Australian Oil & Gas Industry at risk of collapse – Solving the workforce skills crisis
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| 16 September 2014 |
Maximising Workforce
Productivity in the Oil and Gas Industry
Productivity in the Oil and Gas Industry
An
inadequately skilled workforce in Australia has been identified as “a major impediment to the growth of
Australia’s resource sector” – (APPEA, Platform for Prosperity)
inadequately skilled workforce in Australia has been identified as “a major impediment to the growth of
Australia’s resource sector” – (APPEA, Platform for Prosperity)
In Western Australia
alone, $130 billion worth of resource and infrastructure projects are under
construction. These projects alone account for 83% of Australia’s mineral and
petroleum sales. Clearly, this sector is vital to Australia’s economy and prosperity.
alone, $130 billion worth of resource and infrastructure projects are under
construction. These projects alone account for 83% of Australia’s mineral and
petroleum sales. Clearly, this sector is vital to Australia’s economy and prosperity.
For such projects
to successfully proceed through the exploration, construction, operation,
maintenance and shutdown phases, hundreds of thousands of staff are required
across occupational disciplines. Unfortunately, studies show that a significant
shortage of adequately skilled workers is threatening the industry’s functionality
and future. No skilled workforce means no operations, and no operations means
no productivity, exports or GDP.
to successfully proceed through the exploration, construction, operation,
maintenance and shutdown phases, hundreds of thousands of staff are required
across occupational disciplines. Unfortunately, studies show that a significant
shortage of adequately skilled workers is threatening the industry’s functionality
and future. No skilled workforce means no operations, and no operations means
no productivity, exports or GDP.
That’s not
all. The oil and gas industry generates a significant level of additional
economic activity in other industries. Clements (et al, 2006) has suggested
that for every job in the industry, another 4.13 jobs are created in another
industry (the multiplier effect). This shows just how important it is to keep
Australia’s oil and gas sector strong. This can only happen with a skilled
workforce and thorough workforce
planning.
all. The oil and gas industry generates a significant level of additional
economic activity in other industries. Clements (et al, 2006) has suggested
that for every job in the industry, another 4.13 jobs are created in another
industry (the multiplier effect). This shows just how important it is to keep
Australia’s oil and gas sector strong. This can only happen with a skilled
workforce and thorough workforce
planning.
The oil and gas
industry has recognised the importance of long-term workforce
planning to ensure the industry has the workers it so desperately needs. Still,
the industry has much to learn about effectively planning, developing and
managing it’s workforce.
industry has recognised the importance of long-term workforce
planning to ensure the industry has the workers it so desperately needs. Still,
the industry has much to learn about effectively planning, developing and
managing it’s workforce.
Industry workforce issues
One of the
major considerations in workforce management is planning for, obtaining and
retaining the optimum workforce expertise to enhance the productivity and
profitability of the organisation. Businesses must find the right people, train
them to operate in the workplace, ensure they don’t leave or get poached, find
ways of progressing staff along a career path, and ensure that their collective
skills and knowledge are transmitted to newer employees.
major considerations in workforce management is planning for, obtaining and
retaining the optimum workforce expertise to enhance the productivity and
profitability of the organisation. Businesses must find the right people, train
them to operate in the workplace, ensure they don’t leave or get poached, find
ways of progressing staff along a career path, and ensure that their collective
skills and knowledge are transmitted to newer employees.
All
businesses face the same workforce planning cycle (above) to some extent. But
the oil and gas industry comes with its own unique set of issues that pose
difficult challenges for workforce management. These include:
businesses face the same workforce planning cycle (above) to some extent. But
the oil and gas industry comes with its own unique set of issues that pose
difficult challenges for workforce management. These include:
1.
Remote working
environments – Offshore or remote onshore locations, shift work, and long
periods away from home and family can make it difficult to attract and retain
staff.
Remote working
environments – Offshore or remote onshore locations, shift work, and long
periods away from home and family can make it difficult to attract and retain
staff.
2.
Inadequate
near-site infrastructure – Lack of housing, accommodation, roads, public
transport, airlines, schools, healthcare and childcare among other essentials
around oil and gas sites, can create further barriers to attracting, training
and retaining workers.
Inadequate
near-site infrastructure – Lack of housing, accommodation, roads, public
transport, airlines, schools, healthcare and childcare among other essentials
around oil and gas sites, can create further barriers to attracting, training
and retaining workers.
3.
FIFO
Lifestyle – The familiar ‘Fly-In-Fly-Out’ culture is another barrier to
attracting, training and retaining an optimum workforce. Workers spending extended periods of time
living and working away from their families, friends and lives has been
attributed to the cause of fractures in marriages, family breakdown, mental
health and well-being, and therefore many high potential workers are avoiding
or opting out of the industry as a career route.
FIFO
Lifestyle – The familiar ‘Fly-In-Fly-Out’ culture is another barrier to
attracting, training and retaining an optimum workforce. Workers spending extended periods of time
living and working away from their families, friends and lives has been
attributed to the cause of fractures in marriages, family breakdown, mental
health and well-being, and therefore many high potential workers are avoiding
or opting out of the industry as a career route.
4.
Labour
shortages vs skills shortages – These are at an alarming level in the oil
and gas industry. Since the industry keeps growing by approximately 9% annually,
the shortages are projected to worsen. Labour shortages refer to the supply of new
entrants/recruits, and skills shortages refer to the supply of qualified
workers. The oil and gas industry faces both types of shortage, but the biggest
challenge lies in sourcing skilled workers in various engineering disciplines,
trades, advanced trades, geosciences, logistics and various support roles.
Labour
shortages vs skills shortages – These are at an alarming level in the oil
and gas industry. Since the industry keeps growing by approximately 9% annually,
the shortages are projected to worsen. Labour shortages refer to the supply of new
entrants/recruits, and skills shortages refer to the supply of qualified
workers. The oil and gas industry faces both types of shortage, but the biggest
challenge lies in sourcing skilled workers in various engineering disciplines,
trades, advanced trades, geosciences, logistics and various support roles.
5.
Project
phases have different workforce requirements – Due to the operational
nature of most oil and gas projects, different staff with different skills are
required in each phase of a project. The exploration stage requires few technical, scientific and
administrative staff.
Project
phases have different workforce requirements – Due to the operational
nature of most oil and gas projects, different staff with different skills are
required in each phase of a project. The exploration stage requires few technical, scientific and
administrative staff.
The construction phase may require a workforce of hundreds, but with a
majority of unskilled or ‘easy to train’ labour.
majority of unskilled or ‘easy to train’ labour.
As soon as operations commence, staff levels shrink dramatically, but the
remaining roles must be filled, once again, by people with highly technical or
scientific skills.
remaining roles must be filled, once again, by people with highly technical or
scientific skills.
Making sure that the right people are available, and in place at the right
time, is a constant challenge in the industry.
time, is a constant challenge in the industry.
6.
Duration
of training – Training for the oil and gas sector is a long-term
proposition. As a result, when student enrolment in certain disciplines is low,
the industry may experience long periods without qualified workers. Many jobs,
particularly in the operational phase of oil and gas projects, require highly
skilled and qualified workers such as engineers of all specialisations,
geologists, geoscientists, petro-physicists and techies. It takes years in
university to train for these occupations, and students and graduates often
need significant on-the-job training. This means that filling skills gaps and
building a skilled workforce in this field requires long lead times.
Duration
of training – Training for the oil and gas sector is a long-term
proposition. As a result, when student enrolment in certain disciplines is low,
the industry may experience long periods without qualified workers. Many jobs,
particularly in the operational phase of oil and gas projects, require highly
skilled and qualified workers such as engineers of all specialisations,
geologists, geoscientists, petro-physicists and techies. It takes years in
university to train for these occupations, and students and graduates often
need significant on-the-job training. This means that filling skills gaps and
building a skilled workforce in this field requires long lead times.
The current
approach to industry training – as opposed to the desired approach – is another
cause of the industry’s fragile state. Historically, the industry has had an
excellent commitment to staff training, long-term career progression and professional
development that other industries could learn from. However, the oil and gas industry
tends to link quality training and assessment to improved safety and increased
productivity. It doesn’t yet see qualifications-related training as an
essential outcome.
approach to industry training – as opposed to the desired approach – is another
cause of the industry’s fragile state. Historically, the industry has had an
excellent commitment to staff training, long-term career progression and professional
development that other industries could learn from. However, the oil and gas industry
tends to link quality training and assessment to improved safety and increased
productivity. It doesn’t yet see qualifications-related training as an
essential outcome.
According to
an industry workforce planning report by RITC, “The oil and gas industry needs to ensure it has the human talent to
deliver on growth through strategic workforce planning, key skill pool
development and by remaining focussed on the key pathways to employment.” I
believe this illustrates the need for carefully planned training, qualification
and career progression pathways, for the long term within the industry.
an industry workforce planning report by RITC, “The oil and gas industry needs to ensure it has the human talent to
deliver on growth through strategic workforce planning, key skill pool
development and by remaining focussed on the key pathways to employment.” I
believe this illustrates the need for carefully planned training, qualification
and career progression pathways, for the long term within the industry.
In fact, there
is a long history in the industry of on-the-job training taking precedence over
formal qualifications, traineeships or apprenticeships. The result is that the
industry is still not meeting its demands for higher-qualified workers. To add
to this, the Australian Government hopes to produce at least five million more
qualified workers by 2020. With so many people directly and indirectly employed
within the sector, it is vital that the industry sees the benefit to combining
safety, productivity AND qualifications to benefit the national economy and global
competitiveness as a whole.
is a long history in the industry of on-the-job training taking precedence over
formal qualifications, traineeships or apprenticeships. The result is that the
industry is still not meeting its demands for higher-qualified workers. To add
to this, the Australian Government hopes to produce at least five million more
qualified workers by 2020. With so many people directly and indirectly employed
within the sector, it is vital that the industry sees the benefit to combining
safety, productivity AND qualifications to benefit the national economy and global
competitiveness as a whole.
Preparing
this next generation of skilled workers becomes increasingly urgent with every
passing year. Because of its aging workforce, the oil and gas industry also
faces a loss of critical skills, experience and knowledge. An 2009 APPEA report
indicated that in some operational areas, up to 50% of skilled staff were due
to retire within the next five years. Partly because of the long duration of
training for skilled workers, businesses must consider how best to retain
knowledge, or face losing it altogether.
this next generation of skilled workers becomes increasingly urgent with every
passing year. Because of its aging workforce, the oil and gas industry also
faces a loss of critical skills, experience and knowledge. An 2009 APPEA report
indicated that in some operational areas, up to 50% of skilled staff were due
to retire within the next five years. Partly because of the long duration of
training for skilled workers, businesses must consider how best to retain
knowledge, or face losing it altogether.
It is vital
that the oil and gas industry continues to recognise the importance of
workforce planning, workforce development and continuous training. Once again, without
well-trained and competent staff, there is no oil and gas industry.
that the oil and gas industry continues to recognise the importance of
workforce planning, workforce development and continuous training. Once again, without
well-trained and competent staff, there is no oil and gas industry.
Workforce
planning involves gap analysis, competency profiling and mapping of current and
desired skills pathways against an organisation’s strategic objectives, among other actvities. If you
would like tools, advice, guidance or services in workforce planning, contact
us for a free consultation – I’d be very
happy to assist.
planning involves gap analysis, competency profiling and mapping of current and
desired skills pathways against an organisation’s strategic objectives, among other actvities. If you
would like tools, advice, guidance or services in workforce planning, contact
us for a free consultation – I’d be very
happy to assist.
Why not book Sarah to train your senior staff
in Workforce Planning & Development?
in Workforce Planning & Development?
Remember, you only have a turnover, if your staff are turning up!
Happy workforce planning 🙂
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