Tackling the Skills Shortage Challenge in the Oil, Gas Industry

Tackling the Skills Shortage Challenge in the Oil, Gas Industry
Industry experts weigh in on the continuing challenge of finding skilled workers to hire in the oil and gas industry.

Globally, many oil and gas employers have expressed a similar sentiment when it comes to hiring potential candidates: there is a skills shortage. There have been continued efforts on how to combat the skills shortage in the oil and gas industry, but it has not yet been eliminated.

John Colborn
John Colborn
John Colborn, Director, Skills for America’s Future at The Aspen Institute

In a recent panel discussion hosted by University of Houston Energy (UH Energy) and presented by Chevron Corp., industry experts discussed how to prepare for future leaders in the energy workforce. John Colborn, director for Skills for America’s Future – an initiative of the Aspen Institute – was a speaker on the panel and identified a disconnect between institutions of higher education and the industry. He revealed that while colleges and universities believe they’re preparing people well for the world of work, employers say otherwise.

“The industry is telling us they’re not finding the skills they need, which are basic skills, workplace skills and technical skills,” Colborn told Rigzone.

Colborn said it is possible to overcome the disconnect.

“Higher education institutions in general – from community colleges to four-year universities – need to think about how they can better conceptualize material into real-world applications that students can use in the world of work,” he said. “When you look at the pattern of student success, one of the indicators that research has found makes students successful is when they engage in activities that extend beyond the classroom and beyond just one semester.”

Changing Industry Expectations

With an aging workforce, the Great Crew Change is happening across all industries. Graduates are also entering a changing workforce, one that is more demanding.

In years past, Colborn worked to prepare young professionals for the world of work, and job training included things such as making sure to show up on time and basic knowledge of the industry. The understanding was that the industry would pick up from there.

That’s just not the case anymore.

“What we’re seeing is technical skills life cycles have shrunk. Employers are increasingly finding it difficult to invest directly in their workforce to supply these skills,” Colborn told Rigzone. “For even entry-level positions, there is a large expectation to do more.”   

Labor markets are tighter and the war for talent is continuing. Millennials will be the generation to take the reins of the industry as their older counterparts retire. Many oil and gas employers recognize the unique characteristics of millennials, which will require different recruiting methods and strategies. Research shows that millennials value meaningful work, company values and authenticity among employers.

“Millennials have a notion of wanting to be engaged in a company that is going to provide opportunities and grow their skill base,” Colborn said. “That is absolutely an emerging dynamic shaping expectations of employers.”     

Existing Challenges

There are several challenges to overcoming the skills shortage in the workforce. The Great Crew Change has seen industry veterans retiring and taking with them skills, expertise and wisdom. It takes an average of eight to 10 years for a worker to develop that kind of expertise, Elaine Cullen, president of Prima Consulting Services, told the audience during UH Energy’s panel discussion.

She shared research which revealed the importance of having highly-skilled and properly trained employees.

“In a study of fatalities and catastrophic injuries – which were defined as incidents that had a consequence of more than $100,000 – in a 10-year period from 2001 to 2010, 31 percent of all fatalities and catastrophic injuries happened in the first three months of employment,” Cullen said. “Sixty-six percent occurred in the first year of employment and 90 percent occurred in the first five years.”

Cullen said the current pipeline of STEM-capable students (those who are educated in the fields of science, technology, engineering and mathematics) is inadequate to meet the needs of the industry. One solution would be for oil and gas employers to attract those who traditionally have underrepresentation in STEM fields – namely women and minorities.

“There is a need to develop more effective programs targeting young students in the minority sectors. We need to look at the pathways provided by community colleges and expand the partnerships between the industry and academia,” Cullen addressed the audience. “We’ve got to have the engagement of industry experts. They are the people who will be hiring these students. If they are saying, ‘we’re not getting what we need,’ maybe they ought to get involved.”

Taking an Active Role: School & Industry Collaboration

So who’s tasked with developing the skilled candidate pool the industry is seeking? Experts say it should be a collaborative effort between institutions of higher education and the oil and gas industry itself.

Cullen said regional meetings should be convened and academia and the industry should start a dialogue addressing specific industry needs.

“We also need to strengthen the connections between four-year universities and community colleges,” she said. “Community colleges often provide training and they’re good at that. We also found that community colleges can be much more nimble as far as adding classes. They can put a class online in a few weeks whereas a university could not.”

Cullen also mentioned a benefit from community college and industry collaboration is a pipeline for graduates to remain and work locally in the oil and gas industry.

U.S. Representative Pete Olson, one of the panelists at UH Energy’s symposium, mentioned some community colleges in his district that were getting it right with collaborations within the oil and gas industry: San Jacinto Community College in Pasadena, TX and Alvin Community College in Pearland, TX. He praised both for offering valuable job training.

“A partnership that’s doing a great job of this is Clear Creek High School and San Jacinto Community College,” Olson addressed the audience. “I attended a graduation ceremony in which the high school seniors came on stage and received their diploma and then circled back around and received their associate degree at the same time. So, they’re 18 years old and possess the skills for the market right then and there. That’s a great example of schools listening to the needs of employers. We need more of that.”

The Aspen Institute champions investing in community colleges, Colborn said, which is the place where a lot of working people gain their education and serves as the gateway of opportunity into higher education for many people of color.

“I think if you build the right programs there, you’re much more able to build a diverse workforce,” he said. “As labor markets tighten, it will be impossible to let a talented workforce sit on the sidelines.”

Colborn said collaboration between schools and the industry should go beyond curriculum and include engagement in in-depth teaching, mock interviews, internships, job fairs and scholarships.

“Even before someone graduates from a college or program of study, they can do job shadowing or internships, attend industry conferences and engage in projects or initiatives that are linked to real issues the industry is facing,” Colborn told Rigzone. “Schools can invite industry leaders in to speak or lecture, hire adjunct professors from the industry and engage students in ways in which they can be exposed to the world of work. Each interaction leads to closer alignment with what the needs of employers are and what the school is providing.”

Similar to the Clear Creek High School and San Jacinto Community College partnership, Colborn said he sees programs that meet the needs of employers and provide skills so that students can be ready to work on day one.  

“By and large, when we work with programs that are beginning these employer partnerships, we find professors who are excited about being connected to the industry,” Colborn said. “We find students who find much more meaning programs connected to the world of work. We see a lot of opportunities and excitement.”  

In recent years, several business schools, such as Duke University’s Fuqua School of Business and University of British Columbia’s Sauder School of Business, have added programs with an energy focus.

“Using a base of knowledge and abilities, such as an MBA or an associate degree and looking at a finishing plan that is highly specific to a particular industry, such as an energy focus, I believe is a strategy or approach that has the opportunity to give students a wide array of options to consider in the labor market,” Colborn said. “If employers want to be employers of choice, they should work with educators and workforce development organizations and offer career and work opportunities to keep people with the company. It’s clear the oil and gas companies get it. They are seeking these partnerships and continuing opportunities for education and training.”  


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.

James  |  October 26, 2015
HR in the oil and gas industry is a joke when it comes to entry-level careers. I have literally BSed my way through many interviews and got offers. Lucky for my company, I actually knew my stuff and contributed quickly in the field. But, it could have been the other way around. They have no assessment (real-world and science-based questions given to them by oil and gas engineers, etc.) to filter out the idiots who cheated through college, learned nothing and could offer nothing to their company. Many companies continue to hire incompetence based solely on GPA when they have no clue to how that number was obtained. There is no talent shortage, theres always talented people out there. HR for oil companies just dont believe in testing candidates for engineering skills because they dont have these skills themselves. The only gap is between HR and actual engineers. Personality and persuasion is great but when stuff hits the fan, you want real technical people working in your company not a funny guy who cheated on projects through college. Im glad to be working for a company who hires on whether the new graduates actually learned the field in college. But, other big companies just dont get see the big picture. High GPA doesnt even mean book-smarts anymore and certainly not real-world ability. You have no clue what youre getting these days.
Pete  |  April 20, 2015
Theyd better think about not sacking personnel before thinking of shortage in skills!!!!!!!!Thats common sense. A Norwegian Minister said that the companies are doing the same mistake than in the 90s (firing ppl)and then companies start winging they could not find any skilled cause all the good guys went somewhere else where there are less idiots.
SB  |  April 20, 2015
I am a 13 year veteran of this industry in his late 30s. I endure the last downturn and decided to hang around after the bust from the financial crisis that hit our country in 2008. This great shortage is really due to a lack of perceived upward mobility. I have extensive experience at the ground level and have managed some large exploration projects. I hate to say this but the people who gripe about this are the same people who wont give those of us who hang around a chance to take over. They (being the old timers = baby boomers) have decided to keep the plum positions for themselves (i.e bonuses, stock options, etc). Maybe I would like to be the manager one day. Kind of hard to train the next group of people when they are the same age as your kids. You dont relate to them and often I can hear some contempt and condescending tones in meetings. Of course so and so doesnt know how to do something because they dont get the chance to do it. It may be time to force retire some people because they just dont get it anymore. Too busy worrying about paying for their kids college, wedding, retirement account, house remodeling, etc instead of mentoring the people they gripe about. SMH!!!
ellis  |  April 20, 2015
Half the US rigs drilling HZ oil wells are shut down. Schlumberger laid off 9,000 Jan and now another 11,000. Those are the poster boy numbers in the industry. Yet here is an article in the WSJ, a couple days after, throwing out the round number, of 100,000 lost jobs around the world in the industry. Mostly service side and drilling related Cos, as per Graves and Co. the Houston consulting firm. The cuts will continue well into 2016 as oil futures show $60 a bbl a year out. Saudi this past month ramped up another 500,000 bbls/day. Thats half of Bakken production (which took 4+ years to accomplish 1 million a day). Our last crash was in 2009. Then another 2014 in the 4th quarter. The cycles are so rash. I have yet to see an oil Company keep all of its employees thru a downturn. Companies of significance have share holders to report to, and that is the biggest problem. The Bottom Line. How do you protect the bottom line? Fire everybody in sight and protect your own job. A sad mentality, but it has permeated the Oil Industry, many downturns ago. The Oil Industry is always in the Training Mode .....until its time to fire the most recent batch of Boom Engineers And as stuff roles down hill.....the Service Sector and the Drilling Rigs Personnel, get decimated. The Oil Patch is more of a supplementary job to a Farming Operation that you have, to fall back on. Big pay, averaged out over downturns, is pretty average pay. Dont expect the Oil Co to more than just window dress the problem Window dressing, is synonymous with the price is right.
Chris  |  April 20, 2015
If the companies were truly worried about hiring and keeping skilled personnel, we wouldnt be reading several reports ever week on how many thousands of personnel whose employment they are terminating. In the mid 1980s, we saw the industry dump over 500,000 employees, many of whom never returned to work in the industry. In the late 1990s, we saw similar reductions in personnel. We saw the results of these workforce reductions in enrollment numbers in industry related majors at the universities. It took several years for enrollment to recover the downturn in the 1980s. If you review experience levels in the industry, you find gaps that correlate to minimal enrollment and hiring of graduates during these periods. Unfortunately, a new hire directly following graduation has minimal experience. They cant replace the person who had 15, 20, 25+ years of experience who was RIFed. Skilled employees are viewed as a business expense that is quickly reduced. But, that is false economy. Personnel are a minor expense compared with other major components of project costs. Until this type of thinking changes, the industry will always face a lack of skilled personnel.
Terri  |  April 20, 2015
Chad has it about right. With 30 years in the business Ive been through a number of these layoff cycles. There are skilled people out there who have just grown tired of being jerked around. During these down times if any hiring is done its the young guns who come in with plenty of ego only to show themselves as one dimensional. Those willing to get in the field and learn about other disciplines will be fine in the long run. Dont wait to be trained....go after every opportunity you see and find mentors and you will get training. In the meantime, Im on the street and looking, again.
Duncan Clark  |  April 19, 2015
Great article
Randy Pearson  |  April 18, 2015
I have been saying this for years. Young people would be better prepared with a on job training session, at a vo tech or do an apprenticeship with a prospective employer. That piece of paper from the college is just that to a lot of oilfield jobs. They need actual experience and employers are shorting themselves thinking when they hire that college grad/piece of paper that are filling a need when in fact they have someone who is not at all qualified.
Arthur  |  April 18, 2015
This is all a joke. They can hire smart and valuable graduates and early career candidates like us, put us through a short training program and all problems with skills shortages will be solved. The oil companies do not want to invest in training new employees and it may come back to hunt them in the future.
Nor Azlan Nordin  |  April 17, 2015
Petroleum and Natural Gas Engineers are the dying breeds!
Chad  |  April 17, 2015
Perhaps they should look in the mirror. Every time there is a slump in oil prices, the operators use it as an excuse to lay people off and cut spending. In turn, the service companies and suppliers do the same. All of a sudden a lot of experience is gone, never to return. Or if they do return, its to a different company, the trust in the former no longer being there. This industry, while filled with very smart people, is stupid in general. Instead of focusing on long term financial sustainability, they focus on short term. At the first sign of a drop in oil prices the operators squeeze the suppliers and in turn, the suppliers stick it to the operators at the next up tick in oil prices. I have personally spoken to several service providers who are just licking their chops to stick it to the O&G companies at the next opportunity. Its a never ending cycle. And a lot of guys/gals who have gone through numerous layoffs, in spite of doing their job, get tired of it and move on into other fields.

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