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Today's oil, gas and energy sector faces multiple challenges, including price volatility, competitive threats, climate change and lack of skills.
Out of all these challenges, the issue of talent is one of the most pressing, with many oil and gas companies dealing with a considerable skills and talent shortage.
According to a study analysis by Accenture, the energy industry will experience a lack of up to 40,000 competent workers by 2025.1 The research also shows that Upstream Petrotechnical Professionals (PTPs) older than 55 made up 19 per cent of the total oil and gas workforce in 2015. By 2025, their numbers will drop to just seven per cent.
The energy industry is transitioning.Not just in terms of technology and responding to the growing global need for affordable, reliable and environmentally sustainable energy, but also through its jobs and people.
Can a new generation fill this skills gap?
It seems the younger workforce is unconvinced of the long-term viability of the industry and the sustainability goals that many of the companies advocate.
It’s predicted that Gen Z and Millennials will make up 72% of the world's workforce by 2029,2 yet an EY study reported that 62% of Generation Z respondents stated that they find a career in the oil and gas industry unappealing.3 This talent shortage poses a significant challenge for the global sector.
The 2021 World Petroleum Congress Global Youth Survey found that industry approval rates are lowest in North America. 30% of American survey respondents believe working in the oil and gas industry is unattractive. This was followed closely by 14% of European respondents.4
The impact of renewable energy jobs
The transition away from conventional fuel is becoming increasingly popular. According to The Global Energy Talent Index Report 2023, over three-quarters of energy professionals are considering a career change within three years. Most are looking to switch to renewables.5
But that's only part of the challenge. The power, petrochemical, and renewable sectors also want to attract personnel with the digital and technical skills required to handle automation, AI and other new technologies.
A report from Offshore Petroleum Industry Training Organisation (OPITO), the energy industry's not-for-profit skills body, suggested that the sector would need to recruit 25,000 people in the UK alone by 2025. Of those, 4,500 would be required for roles that didn't even exist at that time—primarily in fields such as data science, automation and new materials.6
Other factors influencing the labour shortage may include:7
- The negative perception -the industry is often cast in a negative light by the media; talented individuals may avoid the sector.
- Attracting overseas talent - there could be a need to “import” foreign employees to help fill the gap presenting a host of political, immigration and security issues.
- A shrinking talent pool - the onus is on oil and gas companies to ensure they get and retain the necessary talent by reviewing their recruiting and retention efforts. They also need to find ways to upskill or retrain their current workforce.
Mitigating the risk of talent shortages
The talent shortfall facing the industry is the kind of risk you can’t insure for. Offering an attractive package beyond remuneration can help set contractors apart; comprehensive employee health and wider benefits that make oil and gas a compelling proposition in the face of intense competition from other industries is critical.
Marsh Commercial is an oil, gas and energy insurance and risk specialist. We have over 40 years of sector experience and, together with Marsh, manage more than $3bn of insurance premiums in energy markets annually.
Operating in the oil, gas and energy sector can be high risk. Working with AIG, we’ve created an exclusive energy contractors insurance solution not available anywhere else on the open market. Find out how we can help you reduce your exposures and mitigate risk wherever it occurs.
Download our whitepaper 'Staying future confident in a volatile climate'.
How oil, gas and energy contractors can manage risk against an uncertain backdrop.
Download our whitepaper
How oil, gas and energy contractors can manage risk against an uncertain backdrop.
Sources
- accenture.com/Accenture-Strategy-Talent-Well-Oil-Gas.pdf
- assets.ey.com/how-do-we-regenerate-this-generations-view-of-oil-and-gas.pdf
- world-petroleum.org/2021_WPC_Global_Youth_Survey_v20211204.pdf
- airswift.com/geti
- opito.com/the-skills-landscape
- opito.com/policy-and-research/research/the-skills-landscape
- kpmg.com/xx/en/home/insights/2022/04/top-risks-facing-the-oil-and-gas-industry-in-2022.html
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