Energy Strategy, Technology, and Current Issues in the Oil Industry
Energy Overview / Current Issues in Energy

Susan Smith Nash, Ph.D.


Issue:
Shortages of qualified personnel.

 
Beginning in the mid-1980s, when commodities prices collapsed and the industry went through decades of consolidation, hiring virtually stopped. As a result, there was a 20-year gap, and many of the survivors of that time are now approaching retirement age.  Further, technology is changing at a rapid rate, which makes it difficult to achieve short-term solutions to the talent gap. An inherent volatility makes it difficult to attract individuals to the field. As a result, there are projected to be huge shortages of labor when the most experienced individuals retire.
 
The “great crew change” has been anticipated for around 10 years, and it is occurring, but not necessarily in the way that was expected or projected.  There is not as much concern about knowledge transfer as expected; instead the service companies and research consortia are meeting the gap.
 
The challenge extends across the organizations, but primarily in the fields of science, engineering, and systems that are specific to the energy industry. Human resources shortages are most pronounced in the oil and gas industry; coal, electricity, alternative energy, etc. did not undergo 15 years of depressed commodities prices.
 
The quest to find replacements for the senior-level engineers and geoscientists who are retiring has begun. Companies are bridging the knowledge and experience gap by encouraging retiring engineers to continue to consult. Complicating the issue is the emergence of new technologies in all aspects of the industry, from upstream, to midstream and downstream.

Companies often comment that they need to hire experienced, now-retired oil and gas professionals to mentor students, who do not know how oil and gas operations should be run. While universities do offer petroleum-focused courses in engineering, geology, and geophysics, the truth is, that they often do not include training in the day-to-day work of an oil and gas professional. Colleges and universities could build new courses and offer mentoring, but there is often not a budget for it, and further, the proposed courses do not / might not align with curriculum / accreditation requirements.
 
Readings:
 
“The ‘Great Crew Change” Sweeps Across Companies that Rely on Engineers” http://www.chron.com/jobs/article/Great-crew-change-sweeps-across-companies-that-4009108.php

Skilled Worker Shortage Threatens $US 100 Billion in U.S. Energy Industry Projects
http://business.financialpost.com/2013/03/07/skilled-worker-shortage-threatens-us100-billion-in-u-s-energy-projects/?__lsa=f0f9-cab0

Report shows training and development critical for “great crew change”
http://www.pennenergy.com/articles/pennenergy/2013/04/report-finds-training-and-development-critical-for-great-crew-ch.html

53% of respondents revealed that a lack of training and development opportunities would lead them to consider leaving an employer 
Training and development was highlighted as a critical factor in choosing an employer, with 75% saying it was important in their choice of role, and over half (53%) saying they would consider leaving an employer if they did not get the training and development opportunities they required. 37% felt that a lack of training and development in previous roles has held them back in their career.

Guiding Questions:
 
What is the “great crew change”?
 
What caused the “great crew change”?
 
What can companies do to minimize the impact of the mass exodus of skilled, experienced technical personnel?Shortages of qualified personnel.