Oil majors facing labour market timebomb
Posted: 9 December 2004
Oil and gas exploration and production companies will lose their competitive advantage over rivals if they fail to address a “demographic time bomb” in the labour market.
An industry-wide study by oil and gas recruitment specialist, Maxwell Drummond International, (MDI) predicts there will be a critical shortage of key upstream engineering personnel aged between 30 and 40 who are crucial to a company’s future prosperity.
And exploration and production firms which are complacent about retaining technical and managerial talent risk losing them to predator rivals who view such staff as a differential within the industry.
The emergence of the new independent entrants to the North Sea will also have an impact in driving the E&P labour market because these firms can often offer high-flyers flexibility, an entrepreneurial culture and superior terms and conditions.
The MDI study, involving more than 100 firms in the UK and USA, highlighted concerns that structural weaknesses in the labour market - a looming demographic time bomb - will mean staff shortages across all disciplines.
Increased international mobility, greater linguistic skills, more cultural awareness and local knowledge, has made the 30-40 age sector workforce highly desirable to global companies who are eager to stay one step ahead of the pack.
MDI, one of the world’s leading independent oil and gas recruitment specialists, carried out the survey to pinpoint new trends and to identify potential problem areas for their clients based in the UK, North America, the Middle East and Asia.
MDI managing director, Andrew MacDonald, said: “Our survey confirms that E&P companies will now have to work harder to retain the best people but in doing so will benefit by creating a tremendous bottom line differential within the industry.
“There is the emergence of a highly fluid international labour market with the most mobile people typically aged between 30 and 40. This group are also the most entrepreneurial and as such are liable to poached by rivals from all geographic locations across all disciplines.”
The survey confirmed well qualified and experienced upstream professionals are in greater demand than ever as technological advances make it possible to develop deep water oil and gas fields and mature and marginal fields which were once cost-prohibitive.
Mr MacDonald explained: “As a result, any E&P professional with skills in the new and emerging deepwater technologies or experience of working in the new ‘frontiers’ will become highly sought after by competitors.
“The situation has also been exacerbated by the rise of independent E&P companies in mature regions such as the North Sea, mainly because these companies often offer flexibility, superior terms and an entrepreneurial culture which gives staff the chance to be more directly connected to the top of the company and to climb up the corporate ladder at an earlier age.”
MDI, which has offices in Aberdeen, London, Houston and Calgary, say E&P firms who rate talented staff as highly as other more traditional business benchmarks will avoid the fall out when the demographic time bomb explodes.
Mr MacDonald said: “Under today’s market conditions recruiting and retaining talented staff in key positions is as strategically important as having more traditional competitive advantages such as having sufficient capital resources or superior technology.
“We are advising our clients not to be complacent about retaining their 30-40 year old technical and managerial talent because if they are, they risk losing their competitive advantage.
“We are also encouraging our clients to spend a lot of time and energy in attracting, developing and retaining super talented staff within the specific groups we have identified because people are now the only true source of competitive advantage.”
About Maxwell Drummond International
Maxwell Drummond International was formed in 1987 in response to the rapidly changing conditions affecting the recruitment of key personnel for the oil and gas industries.
It is one of the world’s leading independent executive search firms which specialise in recruitment exclusively for the oil, gas and petrochemical industries.
The company employs a large team of business development consultants, search consultants and researchers at its Aberdeen headquarters in Rubislaw Place and at offices in London, Houston and Calgary.
For more information see www.maxwell-drummond.com
Posted by Richard Price,
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