Getting the right human resources for Middle East's Oil & Gas Industry: The next decade's challenge (page 1 of 2)

The Human Resource Departments of regional Oil & Gas Producers face one of the biggest challenges they have encountered in recent years. The pool of engineers, vital for the whole industry, is getting older. Our research indicates that the average age of production engineers in the region is already around 48.

The consequence is that there is a lot of pressure to replace this ageing workforce within the coming years. Training young professionals to fill the posts of senior employees, who often have more than 25 years of relevant experience, is not easy for HR departments and when it is compounded by rising competition for young engineers worldwide, it becomes a major strategic issue. "The increased oil demand and the resulting pressure to boost oil production already has a direct impact on the demand for additional production resources. Technology and innovation can be used to help to improve production, but in the short to medium term, oil companies will depend on the supply of well educated and experienced employees to ramp up production", says Joern C. Kuntze, partner of a leading UAE based consulting firm Middle East Strategy Advisors (MESA).

It is well known that there is a worldwide shortage of qualified engineers. Major oil & gas producers are competing heavily for these scarce resources. Our regional oil producers are often at a disadvantage in this competition, because they lack the reputation as a first class employer, while international firms like BP, Shell or Total have a strong Human Resource brand distinguishing them as world-class employers, attractive to young professionals. The worldwide shortage of engineers in this highly competitive market is also increasing competition for high potential employees and the situation in the Middle East is getting worse. "All our clients in the oil & gas sector complain about the difficulties of filling vacant positions, and particularly about the quality of applicants, indicating that getting skilled people is becoming increasingly harder," says Mr. Marc Hormann Senior Consultant at MESA. There is already competition in this sector for human resources between GCC countries, a trend which could become a major hurdle for the region's overall economic development. In addition, most GCC countries have set aggressive nationalisation targets to replace retiring expatriates with nationals. The national supply base of experienced engineers is limited, so this requirement turns a difficult task into a major challenge for HR departments.

In short, the situation calls for a review of current Human Resources management practices and firmly putting the HR challenge on top management's agenda. Many companies do not manage the HR value chain as a whole and often lack a clear strategy to respond to today's challenges. A common pitfall is that HR managers react to the pressure by launching numerous initiatives to solve specific problems, without the strategic perspective to provide the coordination and a clear vision translated into measurable goals. "It is actually a surprise that business strategies are reviewed and adapted on a regular basis whereas HR strategies dealing with the most valuable resource have hardly been changed within the last 15 or 20 years," states Mr. Hormann. In recent years some companies have realized that there is a problem. New management techniques such as professional recruitment - based on systematic assessment tests and executive searches; competency based management; career and succession planning and tailored compensation plans have been increasingly gaining ground.