Oil & Gas: The Great Talent Exchange
As talent professionals, we use the term 'war for talent' until we're blue in the face. Despite the rampant over-use, it has never been so appropriate for what the Oil & Gas industry is about to experience.
Oil & Gas has seen the highest peaks of booming prosperity and the deepest valleys of economic headwind, but we arguably have never seen a market like this. While the rest of the economy moves along at a healthy clip, our Oil & Gas community is experiencing market turmoil that puts the post Lehmann recession to shame. Gross oversupply of domestic and international crude, coupled with economic slowdown in China and a surprisingly warm winter has left storage hubs at or near capacity, pipelines at less than full capacity and refiners slashing prices of refined products just to empty their tanks. For O&G professionals, this feels like a very dark place.
A slowdown of this magnitude has obvious implications for the employment market. Upstream producers, midstream transporters and refiners have seen their CapEx and OpEx budgets in some cases cut in half or more. In addition, support services companies such as fabricators, equipment suppliers, engineers, scientists and constructors are all gravely impacted. Without growth, and in most cases sizeable market contraction, jobs cannot be sustained. As a result, wave after wave of personnel cuts have been made. Projects have been cancelled and businesses have been shuttered. All of this is culminating in a glut of qualified, yet stranded or unemployed talent.
The critical question to ask is: how deep did the cuts go? For most, the 'trimming of the fat' happened long ago. Subsequent cuts have gone into muscle and bone. Otherwise put, the ability to do business at the pace of normal market conditions simply doesn't exist as it once did. Critical business functions from project management, field development, operations and corporate roles once critical to the health of your business simply vanished as the slowdown went from months to years. The skeleton crew that remains will be tasked with rebuilding, but how and when?
A 'war for talent' is looming large, intensified every day by the persistance of these down market conditions. Have no doubt about it, when the Oil & Gas economy clears the hurdle from recession to prosperity the hiring market will enter a frenzy. A down market this pervasive, leaving company personnel resources so largely depleted, can only result in the subsequent hiring activity drafting or outpacing the market recovery. A bullish prediction maybe, but if the labor market leading up to the 2013/2014 peak is any indication, we are in for a wild ride.
So, why go so large as to as to term the recovery as 'The Great Talent Exchange'? It's simple: nobody has been spared from the pain of this market contraction and everyone will be hiring at the exact same time-and at a rapid clip. Producers, midstreamers, refiners, engineers, constructors, fabricators and so on will make their move, jockeying for market share by picking up the most capable talent. Sure, there will be those that lag behind, but the task of identifying quality candidates from the rapidly diminishing talent pool will be even more difficult. Two characteristics will delineate Oil & Gas companies when the market breaks loose: those leading the race and those operating with the panic of realizing they missed the starting gun. A sound talent strategy with a portfolio of recruitment resources to get the job done will be paramount to your positioning in the looming race to hire. How does your strategy look?
About the Author:
Jared Smith is the Founder of Reliance Workforce, LLC, a targeted search firm specializing in executive and strategic search. His experience spans business development, executive consultancy and high-level recruitment for multiple Fortune 500 companies. He currently resides in Denver, CO.