.

“Last year, PDO in Oman won an award for the first female operations engineer to work in the field, so that is something that was not traditionally allowed because of the segregation of women, so they put the facilities in place and they now have women working in the field.”
Thirty years ago, in the North Sea, it was considered unusual for women to work offshore, according to Vaughan, but now it is the norm.

“Every country develops its way past its cultural norms and I think the Emirates will get there in time; there is absolutely no reason why not, which is great,” states Vaughan.
According to grow.ME however, most companies in the region within the oil & gas industry do not have specific policies to encourage the hiring of female technical staff of any nationality, though of course there are companies here who are hiring women into technical positions.

AlMansoori Specialised Engineering says that due to its largely in-field services, women are reluctant to join the company.

“Approximately 70% of our positions are in the field. Due to the conservative nature of our society and the harsh work environment in the field, female technical staff are reluctant to join us. Also, in some countries, females are explicitly forbidden to work in the field.

If government, society and individual attitudes change to become more accepting of females in the field, we may see an improvement in the percentage of female technical staff in our company,” states Al-Alawi, at AlMansoori Specialised Engineering.

There are many challenges facing the recruitment of the appropriate technical staff for the oil & gas industry, but many companies and, indeed, regional governments, are taking steps to combat the talent gap by implementing training programmes and looking towards traditionally untapped resources, such as women, for the technical in-field roles.

While oil & gas may not overcome the talent gap soon, steps are being taken in the right direction.