“It’s been my experience in 17 years of recruiting in the oil and gas industry [that] this is the ‘sweet spot,'” [Tim] Cook wrote in an email, referring to the 10- to 30-year range. “These are the individuals that companies are wanting to hire, and because of the downturn in the mid-’80s to mid-’90s, this is the missing generation in the oil and gas industry.”
Talent needed! Jobs available! Training required! Students: please major in petroleum engineering. Retirees, we need you back. University of Phoenix–start your oil and gas engines. Staffing professionals–help us please!
This is the good news, the great news, from the energy sector. And it is the reality that President Obama and public-policy makers at all government levels should understand–and heed.
First, some background. Environment & Energy News has a daily subscription service that a lot of us must read each workday: E&E Daily, Greenwire, E&E News PM, and ClimateWire. And most recently, due to marginal resources in the energy world shifting decidedly to oil and gas, E&E News added a new service: EnergyWire.
EnergyWire provides the latest oil and gas developments that those outside of the industry (analysts, lobbyists, lawmakers, pundits, etc.) need to know.
In the June 18th edition was the article: WORKFORCE: Energy Industry Attempts to Weather a ‘Silver Tsunami’ by Pamela King. “Silver Tsunami” means that the industry has an aging workforce that must be replaced by a new generation of oil and gas talent. (MasterResource has previously described the oil/gas worker opportunities and shortage.)
Ms. King begins her article: “After years of decline, the now-booming U.S. petroleum industry is struggling to find new hires to replace an aging workforce.” She then tells the story about how previous industry instability resulted in a talent exodus that must now be replaced:
Fewer students pursued degrees in petroleum engineering as oil prices fell in the mid-1980s. Those numbers are picking up again as companies scale up their work in U.S. shale formations, but experts say the tepid expansion of oil and gas degree programs will not be enough to make up for a generation’s worth of uninterest.
Tim Cook, recruiting manager for Houston’s PathFinder Staffing, said there’s been an uptick in the number of workers with zero to seven years’ experience starting careers in oil and gas. But he said the bulk of the workforce is still people with more than 30 years of experience. People employed in the industry for 10 to 30 years are a much smaller presence.
“It’s been my experience in 17 years of recruiting in the oil and gas industry [that] this is the ‘sweet spot,'” Cook wrote in an email, referring to the 10- to 30-year range. “These are the individuals that companies are wanting to hire, and because of the downturn in the mid-’80s to mid-’90s, this is the missing generation in the oil and gas industry.”
The “silver tsunami” of workers who have been in the business for more than 30 years creates problems for companies. For one thing, when older employees retire, firms are left with just a smattering of young workers and almost no one in between, altering experience levels on project teams and affecting companies’ ability to bid on and win major contracts, Cook said.
Others in the industry second Cook’s assessment:
Anadarko Petroleum Corp. Vice President of Human Resources Julia Struble said her company has prepared a number of approaches to address the age gap, a problem she says cannot be solved with one quick fix.
“I wish there were a silver bullet for the silver tsunami, but there’s not,” she said.
King then reports on what the oil and gas industry is doing about it, very fascinating indeed!
As part of a multipronged approach to maintain robust and knowledgeable staffs, Anadarko and other companies have developed online knowledge transfer programs in which workers can share best practices and lessons learned on completed projects, providing a digital reference for employees who embark on similar work in the future.
Through the use of its ALinks platform, Anadarko is aiming to teach employees in five to seven years what it used to take them 10 years to learn.
In another effort to retain some of the experience of the graying workforce, companies are turning to staffing professionals like Cathy Clonts, president of Houston-based Alumni Web Services Inc., who has been working with oil and gas firms for 12 years to help them bring back retired workers as consultants.
Through its online database, Clonts’ company facilitates networking between retirees and their former employers, allowing companies to hang on to some of the talent they have lost.
Nicole Guiet, head of talent acquisition for Colorado engineering and construction firm CH2M Hill Inc., said the company frequently leans on its retiree population as a source of support.
In order to access their full benefits, many retirees return to the workforce six months to a year after leaving. But recruiter Steven Emshoff said he has recently heard that some companies have such huge needs that they are taking back workers sooner, which could create problems with benefits, depending on companies’ policies.
Hiring back retirees is “the No. 1 way people are dealing with the problem,” said Emshoff, who serves as a senior associate at Houston-based recruiting firm Piper-Morgan Associates.
But retirees will not be around forever, especially as the economy improves and older workers feel more comfortable about shifting into full retirement. Still, companies sometimes act as “their own worst enemies” by refusing to hire students straight out of school, Emshoff said.
“The reason a lot of producers don’t hire [recent graduates] is they’re working their own engineers so hard and for so many hours that they don’t have time to train and mentor” new hires, he said.
They are, however, willing to hire those same people — and pay a premium to do so — once they have three to four years of experience, he said.
Companies should be fighting to hire recent graduates, said Dr. Tasha Eurich, principal and founder of the Eurich Group, a leadership and team-building consultancy. Simply by virtue of population trends, there are far fewer Generation Xers (ages 32 to 47) and millennials (ages 13 to 31) than there are baby boomers (ages 48 to 66).
Oil and gas companies are in especially big trouble because few young people are entering the workforce with petroleum engineering degrees, she said.
“We can’t go back in time and give people more engineering degrees,” Eurich said.
But that hasn’t stopped some groups from trying.
While the oil and gas industry’s future accountants and attorneys will not need energy-specific degrees to work for production companies and the like, aspiring petroleum engineers will.
But for nearly 25 years, there has been a dramatic drop-off in enrollment for these types of programs, and it shows few signs of recovering. At Texas A&M University, one of the nation’s top petroleum engineering schools, about 700 students are enrolled in the department. Although the department had 1,600 students at its peak in the 1980s, Texas A&M has no plans to increase its class beyond 800 (EnergyWire, March 19).
Getting innovative …
In an attempt to amend the matriculation problem, the American Petroleum Institute has partnered with the University of Phoenix to identify community colleges and other schools that have two-year or certificate programs that could be applied to a four-year degree, meaning students with some applicable experience would not have to start from scratch to get a technical degree in oil and gas.
A coalition of Montana community colleges is attempting to build a similar program (EnergyWire, May 9)….
It will take time to get the talent pipeline flowing to support the technological boom in oil and gas. But note how for-profit education (University of Phoenix) is part of the quick-response strategy. That’s neat: For-profit education helping for-profit business–no government required.
As part of this transformation, government policy reform is needed, but toward less rather than more intervention. Government needs to terminate special subsidies to noneconomic energies such as wind, ethanol, and (on-grid) solar to free these resources for oil and gas, pronto.