Set in motion by the collapse of the financial markets, the credit crunch and the global recession, the oil&gas industry has suffered its share of setbacks in the past two years as falling commodity prices and the drop in economic activity created a dip in energy demand.
Much has been said about the importance of managing the skills issue during a downturn.
In marked contrast to previous recessions, this time round, we’ve seen firms really understanding the importance of holding on to their skilled people. Some even continued to recruit and take advantage of the talent available during this testing time.
So with the worst of the bad news and economic turbulence hopefully behind us, the time is right to ask: how do we go about managing workforce development in an upturn? The danger is that, as our economy improves, we will see a shortage of skilled labour, increasing the risk of energy businesses under-performing. Fixing this with a mass influx of new employees can create the potential for vast gaps in workforce development and a loss of knowledge and expertise, so it is vital that we take a measured approach to managing the upturn.
Many companies simply cannot afford high recruitment costs or the use of external contractors to fit skills gaps. If they are to deliver the skills demanded by clients at the right price, they need to create them in-house. As an industry, we cannot allow salary cost inflation to return, as we saw during the last “upturn” just how damaging that is. We must be more innovative and courageous in the way we attract and develop people. There is always a place for traditional approaches, but we should not hesitate to do things differently.
An example is the recent pilot transformation training programme where the UK Government and its funding agencies worked with OPITO – The Oil & Gas Academy to re-skill workers from other industries over 16 weeks to prepare them to enter the oil&gas industry.
Investing in our existing workforce is also key: taking the time to properly evaluate those skills that currently exist and how they are best used, and asking our employees where they would like to be professionally and how we can help them get there. And assessing the gaps in our workforce knowledge and recruiting wisely to fill them will ensure we are best placed to take advantage when the time comes.
It is widely accepted that the UKCS will see a significant activity increase from late-2010 through 2011 and beyond. Add on the competition for skilled people that the Olympic build and the emerging renewable industry will bring and we have a serious problem that will become reality in a short period of time.
It is critical that the UK Continental Shelf retains its core skills in the upturn.
If we aren’t ready, if we don’t have the skilled people ready to meet the demand, then there’s a real chance that, rather than striking oil, we’re just going to strike out.
David Doig is group CEO at Opito Strategic
