The Great Crew Change is once again the top long term talent issue cited by oil & gas executives in our annual survey. The recently released Oil & Gas Executive Outlook 2016 details the expectations of over 250 oil & gas executives on a variety of topics such as talent, capital spending, mergers and acquisitions, oil and gas prices, industry segment performance and more. In this article, we highlight the talent portion of the Executive Outlook. To download the entire report, go to www.reinsvold.com.
In the survey, one question we asked the executives was: “What do you see as the most significant talent-related challenges your industry segment will face over the next 5 years and beyond? (Choose the top 3)”. Their responses are summarized in the chart below. For comparison, the results from a similar study conducted one year ago are also included.
We can see that the top issue, cited by more than half of the executives, is the Great Crew Change that will take place over the coming years. It is common knowledge that an unusual age distribution exists in oil & gas due to the boom-bust cycle several decades ago. Boom times tend to attract younger talent while bust periods tend to discourage new entrants. The result is a current industry age distribution with a significant number of employees older than 55 or younger than 35, but a relatively low number between 35 and 55 years old. As the older employees retire over the coming years, many executives are concerned as to how this loss of experience and knowledge will affect the industry and their companies.
One issue that jumped to #2 on this year’s survey is the industry’s attractiveness to new entrants. Last year this was ranked #6 among all the long term talent issues. Unfortunately, the current bust cycle will probably cause today’s high school and college students to think twice before considering a career in oil & gas. If the current bust lasts long enough to discourage a significant number of new younger employees from joining oil & gas; you can expect to see the Great Crew Change version 2.0 unfolding thirty years from now.
Two other significant shifts from last year’s Executive Outlook are in the areas of technical talent (engineers, geologists, etc.) and skilled field technicians or craft employees (frack crews, rig hands, etc.). Both of these long term issues dropped in significance when compared to the survey from one year ago. For the most part, fear of longer-term personnel shortages in these areas seems to have evaporated.
For another view of the 2016 data, see the chart below. In this chart, the survey responses were aggregated into two groups: 1) oil & gas companies, and 2) suppliers to those oil & gas companies. You can see that the executives from oil & gas companies (E&P companies, majors, NOCs) and the executives from their suppliers (oilfield service companies, drilling contractors, etc.) rank many of the long term talent issues differently.
The entire Oil & Gas Executive Outlook 2016 can be downloaded at www.reinsvold.com
Chris Reinsvold has over 25 years of strategic consulting, executive search and management experience. He helps his industrial, oil, gas and energy sector clients develop strategies and build leadership teams in the board room, C-suite and senior executive management.