Personnel issues are looming large for geophysical
contractors.
With every down cycle in the petroleum industry,
geophysical providers face the challenge of re-staffing -- and this
time it may be more difficult than ever before.
“Today we are still 25 to 30 percent below our high
employment figure, up slightly from the trough when we were down
about 35 percent of our work force,” said Scott Smith, corporate
vice president of human resources with Veritas DGC.
While most companies lost staff during this most
recent slump, each company took the hit in different areas. CGG
Americas, for example, felt the impact in its processing operations
mainly in Europe.
“The downturn was pronounced and it forced us to
look at our cost structure,” said Jonathan Miller, president of
CGG. “The downturn was not uniform around the globe, however, and
we were more severely impacted in Europe where the market fell off
more rapidly, particularly in the North Sea and some of the African
arenas.
“Processing is a very people-intensive part of our
business, so it took the biggest hit,” he added, “although the impact
was felt across the board.”
Smith said Veritas saw the most dramatic decline
in its land crews.
“When work commitments disappear, the crews are reduced,”
Smith said. “However, the processing, exploration and technological
areas of our company actually grew in this down cycle.
“Due to the mega-mergers of some of the E&Ps
there was an impressive pool of talent available to us, and we took
advantage of it,” he continued. “We’ve added an entire division
of 40 to 50 highly technical explorationists in the last two years,
including geophysicists with reservoir knowledge, interpretation
knowledge and other specialties.
“We continue to collaborate with our contractors
on the interpretation and reservoir modeling front,” he said. “This
is an opportunity for us, and we have positioned ourselves to meet
the need.”
Wanted: Experienced Crews
Getting business back on a steady footing requires
experience, and experience is one of the intangibles that are, unfortunately,
in too short of supply today for many contractors.
“As the cycle turns back up there never seems to
be enough experienced people to manage all the activities you have
on your plate,” Smith said. “We get spread pretty thin on experience.
“Experienced personnel bare the brunt of hiring and
training new workers and less experienced employees,” Smith said.
“The good news is that once we get through this difficult phase
we do have a whole new generation of experienced people. Under the
time constraints we are faced with during these upswings in activity,
people can get five years of experience in two years.”
Miller said one of the challenges facing CGG is finding
demographic balance in the work force.
“Like many of the major oil companies today, some
seismic contractors have too big an experience imbalance in their
employee population,” he said. “For the health of any business you
need to have balance of experience levels, so that is an issue we
will be addressing.”
He used some of CGG’s land crews to illustrate this
point.
“We found we had some land crews that were tremendously
productive, and we studied those to see why,” Miller explained.
“We found that these productive, dynamic land crews had a mixture
of very experienced party chiefs and new hires who were coming on
board with energy, eagerness and new ideas.
“That magical mixture of the two groups resulted
in the ideal set-up, and we want to duplicate that throughout the
company.”
Recruiting Prizes
To meet that goal, recruiting is an important issue
for CGG and other geophysical contractors.
“We need to recruit highly qualified people who can
benefit from the guidance and experience of our personnel,” said
Peggy Moore, human resources manager with CGG. “We are now actively
going back to universities and recruiting graduates.
“Certainly, the industry cycles over the last 15
years have impacted student numbers and we are not getting as many
calls and resumes as we have in the past,” Moore said, “so it’s
up to us to get out and find the right people.”
“One of the realities today,” Miller added, “is that
there is a much smaller pool of highly qualified young people from
which to choose, and we are competing with not only other geophysical
contractors, but oil companies as well. So we have to find different
ways to tackle this issue.”
For instance, his company has expanded its focus
and is looking at a wider variety of nationalities.
“We have identified talented people in other countries
where we traditionally have not recruited in the past,” he said.
Veritas focuses its recruiting efforts on a few key
schools that have graduates in the pertinent disciplines - and those
schools can change over time. And Smith agrees that companies must
expand their search to other countries.
Veritas recruits in every country where the firm
has a processing center. The company currently has about 20 entry-level
positions for processing geophysicists around the world, and 10
openings for more experienced processing geophysicists.
“We do recruit around the world and we consider geophysicists,
physicists and math majors,” Smith said. “We realize we are competing
with other segments of our own industry as well as other industries
for these people.
“Geophysicists have the option of going with major
oil companies or any seismic contractor,” he continued. “Math and
physics majors are highly sought after by a multitude of industries
like technology and teaching, just to name a couple. That makes
it tough.”
Both Smith and Miller agreed that it’s important
for geophysical companies to continue recruiting even during the
down cycles.
“We’ve figured out that you can’t take a year off
from recruiting entry level talent,” Smith said. “It’s just too
hard to start up again. Plus, it helps your reputation with universities
if you remain stable and you can get priority on those campuses.
“So, we never completely stop recruiting,” he continued,
“it’s just the number of recruits that varies.”
Developing Expertise
Once those recruits are hired, training becomes the
next important task for contractors.
“We like to move our young people around so they
can receive exposure and initial training in a wide variety of positions
and responsibilities within the company,” Miller said. “That way
they develop competencies across our product line.
“Plus, employees want that training, they want to
continue to expand their expertise and they are not as patient in
their career development as older age groups were,” Miller added.
“Conversely, they challenge their managers and supervisors to be
the best they can be.”
Smith said his company offers “soft skills, as well
as technical training.
“We require our employees to take 45 hours of training
a year,” he added, “60 percent in technical areas and 40 percent
in soft skills such as how to do effective presentations, interpersonal
skills and customer relations.”
Of course, it’s not just technical employee needs
that pose a challenge for geophysical contractors. Unskilled labor
can be trained relatively quickly, but that labor pool also has
more choices today than ever before, making it difficult to find
the best possible employees.
“Today there are a lot of competing businesses for
a shrinking unskilled labor pool,” Smith said. “They can go to work
for Wal-Mart or any number of places and it’s easier work than life
on a field crew. I’ve found people are less inclined to do this
kind of hard work.”
Indeed, Smith said it is “a challenge to find people
who like to work outdoors, like to be away from home for extended
periods and like difficult, rugged work. We find ways to get it
done, but it is definitely more difficult than it used to be --
and it gets more difficult with every cycle in this industry.
“With competition from other industries people are
leaving the oil business and not coming back.”
And, if the pay doesn’t reflect the risk-work-reward
factors, who can blame them for not returning? According to the
U.S. Department of Labor, this is a problem shared by a number of
industries--from construction to manufacturing. The competition
for these workers is expected to intensify.
‘Pay A Concern’
One big wildcard in the geophysical industry today
is the recent merger of Western Geophysical and Geco-Prakla.
“It’s too early to tell if there will be much personnel
fallout from that merger, but I’ve been surprised at the few number
of people that have become available due to this deal,” Miller observed.
“You have to respect your competitors, and I think Western-Geco
has done a good job of protecting its key employees.”
With the challenges in recruiting and retaining employees,
pay is an ongoing concern for geophysical contractors.
“As in every previous up cycle, salaries are going
up from the bottom to the top in our businesses,” Smith said. “Most
employees have a lot more options than they used to. More and more
industries seem willing to take technical personnel and teach them
the ways of their industry. That’s always been true of support services,
but for the first time we are seeing that same trend on the technical
side.
“We now view all our employees as people with options
and we need to be more creative in how we compensate them,” he continued.
“You have to be a lot more open to doing whatever it takes to attract
and keep your technical staff.”
In addition to salary, that includes training, global
opportunities, a compatible company culture and technology.
“In our business it’s often the quality of people
you associate with and the cutting edge technology that attracts
people,” Smith said. “We really are a people-intensive business,
so if we don’t manage well in the down cycle it definitely constrains
us in the up cycle.
“We try to maintain our level of experienced people
across the company during the difficult times,” he added, “because
we know those people are our best weapon when things get better.”