Australian Oil & Gas Industry at risk of collapse – Solving the workforce skills crisis

Australian Oil & Gas Industry at risk of collapse – Solving the workforce skills crisis

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Maximising Workforce
Productivity in the Oil and Gas Industry
Sarah Cordiner

An inadequately skilled workforce in Australia has been identified as “a major impediment to the growth of Australia’s resource sector,” according to APPEA in their report, “Platform for Prosperity.” In Western Australia alone, there are $130 billion worth of resource and infrastructure projects under construction. These projects account for 83% of Australia’s mineral and petroleum sales, underscoring the sector’s critical role in the country’s economy and prosperity.

For these projects to successfully progress through exploration, construction, operation, maintenance, and shutdown phases, hundreds of thousands of staff across various occupational disciplines are required. Unfortunately, studies indicate a significant shortage of adequately skilled workers, posing a threat to the industry’s functionality and future. Without a skilled workforce, operations halt, affecting productivity, exports, and GDP.

Furthermore, the oil and gas industry significantly boosts economic activity in other industries. Clements and colleagues (2006) suggested that each job in the industry creates another 4.13 jobs in other industries, demonstrating the multiplier effect and the importance of maintaining a strong oil and gas sector in Australia. This goal can only be achieved with a skilled workforce and thorough workforce planning.

Sarah Cordiner emphasizes this on Facebook, highlighting the industry’s recognition of the importance of long-term workforce planning to meet its critical needs. However, the industry still has much to learn about effective planning, development, and management of its workforce.

Addressing industry workforce issues involves several key considerations. Businesses must plan for, obtain, and retain the optimum workforce expertise to enhance productivity and profitability. This includes finding the right people, training them for the workplace, preventing them from leaving or being poached by competitors, facilitating career progression, and ensuring the transmission of skills and knowledge to new employees.

All businesses face a similar workforce planning cycle to some extent. However, the oil and gas industry has unique challenges for workforce management, including:

  1. Remote Working Environments: Locations can be offshore or remote onshore, involving shift work and long periods away from home. This makes attracting and retaining staff difficult.
  2. Inadequate Near-Site Infrastructure: Often, there’s a lack of essential facilities like housing, roads, public transport, and healthcare near oil and gas sites, creating barriers to attracting, training, and retaining workers.
  3. FIFO Lifestyle: The ‘Fly-In-Fly-Out’ culture can deter potential workers. Extended periods away from family and friends can lead to family breakdowns, mental health issues, and a reluctance to choose this career path.
  4. Labour Shortages vs Skills Shortages: The oil and gas industry faces both, with alarming levels of shortages. The industry grows by about 9% annually, exacerbating the issue. The challenge is particularly acute in sourcing skilled workers in engineering, trades, geosciences, logistics, etc.
  5. Different Workforce Requirements for Project Phases: Each phase of a project requires different skills. Exploration needs few staff, construction requires a large workforce, often unskilled, and operations require highly skilled technical or scientific personnel.
  6. Duration of Training: Training in this sector is long-term. Low student enrolment in certain disciplines leads to periods without qualified workers. Many operational phase jobs require extensive university education and on-the-job training.

The current training approach in the industry focuses on safety and productivity but often overlooks the importance of qualifications-related training.

An industry report by RITC highlights the need for strategic workforce planning and development of key skill pools, emphasizing the importance of training, qualification, and career progression.

The industry has historically prioritized on-the-job training over formal qualifications, resulting in a shortage of higher-qualified workers. The Australian Government aims to produce more qualified workers by 2020, highlighting the need for the industry to combine safety, productivity, and qualifications for national and global competitiveness.

With an aging workforce and impending retirements, the industry faces a loss of critical skills and knowledge. Businesses must consider how to retain knowledge to avoid losing it.

Effective workforce planning is crucial for the industry, involving gap analysis, competency profiling, and mapping skills pathways against strategic objectives. For tools, advice, guidance, or services in workforce planning, consider contacting for a free consultation.

Booking Sarah for training in Workforce Planning & Development can be beneficial for senior staff.

Remember, staff turnover only matters if your staff are turning up!

Happy workforce planning 🙂

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