A retirement wave and technical skills gap threaten Oil and Gas company growth and profits

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A retirement wave and technical skills gap threaten Oil and Gas company growth and profits

  • 06-May-2014
  • Canada, Toronto

A retirement wave and technical skills gap threaten Oil and Gas company growth and profits, according to Mercer survey 

 

  • 81% of Canadian organizations surveyed cited ”technical skills gap” as a critical problem
  • Industry cannot “poach” its way out of the talent shortage
  • New ways of building, recruiting and developing necessary talent required
  • Workforce analysis and planning needed to manage industry growth opportunities

 

The world’s oil and gas industry is in the midst of a talent crisis and needs to find alternatives to poaching from competitors, according to Mercer’s Energy Consulting practice. The increasing demand for workers is exacerbated by an underfed recruiting pipeline and the retirement of older, more experienced workers.

To address this global energy talent crisis the just-released Mercer Global Oil and Gas Talent Outlook and Workforce Practices Survey shows that approximately two-thirds of oil and gas companies intend to fill the void by “buying” talent from outside their organizations, and nearly 50% of these same employers intend to use “poaching” from competitors as their predominant source for new talent (see Figures 1 and 2). This dynamic arises at a time of unprecedented opportunities that can only be capitalized on with a sufficiently productive, engaged and increasingly global workforce. Unaddressed, this talent shortage will threaten individual company growth and profitability.

The Mercer Global Oil and Gas Talent Outlook and Workforce Practices Survey collected input from more than 120 companies representing over one million employees across 50 countries. To learn more visit www.mercer.com/energy.

“The widely-embraced strategy in the oil and gas industry of ‘poaching from the competition’ is simply not viable or sustainable,” said Graham Dodd, Energy and Natural Resources Sector Leader, Mercer. “A more strategic approach to both talent acquisition and workforce management that focuses on innovation and execution is required for those oil and gas industry members who hope to become leaders and separate themselves from the competition.”

While the looming retirement wave is of primary concern to oil and gas industry employers, the Mercer survey also reveals other critical talent issues faced by oil and gas employers throughout the world, such as:

  • 81% of Canadian organizations surveyed cited ”technical skills gap” as a critical problem, but leadership, management and supervisor skills were also noted as being in short supply (see Figure 3)
  • The oil and gas industry will add more than 530,000 positions in core professional and technical jobs over the next five years and  more than 1.1 million over the next 10 years, yet over half of the world’s largest oil and gas producing countries will not have an adequate supply of talent to meet this demand
  • Among the 56% of companies who say they have a workforce-planning process that identifies gaps, only 27% say that process also provides solutions to close gaps

 

In its efforts to enable oil and gas industry-clients to successfully address these talent and workforce challenges, Mercer advocates a  talent sourcing and  development  strategy that aims to build an adequate supply of required talent, enhance the skills and capabilities of the company’s existing workforce, engage staff and foster commitment and loyalty. These programs must also address the need to manage cost and risk exposure.

“The tendency to simply ‘benchmark’ will not be enough,” said Mr. Dodd. “Oil and gas HR leaders need to lead the way in conducting a deep examination of their own workforces, understanding labor trends in key markets, forecasting talent and skill needs and most importantly building a customized plan of action that will address their very specific talent gaps and opportunities.”

The good news for oil and gas employers is that addressing these issues brings with it the expectation of favorable return on investment. In fact, large numbers of employers saw strong ROI potential in increased employee productivity, decreased attrition, increased production and decreased operating expenses (see Figure 4).

“We believe oil and gas companies will need to find more innovative and creative ways to fill the talent pipeline, long- and short-term, in order to create a true competitive advantage. One way Mercer is helping clients drive this innovation is a soon-to-be-launched pilot program that will offer companies a more efficient and effective way expand the global oil and gas talent pool by using such techniques as ‘gamification’ to pre-qualify talent,” said Mr. Dodd.

About Mercer’s Energy consulting practice

Mercer enables organizations in the oil and gas industry to outpace the competition by enhancing and protecting the health, wealth and performance of the global workforce through a combination of expert resources globally, regionally and locally with unequalled global oil & gas workforce data and insights; and cross-industry adaptive innovation. To learn more, please visitwww.mercer.com/energy.

About Mercer

Mercer is a global consulting leader in talent, health, retirement and investments. Mercer helps clients around the world advance the health, wealth and performance of their most vital asset – their people. Mercer’s 20,000 employees are based in more than 40 countries. Mercer is a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), a global team of professional services companies offering clients advice and solutions in the areas of risk, strategy and human capital. With 53,000 employees worldwide and annual revenue exceeding $11 billion, Marsh & McLennan Companies is also the parent company of Marsh, a global leader in insurance broking and risk management; Guy Carpenter, a global leader in providing risk and reinsurance intermediary services; and Oliver Wyman, a global leader in management consulting.

For more information, visit www.mercer.ca

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