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Deloitte: Oil and gas sector faces talent shortage

Surveyed oil and gas executives ranked managing human capital and expanding into new markets as top strategic concerns, according to a new report by Deloitte. Executives also found that a looming talent shortage exists in many fields; notably operations (81%), IT (61%), risk and regulatory (62%) and research and development (60%).

Deloitte’s Talent Edge 2020: Redrafting Talent Strategies for the Uneven Recovery surveyed 376 oil and gas executives, 34% of whom were from Europe, Middle East and Africa.

“We are witnessing a growing trend of oil and gas companies expanding into global and new markets as a top strategic priority. Moreover, talent management is no longer confined to the company’s country of operation; rather the search has gone global, to find skilled and critical talent,” says Ghassan Turqieh, Human Capital consulting partner at Deloitte in the Middle East.

Shortages of critical talent loom in oil and gas sector

Executives were focussed on finding talent from across the globe, with 38% citing human capital management as a top concern, compared to 28% for other sectors. An equal 38% declared that expanding into global and new markets was a priority, compared to 32% in other sectors.

Despite startlingly high unemployment across the globe, a higher percentage of oil and gas leaders expect a severe talent shortage over the next year in almost every category. The most critical area is operations, with 81% of respondents foreseeing a moderate to severe shortage, compared with 45% in other sectors.

Mark Walker, Research Director, Insights and Vertical Industry Practice with IDC MEA spoke to about staffing issues in oil and gas:

“Staffing remains a key issue, which is heightened in the oil and gas sector because of the ageing expert population. The petroleum engineers are all getting older but not replaced, so as they retire their knowledge is lost. Technology has a role to play in harnessing that information, keeping it and reapplying it through the automation of processes, databases and so on.”

“The fact of the matter is the industry has too few people. That’s in the petroleum side, as well as the IT side. Good IT people are hard to find generally and are difficult to retain, but the training can become obsolete very quickly. It’s an endemic problem.”

The survey found that concerns are focussed on the most experienced employees, with 41% expressed high or very high concerns retaining Baby Boomers, versus 31% for other sectors, but even more so on less experienced Generation 7 workers (54% high to very high concerns), inferring that it is a greater issue securing new and upcoming talent. The in-between Generation X category was in line with other sectors.

“This skills gap is the result of the boom/bust cycle inherent in the Oil & Gas sector,” the report says. “Very few new workers were hired in the late 1980s. As more-experienced petro techs retire, the sector is left with less-experienced workers who lack the knowledge and depth of understanding to undertake new projects. All of this is taking place as the sector runs at full capacity and the world demands more oil and gas from technically challenging sources such as shale-rock formations and ultra-deepwater wells.”

Retention concerns rank high, despite investment

Only 28% of respondents said they were confident in the effectiveness of their retention strategies, with 45% utilising an updated plan. However, 38% expressed a very high level of concern over retaining critical talent – compared to 25% for other sectors.

About a third listed developing leaders and succession planning as a top talent priority, both now and three years from now, with most executives looking to strengthen leadership development, but many programs fall short on performance and investment.

Only 15% of oil and gas executives believed their retention programs were “world-class” in all regards, while 45% believed some areas sat within that category. Overall, most oil and gas executives expect to see a higher level of investment in talent programs.