Amid the global price slump, U.S. exploring companies are also dealing with various other issues including drillers who are now aging.
The industry calls this the Great Crew Change; it is basically the looming retirement of thousands of older workers. Explorers are trying to deal with it by training younger employees and bringing in people from outside the industry.
Drillers are also having a difficult time in the current oil scenario as thousands of employees are being laid off and companies are holding on to scientists and engineers who can be very hard to replace.
“Everybody that’s going through the process of downsizing their business right now is faced with this extra complication,” said Robert Sullivan, a management consultant for New York-based AlixPartners recently commented to a major news organization about the topic.
He added that decisions are being made as right sizing is important in the present day but it could have a huge impact when the market returns.Some companies have been prepared for this for years. Apache Corp, which is based in Houston, has asked some senior staff to extend their career even past their retirement age. It also has a three year professional development program for new hires. The demographics are interesting, one half of the company’s staff are younger than 36 while a third is over 50.
The main reason for the gap is that there was a period between 1985 and 2000 when not many people entered the industry as it was then seen as bad career choice. But this mass retirement is coming at a time when the oil sector is already low on talent. Worldwide, oil and natural gas companies have cut more than 350,000 jobs since crude prices started to fall in 2014, according to a report by Houston-based consultant Graves & Co.
The industry employed around 1.4 million people last year, according to the American Petroleum Institute. The companies will need to hire almost 30,000 workers annually over the next two decades to replace departing and retiring employees, a report said.
Many companies are now trying to be more judicious with layoffs and are keeping on technical employees as they will be hard to replace even if they are expensive for the company. For example Woodlands, Texas based driller Newfield Exploration has cut about 450 positions since 2012, however the company has said it is being very careful to not cut into too much of their technical talent. “We still have significant operations and you are going to have to have talent to operate those when things turn around.” the company said earlier this month.
While companies may be finding it difficult to let of the older employees, some are passing down their knowledge to the younger workers. Companies are remaining very careful about their decisions.
Millennials have found this advantageous as companies are trying to entice themselves to younger employees and now offer more flexible schedules, medical plans and even gyms.