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Hays: Industry at risk of future skills shortages due to market changes

Recruiting firm Hays released its sixth annual Oil & Gas salary guide, looks at market uncertainty
Hays: Industry at risk of future skills shortages due to market changes

Ninety-five per cent of oil and gas professionals said salary is the most important factor when considering a new role. In addition, 92% of job seekers judge company reputation as a crucial element in their decision making process when evaluating new job opportunities, according to the sixth annual Oil & Gas Salary Guide, produced by recruiting experts Hays Oil & Gas.

The Guide was completed in November 2014 and included responses from more than 45,000 oil and gas professionals across 25 disciplines in 188 countries worldwide. Significantly, 10,000 respondents globally were employers or hiring managers within the industry. Hays admits due to the timing of the survey, the fall in global oil prices has not been fully reflected in the Guide. The effect of the price drop is being seen in businesses across all oil and gas regions. Projects have been delayed, paused or cancelled, causing companies to re-evaluate hiring plans and is expected to continue for the rest of the calendar year.

However, Hays captured overall trends from a snapshot of the end of 2014. To attract top talent, 72% of employers felt they had to make improvements to their employee offering in the last year, including training and development, compensation and rewards. As company reputation is such a significant factor for job seekers in evaluating a job opportunity, employers increasingly have to develop a compelling employee value proposition to be perceived as an employer of choice. In order to compete for the best talent and niche skills, employers must showcase their training and professional development programmes to help promote their brand and set themselves apart in the industry.

Skills shortages were again the biggest concern for employers (30%) although economic instability was a close second (24%), reflecting the nervousness that had already crept into the industry when this survey was undertaken. 29% cited inadequate succession planning for knowledge transfer and skills retention as the key cause of skills shortages within the industry. While potential layoffs could lessen the skills shortage locally, there will continue to be shortages for experienced talent within in-demand skill areas, such as subsea, petroleum engineering and increasingly LNG.

“Since we collated the data the industry has been through unprecedented times. Projects with attractive economics are likely to continue, but new projects will come under increased scrutiny and, if no longer economically viable under the new oil price regime, could be postponed or cancelled,” says John Faraguna, Managing Director, Hays Oil & Gas. “However, teams managing day-to-day operations still require the resources necessary to complete projects on time and within budget. At the other end of the spectrum, smaller businesses are responding to recent changes by focussing on interim hiring, shifting from multi-year contracts to short-term specialist assignments.”

With hiring plans impacted, employers are faced with difficult decisions: how to reduce costs while still having the right skills to deliver projects. Furthermore, a decrease in hiring is likely to exacerbate the skills gap and could result in further skills shortages in the future. This year’s survey revealed 22.5% of respondents worldwide are aged 50 and above, which means that a significant portion of the tenured, skilled workforce will be retiring over the next 5+ years. With the anticipated reduced hiring of Gen Y workers due to market conditions, the future generation of industry leaders, the industry may be creating a future skills gap issue, much like it did in the mid-to-late 1980’s.

Global findings:

  • The discipline areas that saw the biggest uplift globally were piping (15.8%) and construction (12.1%), reflecting the need for skilled candidates as mega projects entered the construction phase.
  • Global salaries saw an increase of 1.3% over salaries in last year’s Guide
  • At the time of survey, 87% of employers said they had confidence in the industry, a five year high for this survey. However, since the fall in oil prices industry confidence has been shaken and business activity has been impacted.
  • For 95% of oil and gas professionals salary is the most important factor when weighing up the decision to take a new role.
  • The oil and gas workforce remains globally mobile with 39 per cent of respondents working abroad, with 91% of those surveyed open to an international move for their next role

Image from LSU

 

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