Precise takes a look at a recent report from KPMG detailing the lack of talent in the energy sphere.
The US shale oil boom likes to create trouble. Yes, it’s doing a tremendous job in terms of delivering ridiculous amounts of product, but that’s not only leading to an incredible drop in the price of oil but also speeding up another nail-biting dilemma – the lack of people to fill the workforce.
In a recent publication KPMG said “Talent will soon be in short supply… it has finally reached crisis-level.” Rigzone reported last year that by the end of 2015, more than half of the current industry workforce will be eligible to retire. The problem is in that same time frame, employment from the US shale oil industry is expected to double, to 2.5 million jobs.
The industry’s concerns are clear once you look at who will take up those positions. The downturn in the 80s and 90s saw a decrease in the numbers of petroleum engineers enter the workforce and now there are fears of a skills gap as technical specialists and senior managers enjoy the warm embrace of a well deserved retirement, leaving potentially inadequately skilled workers to rise rapidly through the ranks to replace them. Swift promotion is one of the carrots being offered by firms desperate for staff to plug the gaps. The gift of youth is that the youngest workers surveyed were the least likely to be worried about the departing skill sets; it was those who are current and future industry leaders and know what is about to be lost who believe this poses a real danger.
And that concern is justified. Energy projects worth around $100 billion could be at risk because of an inability to place people with the right levels of skills and talent. KMPG principal Angie Gildea warned that there are simply not enough STEM-disciplined graduates in the US each year. “For example, about 1,500 petroleum engineers graduate in the United States compared with about 10,000 in China.”
A shortage of staff has led to an increase in poaching between competitors. While it can be good for the worker – at least in the short term with increasing pay packets – it can cause absolute chaos in the work place. KPMG says it is the number one attrition and recruiting risk. Not only does it lead to bad feeling but projects can be delayed and knowledge sharing decreases. And in case you’re still smiling from the thought of enhanced wages, KPMG says the inability to keep up with salary rises is the third highest attrition risk.
So what can be done about this so-called ‘War for Talent’? Getting people into the market is an obvious way to get started. Increasing the number of programs offered by universities and colleges is the first step – then making that industry as forward thinking as possible in terms of technological advances is the way to develop a digitally savvy and engaged workforce.
KPMG also wants the industry to be proactive about the looming problem of valuable skills walking out the door with the retiring worker. Yes, innovations in technology are crucial and are embraced largely by the younger workers but without a doubt there are numerous skills which can only be attained through years of experience. The report says identifying what they are and then ensuring they are passed on must be done before it’s too late.
Finally, KPMG highlighted what we feel is the most valuable way to address the problem of not only the skills shortage but also retention and recruitment : to improve employee/employer relations specifically through better communication and connection. It seems so simple yet it’s so rarely done. Even though this came in at second on the risk meter, the report revealed that the “level of energy by energy companies to develop solutions to enhance employee and leadership engagement, improve knowledge sharing and implement organisation-wide talent management strategies are receiving significantly lower investment than capability-building activities.”
Those of you who are placed by Precise Consultants will know one of our foundations is to provide a personal service and that’s why we’re growing so strongly. We aim to understand the needs and wants of our clients so that when we place someone we believe it will have a successful outcome for both sides. If you build a relationship between parties that is mutually beneficial, it will not only prosper but it will last. We’re proving that correct on a daily basis through our retention of quality personnel and feedback from our clients who appreciate our approach of understanding their requirements in detail before we begin to select candidates for their projects.