Technical Talent Shortage Could Begin to Limit Growth

Abstract

Talent & Technology How do you transition an industry from conservative and slow moving in terms of human resources (HR) strategy to proactive, responsive, and ready to take risk? This is the quandary facing exploration and production (E&P) companies at a time when a “big crew change” is under way. The industry will see a serious shortfall of experienced technical professionals from attrition in the coming five years when the call on technical expertise will be greater. An increasingly stringent post-Macondo regulatory environment and new frontier and unconventional oil and gas plays will leave companies struggling to maintain current operations and drive growth. Schlumberger Business Consulting’s (SBC) annual Oil & Gas HR Benchmark survey provides information on trends involving petrotechnical professionals, namely geoscientists and petroleum engineers. Compiled from the responses of oil and gas companies and universities, the study has become a reference point for E&P executives seeking to understand industry trends and develop HR strategies that provide a competitive edge and sustainable business performance. The survey highlights best practices and gives insights into an often misunderstood and underestimated element of the global oil and gas industry: talent requirement. The 2010 survey shed light on two important facts for the industry’s supply chain of talent: the demographic transition or “big crew change” is now taking place, and technical talent has become a true strategic enabler for delivering production and future growth. Demographic Transition More than 25% of petrotechnicals currently working for E&P companies are older than 50 years of age and the vast majority will retire in the next five years. This is the generation of professionals who joined the industry during the late 1970s and early 1980s at the peak of the oil and gas expansion cycle. The crisis of 1986 marked the brutal end of that expansion and the beginning of a long period of anemic recruitment that lasted nearly two decades and created an irreversible void in the ranks of today’s midcareer professionals. The vigorous upcycle of 2003 to 2008 has provoked a rapid and important uptick in graduate recruitment (a three-fold increase). This has finished shaping the sector’s demographic profile with its recognizable double-hump of young and senior petrotechnicals surrounding a gap of midcareer professionals (Fig. 1).