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TheStreet Open House

A Retirement Wave And Technical Skills Gap Threaten Oil And Gas Company Growth And Profits, According To Mercer Survey

Stocks in this article: MMC

The world’s oil and gas industry is in the midst of a talent crisis and needs to find alternatives to poaching from competitors, according to Mercer’s Energy Consulting practice. Mercer’s workforce analysis indicates that in the US alone, many large employers risk losing 50-80% of their retirement-eligible population in the next five years.

To address this global energy talent crisis the just-released Mercer Global Oil and Gas Talent Outlook and Workforce Practices Survey shows that approximately two-thirds of oil and gas companies intend to fill the void by “buying” talent from outside their organizations, and nearly 50% of these same employers intend to use “poaching” from competitors as their predominant source for new talent. This dynamic arises at a time of unprecedented opportunities that can only be capitalized on with a sufficiently productive, engaged and increasingly global workforce. Unaddressed, this talent shortage will threaten individual company growth and profitability.

The Mercer Global Oil and Gas Talent Outlook and Workforce Practices Survey collected input from more than 120 companies representing over one million employees across 50 countries. To learn more visit www.mercer.com/energy.

“The widely-embraced strategy in the oil and gas industry of ‘poaching from the competition’ is simply not viable or sustainable,” said Philip Tenenbaum, Senior Partner and Global Leader of Mercer’s Energy consulting practice. “A more strategic approach to both talent acquisition and workforce management that focuses on innovation and execution is required for those oil and gas industry members who hope to become leaders and separate themselves from the competition.”

While the looming retirement wave is of primary concern to oil and gas industry employers, the Mercer survey also reveals other critical talent issues faced by oil and gas employers throughout the world, such as:

  • 74% of organizations surveyed cited ”technical skills gap” as a critical problem, but leadership, management and supervisor skills were also noted as being in short supply
  • The oil and gas industry will add more than 530,000 positions in core professional and technical jobs over the next five years and more than 1.1 million over the next 10 years, yet over half of the world’s largest oil and gas producing countries will not have an adequate supply of talent to meet this demand
  • Among the 56% of companies who say they have a workforce-planning process that identifies gaps, only 27% say that process also provides solutions to close gaps

In its efforts to enable oil and gas industry-clients to successfully address these talent and workforce challenges, Mercer advocates a talent sourcing and development strategy that aims to build an adequate supply of required talent, enhance the skills and capabilities of the company’s existing workforce, engage staff and foster commitment and loyalty. These programs must also address the need to manage cost and risk exposure.

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