By Clara Lippert Glenn, President and CEO, The Oxford Princeton Programme
With the U.S. unemployment rate continuing to hover just above 8 percent, it’s surprising to learn that many companies are having significant trouble filling job openings. According to last year’s survey by staffing firm Manpower Group, more than half of the nation’s employers can’t find qualified workers—and are actively looking.
This talent shortage can have major consequences for a wide spectrum of industries, not the least of which is the business of energy. The truth is that the energy industry is experiencing an extreme worldwide labor shortage. A recent survey conducted by Grant Thornton LLP of upstream American energy companies, revealed that 71 percent of oil and gas executives expect employment levels to rise within their companies this year, and 86 percent believe employment levels in the oil and gas industry will increase, as well. But because of these gains, 55 percentof the executives anticipate difficulties hiring and retaining employees. These statistics, combined with the threat of mass retirements over the next few years, mean there simply are not enough new employees available to meet future demand.
It certainly isn’t because the industry doesn’t pay well. Jim Noe, senior vice president at Hercules Offshore in Houston, TX, said in a May 2012 interview on NPR’s All Things Considered, that his firm is paying high school graduates $55,000 a year with full benefits, including a 401k and health-care coverage, and yet “we’re still struggling to attract workers.” According to the latest jobs report from the Bureau of Labor Statistics, the average weekly income for a worker in oil and gas extraction is $1,576, which represents a 21 percent increase since before the recession. An August 2012 report in Reuters observed that oil workers are “enjoying strong growth in pay, thanks, in particular, to a shortage of the most experienced engineers, a trend that shows no sign of easing,” and that the average salary for an oil and gas industry employee is approximately $107,000 annually.
The Solution: Training and Retraining
So what can be done to ease the fast-growing pressure on the energy industry—and every industry facing the same concerns—and to find creative ways to support the demand? Training and retraining is ultimately the solution. Here are several examples:
- Many firms are partnering with community colleges to train students for energy jobs. One such partnership is at TeamBuilders Academy at Prince George’s Community College in Maryland, where Sustainable Star Chairman Roy Dunbar has placed students from the college as interns and apprentices for the last two years.
- Nonprofit organizations are finding willing trainees and are working with industry leaders to fill waiting jobs. In Los Angeles County, for example, ConocoPhillips is working with the South Bay Center for Counseling to train process operators and instrument technicians to monitor refinery operations.
- Energy industry leaders launched the Troops to Energy Jobs program in 2011, which recruits, trains, and retrains American veterans for careers in energy. The program was created as an answer to the large percentage of energy workers who will be eligible to retire within the next half decade, and to help veterans who are struggling to find jobs in a challenging economy.
- IMPACT, the Ironworker Management Progressive Action Cooperative Trust, recently received a Department of Labor grant to retrain ironworkers in five cities for green energy jobs, such as building wind turbines.
- According to the Nuclear Energy Institute, the nuclear industry’s partnerships with the federal government, nongovernmental agencies, and colleges and universities are attracting a growing number of students to the field.
- State agencies and governments are linking with area colleges to offer renewable energy and energy efficiency training for dislocated workers and current employees. Many of these programs are funded by the U.S. Department of Energy and the U.S. Department of Labor’s Employment and Training Administration.
- The 2012 Global Oil & Gas Workforce Survey notes, “Expectations for hires and pay rates in the oil and gas industry suggest that while the ‘great crew change’ remains high on the agenda, there are signs the industry is beginning to take its role more seriously by making attempts to combat the issue of the large number of expected retirements. Solutions are innovative and wide-ranging from internships to virtual mentorships and supplementary offsite education programs.”
Even with the vast number of unfilled positions, more than 9.2 million Americans depend on the oil and gas sector alone. Training and retraining for all levels of employment ultimately will save the industry from its expected severe worker shortages. And as these jobs evolve, as new technology and environmental regulation transform the industry, an educated and well-trained staff is essential. Ongoing training of experienced energy professionals, as well as partnerships with industry, government, nonprofits, and education institutions, will have a wide-ranging impact on the individual being trained, his or her employer, and on the future of the energy industry.
Clara Lippert Glenn is president and CEO of The Oxford Princeton Programme. She has provided the vision and leadership behind The Oxford Princeton Programme’s innovative and successful approach to interactive professional education, building it into a global leading provider of energy education. She has a Master’s degree in International Management from the American Graduate School of International Management (Thunderbird), after which she began her career in energy commodity trading at Amerada Hess. During her time at Amerada Hess, and later Total CFP, she came to appreciate the lack of industry training for those in and around commodity trading and operations groups.