Manpower? It's a Western Problem

Lots of Students in Pacific Rim

There's been considerable hand-wringing over the graying work force in the oil and gas industry.

What's gone unnoticed for the most part, however, is that this is largely an American phenomenon.

Indeed, the average age of industry professionals in the United States is higher than the rest of the Western world — and much higher than the developing countries.

This was one of a slew of findings revealed in a recent forum held by Worldwide Worker in Houston. The organization, which is dedicated to providing professional staff to the oil and gas industry, presented the results of its second annual recruiting trends to an audience of 51 attendees from 36 companies involved not only in E&P but also E&C (engineering and construction).

Data acquired during the survey revealed a greater gap and deficit in available professionals in E&P than E&C. In fact, E&C harbors a possible talent pool to pull from for E&P engineering jobs, which could be filled by such people as facilities and design-type engineers, according to Mauricio Arce, business manager at Worldwide Worker.

A look at the top 10 most demanded E&P positions, however, indicates this is but one small part of any potential solution to the personnel problems facing the mature domestic segment of the industry, where infrastructure builder demand is low and exploration demand high.

"Of the top 10 most needed E&P jobs in North America," Arce, said, "the top five consists of reservoir and petroleum engineers, geologists and geophysicists and drilling engineers."

In an industry where the declining knowledge base is colliding head-on with more complex drilling requirements, there are some specific requirements in terms of experience. The most desirable candidates in the United States are those with three to six years or six to 10 years, Arce said, noting that these demographics aren't clustered on domestic soil.

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There's been considerable hand-wringing over the graying work force in the oil and gas industry.

What's gone unnoticed for the most part, however, is that this is largely an American phenomenon.

Indeed, the average age of industry professionals in the United States is higher than the rest of the Western world — and much higher than the developing countries.

This was one of a slew of findings revealed in a recent forum held by Worldwide Worker in Houston. The organization, which is dedicated to providing professional staff to the oil and gas industry, presented the results of its second annual recruiting trends to an audience of 51 attendees from 36 companies involved not only in E&P but also E&C (engineering and construction).

Data acquired during the survey revealed a greater gap and deficit in available professionals in E&P than E&C. In fact, E&C harbors a possible talent pool to pull from for E&P engineering jobs, which could be filled by such people as facilities and design-type engineers, according to Mauricio Arce, business manager at Worldwide Worker.

A look at the top 10 most demanded E&P positions, however, indicates this is but one small part of any potential solution to the personnel problems facing the mature domestic segment of the industry, where infrastructure builder demand is low and exploration demand high.

"Of the top 10 most needed E&P jobs in North America," Arce, said, "the top five consists of reservoir and petroleum engineers, geologists and geophysicists and drilling engineers."

In an industry where the declining knowledge base is colliding head-on with more complex drilling requirements, there are some specific requirements in terms of experience. The most desirable candidates in the United States are those with three to six years or six to 10 years, Arce said, noting that these demographics aren't clustered on domestic soil.

To tap into this experience range, companies might have to increasingly look to the Eastern Hemisphere and Third World countries, where there are more available candidates at the three- to five-year and six- to 10-year experience levels, according to Arce.

"This is a very sobering statistic, especially for those companies hiring only from Western backgrounds or Western universities," he said, "as well as for those looking to hire in those years of experience but not willing to sponsor visas. Because it's so difficult to find top talent in these brackets, the companies are either filling positions with people having more years of experience or not filling them at all."

Rather than training professionals to step up to the plate to replace soon-to-retire workers in a structured succession planning program, companies without training programs opt to poach from their competitors who may have traditional in-house training, thus creating a vicious cycle.

Third World Factors

The recent survey undertaken by Worldwide Worker concluded the industry needs to provide more exciting jobs and opportunities to the "under 30" or less experienced people to help solve the demographic problem.

Salary trends revealed by the survey showed downstream salaries to be constant while salaries are on the increase for upstream positions. Because of the hire-and-fire culture, staff salaries for experienced hires are moving toward a supply-and-demand mode, much like consultants.

Despite respectable salaries and heightened demand for E&P professionals, there has been no significant influx of students into American universities.

Universities in other parts of the world, however, are pumping out increasing numbers of graduates, particularly in Far East Asia. These future professionals have a whole different agenda spurring them onward, according to Arce.

Western-cultured students for the most part are turned off by the cyclical, unstable nature of the oil and gas industry, he noted, and see it as a lifestyle they find unacceptable.

On the contrary, their peers in developing countries look at the industry and see vast opportunities for the work ethic of a Third World country professional accustomed to working in non-benign, hostile, poor-paying environments.

Their take on the industry is it can provide the chance to enjoy a better lifestyle and to make more money, even though it might be considerably less than their Western counterpart, who may balk at tough tours of duty overseas without significant added financial compensation from an employer.

The Third World hire not only has the education and language skills but also the work ethic to work most anywhere needed.

"Companies are starting to hire Third World country professionals educated in their own country or in Western universities," Arce said, "and this is creating a lot of competition for the Western-cultured student.

"He's sitting next to a Third World student who will take maybe a thousand (dollars) less per month, so the American student decides to go into another industry that's not as global, (meaning) less competition.

"This is what the oil and gas industry and the universities are dealing with," Arce said. "We found this was one of the compelling reasons why the Eastern universities are graduating more engineers and G&G students than in the Western Hemisphere."

In Need of a Bridge

The Worldwide Worker survey revealed some noteworthy statistics about the supply of professionals worldwide by 2008. For instance, the number of white collar oil and gas workers in the Middle East will increase by 6,000 over today and by 12,000 in the FSU. In contrast, there will be a deficit of 14,000 white collar professionals in the United States.

Arce reviewed one of the fundamental problems within the industry as seen from the HR standpoint:

"The argument that a lot of HR people have in the oil and gas industry is that a lot of HR departments have none or little budget," he said, "and little say-so in succession planning, staffing and development.

"Throw that mix in with a diminished talent pool, increasing demand for a range of talent in the three- to five-year and six- to 10-year range and a diminished number of graduates in Western universities, and it's a quagmire."

He noted HR is getting little support on these issues from executive management, which makes decisions affecting staffing solutions based on the economy, consumption and oil and gas demand.

"That's a fundamental problem within companies," Arce said. "HR professionals see where this is headed, but the problem is the executives aren't listening to them.

"There must be a bridge there," he said. "The executives must give more power to HR management to implement the tools and solutions they know will work to solve the problems.

"Companies need to find a way to retain, motivate and train the people they have," Arce said. "If they can't, then they will have to hire more internationals."

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