Booz Allen Hamilton: Labour and Skills Crisis Could Stall Oil and Gas Boom
The oil and gas industry has stretched its resources to the breaking point with the real potential of stalling the oil and gas boom that is currently occurring. From the industrial platforms of oil rigs to air-conditioned design offices, the oil and gas industry is confronted with a shortage of brawn and brains so severe that it threatens to stall exploration and production growth around the world.
“The importance of the oil industry to Middle East economies cannot be underestimated,” said Karim Sabbagh, Head of Marketing of Booz Allen Hamilton Middle East. “The oil and gas industry in this region cannot afford to be stunted by something as basic as acquiring a competent workforce. This is a problem that can have considerable consequences to this region.”
The talent challenge is not new. At the end of the eighties, skills shortages in the North Sea oil and gas industry hit the headlines, the close of the nineties saw major lay-offs particularly in the US, but it is over the last 12 to 18 months that a confluence of events, including oil prices, planned investments and industry demographics have stretched industry resources globally to breaking point.
At present, the average employee working for a major operator or service company is 46 to 49 years old according to the Interstate Oil and Gas Compact Commission (IOGCC) in the United States. The average retirement age for the industry is 55 years. It is because of this that the problem the industry faces is immense. There threatens to be a global “brain drain” of talent, as thousands of oil and gas engineers and employees retire.
In new investment hot-spots, such as Canada and Qatar, some companies are looking to buy their way out of the crisis, notably poaching qualified staff from other firms.
What can be done?
It is incumbent on management teams to think carefully about the business implications of skills shortages and how best to react. This is no longer an isolated “people issue” but presents a strategic business challenge requiring joint ownership between technical, operating, and HR leaders. Companies need to take a fresh look at resourcing over a longer time horizon than they have previously cared to use.
Added Ren Stephan, leading Marketing for the Energy Practice of Booz Allen Hamilton, “There is no option but to see this strategic challenge as a top three priority to ensure a company’s health and in some cases its survival.”
Management teams need to recognise and acknowledge the inter-dependence of the methods used to build human resources capability. Companies must recruit against business needs, resource individuals to balance personal and business needs, develop individual skills and retain valuable workers. All of these different aspects must be pursued simultaneously or else the result will be only short term respite for a company. Leaders must step up and role model desired behaviours, actively demonstrating ownership of the capability building agenda.
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About Booz Allen Hamilton
Booz Allen Hamilton has been at the forefront of management consulting for businesses and governments for 90 years. Booz Allen, a global strategy and technology consulting firm, works with clients to deliver results that endure.
With more than 16,000 employees on six continents, the firm generates annual sales of $3 billion. Booz Allen provides services in strategy, organization, operations, systems, and technology to the world’s leading corporations, government and other public agencies, emerging growth companies, and institutions.
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