The Australian Oil and Gas industry is currently facing some of its greatest challenges to date. It is no surprise that a significant drop in oil prices has resulted in a renewed focus on operating efficiencies and cost reductions.
Current industry challenges
What initially began as reductions in planned hires has now left many executives with the challenge of trying to identify who of their existing workforce to hold on to. In addition to current market disruptions, the industry is operating in a fiercely competitive global market, resulting in organisations struggling to identify which strategies to implement to best manage their current workforces for the long term. Key to being able to make the workforce decisions executives currently face, is insight into which roles and capabilities within the industry are critical for operational success. Under current low growth-low price scenarios, these positions must be retained to navigate organisations through short to medium-term challenges.
Identifying critical roles and capabilities is a key challenge. An additional challenge is understanding which skills will be required in the future to exploit the fast-paced adaptation of technologies being introduced to increase operational efficiencies. The people capability required to support new technology and roles impacted by these technologies in future are not well defined or understood within the industry.
Mercer has conducted unparalleled longitudinal research on the composition of the oil and gas workforce globally over the past 10 years. Mercer’s recent research, published in the Oil and Gas Talent Outlook Report 2016-2025 indicates that globally, the experience and capability gaps within the industry have become more pronounced due to new and more complex technologies. Mercer’s research indicates that there are specific roles within the Energy Exploration and Extraction job family that are most at risk to technological advancement.
The biggest danger from a people capability perspective is over-reacting to short-term price movements. Organisations need to understand the fundamentals of roles within their workforce and best practice in improving time-to-proficiency for critically important roles. A snapshot of time to proficiency for critical roles in the industry, identified through our research, is outlined in Figure 1.
Figure 1. Years to competency for key Oil and Gas occupations
- What is your organisation doing to tackle its current workforce challenges?
- How are you developing your people capability strategy to integrate with future technologies in the industry to ensure operational success?
Read part two of this three part series - "Will Australian Oil & Gas industry capitalise on this perfect storm to future-proof itself?"
For more information, download the Oil & Gas Talent Outlook 2016-2025 Report below.