The oil and gas industry faces an impending and unprecedented labor gap that requires both short-term and long-term action by leaders. This paper examines the history and root causes of labor challenges in the industry, generational differences in the workforce, critical roles within oil and gas companies, ways of mitigating the immediate and future risk, and requirements for building and maintaining the workforce to achieve future success.
The volume of baby-boom retirements anticipated between 2011 and 2029 will create a labor scarcity that will impact all industries?none more than the oil and gas industry. Multiple factors are contributing to this situation. Most importantly, the volatility of our industry since the early 1980s has significantly diminished the talent pool, and succession planning has not been a priority. Generational differences within the workforce compound the problem but also offer unique opportunities for the future.
Like the major downturn of the 1980s, the current downturn has forced the industry to relinquish valuable skillsets in the short-term that will be required in the long-term. Moreover, the relatively few skilled workers from the 1980s era that remain to pass on their precious skillsets will be retiring at a rapid rate. The Big Crew Change is coming, and the industry is ill prepared because organizations have largely ignored the succession planning that is critical for future success.
Effective succession planning identifies positions that are critical to organization success and then plans accordingly to address them. In our industry, engineers, geologists, skilled laborers, and experienced executives are especially difficult roles to fill because the demand is high and there are fewer individuals with experience in these areas.
In any organization, the senior management team must drive succession planning, align it with the organizational culture and values, and enforce accountability for it throughout the organization. That may include different business models as well as new ways of making the oil and gas industry more attractive for younger generations who have different values, expectations, objectives, and work styles. New leaders will need to lead rather than direct, be adaptable and look at the world on a global scale, and have a high level of business acumen.