Business Gas Suppliers Face Skills Shortages

Over the last few years, the U.S. gas industry has entered a boom. New technology has opened up access to natural gas deposits that were previously locked away in shale. Business information company IHS Global Insight produced a report in 2012 that found over 1 million jobs in the U.S. were linked to unconventional gas activity in 2010. This figure will rise to an estimated 1.4 million by 2015. By 2035, it is estimated that employment linked to unconventional gas activity will rise to 2.4 million.

However, this boom follows a decade of slow growth in the 1990s, with consequent redundancies, layoffs, and hiring freezes. The result of this slow period of growth is that there is now a lack of skilled professionals in the 30 to 45 age range within the oil and gas industry. As highly-experienced professionals reach the end of their careers and decide to retire, there is a lack of young, skilled talent to take their place. The phenomenon is of such concern to the oil and gas industry that it has gained a name: the Great Crew Change. Business gas suppliers must address this skills shortage to ensure that they recruit and retain the staff they need to remain competitive.

What is the Great Crew Change?

The Great Crew Change is not one point in time. Rather, it describes a period of a few years when many senior personnel within oil and gas companies will reach the stage in their career where they will decide to retire. In theory, these senior employees should be replaced by younger, less experienced personnel who have the potential to grow in to senior roles.

How Did a Skills Shortage Develop in the Oil and Gas Industry?

Succession planning is vital in any business. Growing and developing a pool of talented employees that will be ready to step up when more experienced colleagues retire ensures a business continued survival. However, during difficult times, companies often scale back their training and development activity in order to save money. In addition, companies may need to make employees redundant if they cannot afford to pay high salary costs.

The oil and gas industry in the U.S. faced challenging times in the 1990s. Countries such as Saudi Arabia flooded the market with cheap oil and gas, making it less economical to produce it within the U.S. than to import it from abroad. However, in the late 1990s and early 2000s, demand for oil and gas in the U.S. began to increase. In addition, new technologies were developed, such as fracking, which allows previously inaccessible natural gas deposits to be harvested on a commercial scale.

Unfortunately, although U.S. oil and gas companies are now hiring again and training younger employees, there is a lost generation in the 30 to 45 age bracket. During the period when demand slowed down, many oil and gas companies introduced hiring freezes, meaning that fewer new employees were introduced to the affected companies. Those employees that were recruited received a more streamlined training program than had previously been offered due to cutbacks and cost-saving measures.

Additionally, many graduates were enticed away from oil and gas positions by nuclear and renewable energy providers. These were deemed to be the fuels of the future that would replace fossil fuels. In reality, the U.S. continues to rely heavily on fossil fuels, with 25.46 trillion cubic feet of gas consumed every year. Industrial and commercial users account for 39% of the annual gas consumption, at 7.10 trillion cubic feet and 2.90 trillion cubic feet respectively.

What Steps Can Be Taken To Plug The Skills Gap?

In a competitive market, companies offer enhanced rates of pay for skilled employees to entice them away from competitors. In many countries, oil and gas firms pay salaries that exceed the local average. However, enhanced pay is not enough to plug the approaching skills gap. The pool of employees will quickly become over-fished unless companies replenish it by developing their workforces.

The key to addressing the impending skills shortage is the development of existing employees through structured learning and development programs. Companies that can effectively identify and nurture talented employees will gain an advantage over their competitors. This is recognized by the leading players in the oil and gas sector. For example, BP PLC spends around $500 million each year on training and development. This is seen as an investment in its employees that will pay dividends over time.

Many companies focus their training efforts on new hires, particularly graduate recruits. While there is no doubt that initial training and development for new hires is important, the companies that develop people beyond this initial two to three year period will be most successful in replacing the highly-skilled professionals that are due to retire.

With training budgets constantly squeezed, learning and development professionals must make the most of new technology to streamline training delivery and make it more cost-effective. E-learning can deliver significant savings if it is used wisely. E-learning technology makes it easy to share training globally without diluting the message. It also allows training packages to be delivered multiple times without the need to pay for premises, travel costs, and a trainer every time the course is delivered.

Mentoring programs are a useful method of assisting employees to develop managerial skills, with experienced managers able to share their wisdom with up-and-coming employees. Mentoring programs can also help new executives plug in to vital networks.

In order to widen the pool of talented employees, companies need to search globally for new recruits. Hiring employees from abroad can present challenges when it comes to securing work visas. However, there are special categories for highly-skilled workers to ensure that U.S. companies can import vital skills that cannot be secured through domestic recruitment.

Conclusion:

Business gas suppliers need to take steps now to address their future succession planning needs. Companies must identify the employees who are likely to retire and plan how they will recruit, develop, and retain potential replacements. This is likely to mean investing money in learning and development programs that nurture and motivate top talent.

Sam Jones the author is often asked how to compare electricity prices. He recommends comparison website uSwitch.com where all of the energy suppliers can be compared with a user-friendly price comparison facility

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