Turning the Faucet Back On: OFS Rebuilding Workforce

Turning the Faucet Back On: OFS Rebuilding Workforce
After a prolonged oil slump and hundreds of thousands of layoffs, oilfield service companies are having to hire talent again.

After the storms of the oil and gas industry’s downturn subside, employers are then left with the aftermath – which often includes a diminished workforce.

Oilfield service companies were hit tremendously hard during the downturn caused by plummeting crude oil prices. Houston-based consulting company Graves & Co. estimated almost 200,000 jobs were lost globally in the service sector alone. Majors like Schlumberger, Baker Hughes and Halliburton laid off thousands during the multi-year oil slump. Baker Hughes also implemented pay cuts to some employees as companies grappled with the uncertainty of the length of the downturn.   

But now about three years after the industry’s woes began, exploration and production (E&P) activity has picked back up, fueled in part by opportunities in the Permian (deemed by some as Permian Panic) and the Vaca Muerta.

Large oilfield service companies of course aren’t the only ones who suffered. Smaller companies felt the pain as well. For example, US Well Services, LLC, a Houston-based company that provides hydraulic fracturing services in unconventional oil and natural gas basins in North America, has had to rebuild its workforce as well.

“Like others, we went through multiple layoffs, loss of our 401K match, a pay reduction for salaried employees throughout the entire organization and other non-essential reductions in expenditures,” Dean Fullerton, vice president of human resources, US Well Services, LLC, told Rigzone.

Because the company didn’t have to completely shut down any of its fleets of equipment during the downturn, it allowed them to respond sooner to the upturn in demands for frac horsepower, he said.

Time to Rebuild

US Well Services, LLC has recently opened a new district in the Bryan/College Station, TX area, shifting one northeast fleet to this location, and the company is also in process of bringing up two additional fleets. This has caused the company to hire 150 people companywide this year with plans for at least 50 more in coming months, representing a workforce increase of 25 percent.

“The Texas basins other than the Permian have not really rebounded yet and this has resulted in a good supply of talented applicants being available either in the area or who wish to return from the Permian,” Fullerton said.

Fullerton goes on to say that the company has been blessed with a steady flow of experienced applicants – though he admits there are some challenges.

“So far we have had many people who wish to join us, especially new petroleum engineering talent, but unfortunately a lot more are available than we have positions,” he said.

Describing the downturn as “deep and painful,” Fullerton said the industry lost a lot of credibility and talent in the industry from experienced workers and newer entrants.

Some experienced workers retired or simply tired of the ups and downs, and some of the green hats had never experienced it and sought safer, less volatile industries and changed careers,” he said.

With every downturn comes an opportunity to learn something. Considering the most recent one was described by seasoned oil and gas professionals as the worst they’ve lived through, the hope is that the industry learned from this.

“The newest generation of workers today isn’t as willing to ride out the ups and downs that workers have in the past and would rather leave the industry than experience even one more layoff,” Fullerton said. “Pulling that lever again anytime soon as companies have done quickly in the past will result in people abandoning our industry altogether if we have to retract again. Let’s hope this upturn ends up more of a marathon and less of a sprint that can sustain employment and the U.S. economy for years to come.”     



WHAT DO YOU THINK?


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Christopher Melillo  |  October 18, 2017
Rick - I noticed you commented on the article back in July as well. I think where will continue to see bigger waves of hiring will only be in the OFS vertical as so many of the operators have learned very well how to operate at the professional engineering and geo-science ranks with lesser headcounts than in the past. As a result of this learning and application of practices to operate much leaner than in the past, drastic price hikes will no longer dictate the hiring strategies of the Operators. I think we see a typical job volume that results from standard attrition as most other industries exist.
Rick  |  October 12, 2017
I really want to see what happens when prices get higher or even stay as they are. The effects of the GreatCrew Change haven't been fully felt yet and more people are about to retire. Couldn't get a proper figure, but apparently a very high percentage of the workforce was on their way to retirement...which means not coming back further down the road at all. A lot of the newer generations don't want to work in O&G for several reasons, especially now that they have seen how ugly downturns are. I've previously read that about 30% of workers never return after a downturn. Think the statistic it came from Halliburton (https://tinyurl.com/y7haxapa) Before the downturn Schlumberger mentioned that over the next years we would need to hire lots of people just to maintain the workforce, can't remember the number here. Instead around half a million lost their jobs worldwide and that's without considering other numbers out there that point to much higher unemployment like it was mentioned by a consultant on an article here on Rigzone some months ago (https://tinyurl.com/ydc29mqr). Remember also reading that companies now want to pay less of course. Due to the lack of investment several people have already mentioned the obvious: there will be a severe lack of oil in some years which will shoot prices up. Really curious to see the outcome of this mess.


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