Taking a Balanced Approach to the Technical Skills Gap
Authors: Kirst Joy Brown 
Published: February 2015

Talent & Technology

One could compile an extensive bibliography written about the “big crew change” over the past several years. The short story is that although the human resource “emergency” that the oil and gas industry has decried during the past decade has slowed, it has not disappeared but merely been delayed. The industry continues to face a shortage of skilled workers in the 10 to 20 years of experience category, which is affecting the staffing of midlevel management jobs and, subsequently, senior level management positions.

Estimates show a net outflow of 5,500 people at the petrotechnical professional level in the oil and gas industry. The immediate ramifications of this decline in experienced human capital will be heavy recruitment of staff from competitors, which will continue to drive salaries higher. With the cost of a barrel of both West Texas Intermediate and Brent crude still around USD 100/bbl, projects will continue to be economic, thus increasing the need for experienced hires. But the 5,500-person net outflow says that companies may be unable to properly staff these projects, which could result in delays or the possibility of less experienced staff running them, with potentially risky outcomes in safety and downtime. All of these factors increase costs for oil producers.

However, quantity is not the only risk; quality (i.e., real-world experience) is also a factor. Could the overpromotion of less experienced professionals put projects at risk for safety and downtime problems? Many projects are only as good as the individual managing them. Project leaders must focus on the proper balance of the quality of work, timing, supply of equipment and people, safety, and the bottom-line profitability for all parties to be satisfied. These are all strong management and leadership skills that can be found in other industries, which have devised and implemented best practices. If the proper general manager of a project is selected, he will surround himself with technical experts, thus allowing a focus on the core skills and abilities that he brings to the company, rather than strictly the technical knowledge of the project. This opens up the industry to looking at midcareer leaders in the heavy industrial and civil construction industry, mining industry, or even the military.

Effect on Senior Management

So what do these midlevel staffing issues mean in the long term? For starters, the industry will have a smaller pool of talent to choose from when looking at senior management succession planning. There could also be the real possibility that there are no qualified employees from which to choose within a company. This may cause the company to look outside for talent, which could lead to higher wages, higher turnover due to competitors poaching from one another, and increasing one-time costs attributable to new hires.

If we do not fill the gap, we run the risk of perpetuating the problem from which the industry currently suffers. When those at the top retire, the pool of talent to choose from within the industry will be considerably younger. When this younger crop of talent is appointed to top positions, they will naturally remain in those roles for a longer period of time, making those behind them wait longer to rise to executive roles. For some high-potential midlevel management individuals to reach the top, they may consider leaving the industry to see their career aspirations come to fruition.