While it is anyone’s guess what the price will do in 2016, it does not take an expert to know what a prolonged drop in price will do to the talent pool in this industry.
It is a well-known and documented fact that the Oil and Gas industry is heavily loaded with Baby Boomers. By some estimates 50% or more of the engineering and geoscience professionals will be retiring or will be eligible for retirement in the next few years. This has actually been termed the “Big Crew Change”. This fact coupled with the tremendous amounts of layoffs may be setting the industry up for a talent shortage in the coming years.
We are hearing an interesting trend from a number of our clients that are baby boomers. We’ve talked to many individuals that are choosing retirement early due to this downturn. These Baby boomers have already experienced the downturn in the 80′s and have planned their exit strategies over the last 5 years. After “toughing it out” before they are ready to move on from the industry. We’ve also hear from some of the baby boomers that they are choosing to step aside so that some of the younger talent can keep their jobs. They understand that the industry will need the critical talent once the price stabilizes.
In either scenario, the industry may be losing long term talent that will be difficult to replace.
While layoffs are often a necessity to companies in order to survive, the Oil and Gas industry still needs to continue to mentor and develop the next generation of technical professionals.
Walker Elliott can help our clients in this area. We can help with retention strategies after layoffs, short term contractors, or even internships for the recent graduates.
For further reference see the following articles:
http://magnaes.com/oil-and-gas-baby-boomers/
http://www.ogj.com/articles/print/volume-112/issue-10c/regular-features/journally-speaking/the-big-crew-change-is-here.html