Searching for Talent: The Plight of Oil, Gas Companies

Searching for Talent: The Plight of Oil, Gas Companies
A report from a Houston-based executive search firm explores how oil and gas companies can develop technical leaders during the upswing of the downturn.

The oil and gas industry has been aware of its talent shortage for years – fueled in part by retirements, a pause on graduate recruitment during the downturn of the 80s and cutting of training programs. But now that the industry is ramping up E&P (exploration and production) activity again, the shortage is more pronounced.

Still, some would say employers can look within their own organizations for potential leaders, but if there’s nobody in the pipeline – what can be done?

In a Feb. 28 whitepaper, David Armendariz, managing partner for executive search firm Lucas Group, addresses the topic of developing technical leaders. While the whitepaper focuses primarily on Houston, Armendariz looked at companies that are based and work in areas throughout the United States.

He said layoffs and tight budgets left oil and gas companies with less money to invest in technical skill development.

“Rather than grooming younger employees for top technical positions, companies were forced to slash training programs and cut payroll,” Armendariz said. “Now companies are finding that they have few, if any, mid-level employees who are adequately trained to take over more senior positions.”

Many laid off workers argue that there can’t possibly be a shortage of skilled professionals, given the 440,000 global layoffs. Armendariz said though there’s a larger candidate pool of younger candidates and industry veterans, many young professionals are looking outside of the industry – leaving another talent gap for the future.

“Many [industry veterans] are working on technical projects and are adding value, but the whitepaper focuses on leaders who will grow and shape the industry,” Armendariz told Rigzone. “Those skilled professionals – the high potential leaders – are still difficult to recruit out of their current companies. Firms that recognize the war for talent is still going strong will be best positioned for the industry’s rebound.”

Developing top technical talent is not impossible, but it does require a shift in recruitment strategy, said Armendariz said.

This involves:

  • Understanding the current talent gap. This can be done by asking the following questions: What will our energy business look like in five years? How many mission critical employees do we currently have and where are we falling short? At a minimum, how many new hires do we need in each discipline or geography to bridge this gap? How much experience will our new hires have and how quickly can we help them gain additional on-the-job experience and develop their leadership skills?
  • Maximize available talent. Rather than assessing the pool of potential leaders and modeling their likely advancement paths globally through the organization, some companies think only of their local talent – failing to track and coordinate their development at a global level. By redistributing talent throughout the organization, it will help the recruitment team better understand what gaps currently exist. Then they can develop a strategic model for long-term recruitment and internal promotion efforts.
  • Recruit talent with global leadership potential. In today’s industry, globalization and geopolitical risks are just as important as operational excellence and profitability. Tomorrow’s technical leaders must be global leaders as well.
  • Look outside the industry for confident decision-makers and quick learners. Disqualifying candidates for a lack of technical skills won’t work anymore. Instead, companies need to think outside of the oil and gas talent box. These are the people who take it upon themselves to further their knowledge and leadership skills.

“Companies that are positioning themselves in the best way for future growth are spending money, time and resources to identify and grow future leaders,” Armendariz said. “High potential employees are easier to grow organically and are rooted in the company culture better than firms who are forced to recruit reactively.”


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.

Adam Wiltshire  |  April 24, 2017
I have had a the same opinion three times now - Once after every crash / downturn the same problems occur. The Older more experienced hands (who earn more money) get the bullet whilst young graduates who are intelligent but low paid are kept on. Intelligent does not mean knowledgeable, it takes training from the Old guys you have paid off . How does this keep happening. Easy the people doing the paying off are HR. They arent going to pay themselves of are they ? So instead of looking at the sustainable future, they stare at spreadsheets and cut anyone who earns more than X. Thats intelligence working for you not common sense. Neel Nawani came up with a reasonable idea to take from the Merchant Marine. Thats fine to run the platform or rig but not to drill, complete, well test, and produce a well. That takes Real Oilfield people which are the ones who are missing --AGAIN !! Id like to see an experienced person with both Field and Managerial skills to look after my company not some graduate who doesnt know or appreciate, the work that actually goes into the Oil business buit can read a spreadsheet.
Brian Mitchell  |  March 06, 2017
If, as the article states, recruiters are focused on finding talent working at another company or working in another industry while dismissing the hundreds of thousands of people who were good enough for the industry 2 years ago, but got laid off, recruiters are on a self inflicted fools errand. If they truly want to build talent for the future, they better not dismiss veterans with depth of experience and maturity to serve as mentors. They are wasting people with less experience who had a drive to make the oil and gas industry their career, but they got let go because of this bust. I didnt leave my job, my job left me. The more I see of these articles about HR staff and recruiters struggling to staff up, the more convinced I become that my oil career is over 10 years before I planned.
Simon  |  March 06, 2017
Look outside the industry for confident decision makers and quick learners, wow theres a recipe for Macondo Mark II ... its very clear that the industry has learnt nothing from past experiences. The industry will hire quick decision makers unfortunately the Technical skills take years to develop and good luck getting Technical people back who have invested so much into the industry only to be shown the door. Take it from a 10 year Drilling Engineer with a double Major in Mechanical Engineering/Computer Science and Masters in Petroleum Engineering who understood that this industry was not about theory but practical know how.
Neel Nawani  |  March 06, 2017
For offshore platforms & rigs, seafarers crossing over from merchant fleet will provide a ready manpower pool. Not just on deck, but also in machinery spaces, the officers from merchant marine are more disciplined, better trained, more adaptable, more multipurpose / multi-disciplinary / multi-functional, and less fussy than the regular offshore crew I have seen. For example, a Chief Officer or a Master is well versed with cargo / material placements & transfers, vessel stability, watertight integrity, ballast monitoring & control, operation & maintenance of LSA & FFA, and can easily handle the functions of Barge Master / Engineer & Ballast Controller & GMDSS Radio Station operator & QHSE together. They can easily supervise the roustabouts & crane operators / helicopter operations / radio operators / safety officers, conduct safety drills and safety meetings They learn quickly, as they usually perform more complex tasks onboard ships. O&G industry can certainly make good use of these personnel, particularly since there is a surplus of officers nowadays !
Anthony Hall  |  March 03, 2017
This demographic and institutional phenomenon has been anticipated for years - across all industries. Company management chose not to invest in HR development - to enrich themselves and shareholders - as the markets demanded. To attempt to characterize it as an inevitable response to market forces is facile. It was predictable - and the ostriches put their heads in the sand with halcyon dreams of their rich retirement with scant regard for the very obvious and widely anticipated consequences.