The aging and retirement of the baby boomers is significant. Most of the personnel in the industry are from that generation and are in their late fifties, so retirement for many is looming in the near future. There is an age gap in the oil industry workforce with the 35 to 50 year old age group significantly under-represented. This is because of downsizing during the 80’s and 90’s, which resulted in more than half the oil industry jobs being eliminated.
Because of the age gap there is a shortage of mid-management workers. Persons at that level of experience are needed to ensure a transfer of knowledge from older, more experienced workers to younger managers who will then be-able to carry on with the industry’s work.
Currently the oil industry is trying to find ways to bring younger workers up through the ranks faster to fill the mid-management gap and to enhance knowledge transfer from older to younger workers. This includes efforts to recruit at colleges and universities and professional ranks. These recruiting efforts are a long term solution that will take a long time to provide the needed results. A short term and more immediate solution is the increased use of contractors to carry out the oil production work.
Outsourcing to contractors represents a significant change to traditional business models, but management is realizing that there are significant advantages as well.
These outsourced advantages include:
- better control over production costs
- the ability to share inherent risks environmental and ecological among more entities
- the freeing up of management for other areas of the business that need their attention
The use of contractors can create greater economies of scale and efficiencies that may have not existed before or were undervalued and under utilized.
It is likely that the trend toward increased use of contractors will continue indefinitely. Also, the increased efforts at recruiting from the college and professional ranks will continue long term. The permanent solution to the industry’s human resource problem will be a combination of both recruiting permanent long term employees and increasing use of contractors for production work.
A balance will be reached that will serve as the long term solution to the human resource problem and also provide efficiencies and economies of scale that will benefit the industry as a whole.
But the current shortage of workers is why the future oil pro workforce will be made up of mostly contractors. Our Knowledge Capture program can help your organization capture the much needed information of a retiring workforce for the long term employees you will keep on staff.