Industry Pulse Check: Employment & Recruiting

Industry Pulse Check: Employment & Recruiting
Many analysts believe the industry has bottomed out in regards to oil prices, so Rigzone did a pulse check on recruiting in oil and gas.

While it’s difficult to predict the end of the global oil glut, there have been early signs of a modest recovery – in the form of oil peaking at above $50 per barrel in June, talks that the industry has bottomed out and even a positive shift in attitudes among energy companies.

But what’s going on in the recruiting space? Goldman Sachs recently reported that the industry would need to hire between 80,000 and 100,000 workers by the end of 2018 to accommodate U.S. shale production. Companies have pumped their brakes on recruiting during the downturn, but when will we see a green light to hiring?

Voluntary Exits

It might be wiser to consider the recovery as characterized by a yellow light as it is likely to be slow. And hiring will follow suit.

Jeff Bush
Jeff Bush, President, CSI Recruiting
President, CSI Recruiting

“This is unchartered territory for us. This downturn feels so different and has acted so differently from a severity standpoint, Jeff Bush, president and founder of Denver-based CSI Recruiting, told Rigzone. “This downturn has certainly been the worst we’ve seen in our 15 years of being in business – just from an overall stagnation in the hiring arena as well as the quality and quantity of people who have been affected by the layoffs.”

While Bush said he’s seen some companies open up positions, the industry is still a “long way from a full recovery” in regards to hiring.

“There’s still a lot of good people out of work … frankly, there’s a lot of people making a change in their careers away from oil and gas, which is troubling and problematic for the industry,” he said.

The longer the downturn lingers, the more urgent it then becomes for people to secure jobs or retool and get trained in some other discipline, said Bush.

“We’re seeing this at all levels. Certainly at the senior levels where folks are retiring and hanging up the cleats and also folks with a couple of years of experience – maybe a bachelor’s or master’s degree – who are leaving that career behind because they have to.”

Some of those with less experience return to school, rebuild their skill set or take up work in another arena.

“A lot of the senior and mid-level talent who are finding themselves without work for an extended period of time – I don’t see any reason they would [come back],” Bush said.

Yet, Bush noted the resilience of oil and gas professionals, particularly during the downturn, as being “remarkable” and it “speaks to how much the folks who have carved out a career in oil and gas really love the industry.” 

“We’ve seen a reluctance from a lot of people to leave the industry for something else because they love it, they feel a sense of camaraderie among fellow workers or because the industry has afforded them the opportunity to create wealth,” he said. “We haven’t been hearing a sentiment of ‘I can’t stand this industry.’ Instead, it’s really more ‘I just want to come back,’ ‘I just want to get back to work’ and ‘I want to stay busy.’”

Future Recruitment Activity

Mark Charman, CEO of UK-based Faststream Recruitment Group, described the current market as “a mixed bag” with some companies laying off and some starting to hire.

Mark Charman
Mark Charman, CEO, Faststream Recruitment Group
CEO, Faststream Recruitment Group

Charman told Rigzone the small amount of hiring that is taking place is driven by:

  • Companies being opportunistic and making the most of available talent to make very specific hires
  • Contract hiring for projects
  • Some companies have cut too deep and are now rehiring, typically on contract

“We are starting to see more movement of candidates and this seems to be often driven by candidates who think they are going to get laid off and jumping ship before they get pushed,” Charman said. “This has created some recruitment activity.”

But hiring managers anticipate the low oil price environment will be with us for the next few years and despite some companies slowly getting back to business as usual, there will be more adjustments, said Charman.

Steven Goodman, North American energy practice leader for executive search firm Egon Zehnder, said he’s heard reports that the industry won’t see a market recovery until late 2017.

Steven Goodman
Steven Goodman, North American Energy Practice Lead, Egon Zehnder
North American Energy Practice Lead, Egon Zehnder

“The focus has been on survival for many small [exploration and production] companies and individuals have taken on two, and in some cases, three different roles,” Goodman told Rigzone. “As oil prices recover, we anticipate that companies will want to shift the pendulum from that of pure efficiency to include more of a balance with effectiveness … support roles including technical and critical business development.”

Areas to Look Out For

Once the industry is back on the up-and-up, CSI Recruiting’s Bush identified the Permian and Eagle Ford as areas that will come on line the quickest.

“I also think the Marcellus will be an area where we’ll see pretty rapid growth … because the markets are there and it’s just a good area to operate,” said Bush. “In areas like the Rockies, where it’s expensive to operate – there’s geographical and logistical challenges to getting the resources out and to market – those are going to be later to come on line. I put California in that same boat.”

With an oil price recovery, Bush said areas including the mid-continent oil and gas province, Ark-La-Tex and Gulf Coast will start to increase activity.

He said the recovery will be “spotty” and will begin with the lower cost drilling areas coming back followed by the higher cost areas.

“We’ll see a pretty rapid uptick in the drillings and completions arena. We’ve seen some really solid drilling and completions engineers go without work for a really long period of time here and I think those folks will get picked up in very short order once the rigs come back on line,” said Bush. “Production and operations will follow as well as developmental geologists.”



WHAT DO YOU THINK?


Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

Rishabh Steel Industries  |  August 22, 2016
nice blog.


Most Popular Articles