Features > Research & Analysis

REMEDIES FOR OIL AND GAS WORKFORCE CHALLENGES

Sunday, 18th December 2016

By Salma Essam

In the exceptionally competitive market of the oil and gas industry, it becomes essential to improve the existing human resources development policies. This requires a set of strategies that ranges from a global training strategy for the industry to reliance on local workforce to attracting calibers from diverse labor pools that may not have been previously involved in a sufficient manner, such as women and workers with disabilities. Therefore, certain training schemes and policies should be applied in order to avoid a chronic skills shortage in the medium and long-term and to enable growth.

Developing Global Training Strategy

Efforts have been taken on the part of oil and gas companies to create efficient training programs for its workers, yet, they proved to generate only limited success. A coherent global training strategy needs to be designed and created with alignment to the International Labor Organization (ILO) standards and policies.

The framework for skills development is introduced in the Human Development Recommendation 2004 of the ILO. In a prepared paper by the ILO’s sectoral activities department titled: Current and Future Skills, Human Resources Development, and Safety Training for Contractors in the Oil and Gas Industry, it is explained that this framework mainly focuses on promoting a virtuous circle. This happens through matching the training needed to labor market demands, equipping lifelong learners with opportunities, and using developed skills to drive innovation, which will help in future job growth. Through this holistic strategy, the industry can have a well-trained workforce and even higher employment results.

In addition, the 97th session of the International Labor Conference held in 2008, presented the conclusion on Skills for Improved Productivity, Employment Growth, and Development, providing practical guidance on how the recommendation of 2004 can achieve the desired efficiency. The conclusion introduced a vision framework for strengthening the bonds between skills, productivity, employment, and decent work. It underpinned effective skills principle, according to which these development strategies need to become a cardinal component of national development policies for them to be successful. In this way, the workforce and corporate sector will be better prepared to adopt novelties and capitalize on new opportunities.

In order to successfully link skills to productivity, employment creation, and development, skills development policies should target three objectives: matching supply to current demand for skills; helping workers and enterprises adjust to change; and anticipating and delivering the new and different skills that will be needed in the future.

Subsequently, the ILO developed the G20 Training Strategy: A Skilled Workforce for Strong, Sustainable, and Balanced Growth, published in November 2010, which focuses on building bridges between the world of education and training and the world of work. In the ILO’s report – Global Employment Trends 2012: Preventing a Deeper Job Crisis, it is explained that a skills strategy is needed to bring in the maximum potential of the employees.

A good skills development strategy will be able to: anticipate skill needs; engage employers and workers in decisions about training provision, including in specific sectors; maintain the quality and relevance of training; make training accessible to all sectors of society; ensure viable and equitable financing mechanisms; and continuously evaluate the economic and social outcomes of training.

As a result, it becomes important to note that all G20 countries have identified skills development as a strategic objective. It is stated that several countries are stepping up investments in skills, according to the 2010 ILO report. However, different countries focus on different elements as they see relative strengths and weaknesses in their own skills development systems, and as they learn more about innovations and experience in other countries. For example, India adopted an ambitious National Skills Development Policy in 2009. South Africa is adjusting training strategies under the newly created Ministry for Higher Education and Training.

The Global Employment Trends 2012 report outlines a conceptual framework and assembles the essential building blocks of a robust training strategy – including the roles of the social partners. It has, as well, explained that there are certain success factors for the G20 training strategy, which are: lifecycle perspective of skills development; policy convergence so that skills and employment policies are viewed together; coordination mechanisms to connect basic education to technical training, labor market entry, and lifelong learning, in addition to communication between trainers and employees.

Developing a global training strategy will help improve the overall employment sector and will inevitably and positively impact the oil and gas industry. Thus, the oil and gas industry’s training strategy would contribute not only to creating more decent jobs within, but it would also lead to job-rich growth in the country concerned. It is, therefore, recommended that the oil and gas industry would consider relying on its local workforce, initiate an inter-organizational scheme for sharing knowledge and experience, and attract entry-level talents. In addition, promoting equality in terms of hiring women and people with disabilities is in fact a basic element for the human development strategies in the industry.

Reliance on Local Workforce

Oil and gas companies, particularly national ones, are looking to build local skilled workforce so that they can rely less on expatriate services. Nevertheless, decreasing foreign workforce is difficult to implement in some cases, and nearly impossible in areas where local skilled workers can barely be found. For example, there is large population of migrant workers in the MENA region. Turkish-based Daily Sabah publication said in its business analysis – Gulf Countries Employ Highest Number of Workers, published in January 2016, that there are 17 million foreign workers in Gulf countries, ranking first in the world in terms of number of foreign employees.

It further explained that according to Al Jazeera Research Center’s report: “Gulf countries; namely, Bahrain, Qatar, Saudi Arabia, the United Arab Emirates (UAE), Kuwait and Oman, have rich oil and natural gas reserves and therefore need a foreign labor force. What these countries lack the labor force is provided by other countries, as locals with high incomes do not prefer to work as employees.”

Similarly, Senior Contracts Engineer at Mubadala Petroleum, Samy Fahmy, said in an exclusive statement to Egypt Oil&Gas: “Not all the national workers in the Gulf countries are skilled enough to meet the region’s ambitious growth plans. Accordingly, these plans create a continuous demand on foreign workforce across almost all the Gulf countries, especially with the nationals being very reluctant to do handy workmanships.”

Towards the end of 2004, the Gulf Cooperation Council (GCC) states were inhabited by 12.5 million foreigners, who constituted 37% of the total population. In Qatar, the UAE, and Kuwait, foreigners constituted a majority; in the UAE they accounted for over 80% of the population. Only Oman and Saudi Arabia managed to maintain a relatively low proportion of foreigners, about 20% and 27%, respectively.

Recently, several local companies tried to contain the challenge of having to recruit international workforce and drifted away towards relying on national workers. This comes in line with the desire to invest in their national citizens. They have recognized the increasing importance of recruiting local talents with local knowledge and experience to join their workforce and to move into business leadership roles. This change in emphasis is important, not just for cost reduction reasons, but for companies to benefit from the best local talents, culture, and knowledge.

Transfer of Skills

Transfer of skills required for the oil and gas industry must be made from countries that have the skills to countries that have not. Local content policies and practices are among the means through which such skills transfer can be accommodated and employers are already exerting efforts to meet them. For example, Total has a training center in Luanda, which is the Pazflor center, as part of its commitment to invest in developing its local staff in Angola. Courses offered for Angolans to work in the oil and gas industry include: risk analysis, geological systems and structures, industrial drawing, rotation equipment, and introduction to drilling, and valves and tubing.

In the meantime, some governments have established policy frameworks on implementing local content in staffing. In Ghana, since the discovery of major oil reserves at the Jubilee Oilfield in 2007, the active involvement and participation of locals in the oil and gas industry has become a major policy issue. After a nationwide consultation process in 2010, Ghana’s Ministry of Energy formulated a policy framework which set a number of key policy objectives, including: maximizing the use of local expertise, goods, and services; financing all aspects of the oil and gas industry value chain; developing local capability through education, skills, and expertise development; securing transfer of technology, active research, and development; achieving at least 90% local content and local participation in all oil and gas activities by 2020; and creating oil and gas and related supportive industries to sustain national economic development.

Attracting Entry-Level Talented People

It is known that all industries compete to recruit talented workers. Young people have many career opportunities other than the oil and gas industry. What’s more, the harsh living and working conditions of those employed in the Exploration and Production (E&P) sector and a perception that the oil and gas industry is dirty and dangerous have damaged its ability to attract young talents.

The industry needs to understand the work ethics of younger people. In general, the millennial generation has been characterized as adept at multitasking, and technologically savvy, but also as having a sense of entitlement, less loyalty towards organizations, and preferences for immediate benefits over long-term rewards. However, the ILO report points out that they also have higher motivation to transfer what they have learned during training back to their jobs, and higher learning-goal orientation – a concept defined as a person’s focus on acquiring knowledge for the sake of learning itself rather than just performing. Though, in general, these younger workers are reluctant to persist in pursuit of long-term goals through difficult times, they appear to be more motivated to utilize knowledge they have acquired.

These findings suggest that the oil and gas industry can leverage the preferences and motivational patterns among young people of this generation through training courses designed to quickly advance the necessary skills.

Women in Energy

The oil and gas industry has also been known for not responding to a gender conundrum in a flexible way and at a fast-enough pace. The industry has not managed to hire a large number of women workers.

Many female employees face various work-related challenges from their male counterparts. These stem predominantly from the male-focused culture and practices that permeate many aspects of organizational life in the industry, including demographic composition, assumptions, values, and every day practices. At the Abu Dhabi International Petroleum Exhibition and Conference held in November 2016, Vice President for Exploration in MENA at Shell, Eileen Wilkinson, highlighted the important value that women bring to the energy workforce. In this sense, Wilkinson stated: “I want to inspire young women to come into the industry. Women have technical excellence, the ability to multitask and to think through complex problems.”

Hence, the oil and gas industry could be more ambitious and more efficient when it comes to female colleagues. One way to tackle this opportunity is to create a climate of diversity, which could prevent harassment and discriminatory practices against women.

It is an indisputable fact that women have joined the industry and succeeded in it, General Manager of Operations & Communication Systems at Petroleum Pipeline Company (PPC), Engineer Amal Mansour, exclusively told Egypt Oil&Gas. Even, at the times of leaves, such as maternity leaves, women ensure that they accomplish their tasks. In this sense, she said: “Before going on a leave, women make sure that they prepared all work that will have to be complete at the time of their leave. Women tend to train people who will be in charge [during their absence], to guarantee that nothing will go wrong.”

Additionally, awareness training for all male and female workers needs to be implemented, as well as effective complaint procedures on a confidential basis. Due to the male-dominated nature of high ranking positions in the oil and gas sectors, women are presently less likely to be involved in decision-making processes. Thus, fair and equal gender representation must be reconsolidated within IOCs and national oil companies through strict policies and regulations.

In addition, oil and gas companies should adhere to ILO standards in salary matrix, which can easily be adopted by determining the amount of salary based on job descriptions and performance, and not on gender. This will further attract more women to the industry and pave the way for more skillful workers to join the sector.

People with Disabilities

Through its ‘Disability Program,’ The ILO further promotes equality of opportunities and treatment for people with disabilities in vocational rehabilitation, training and employment. These are reflected in the Vocational Rehabilitation and Employment (Disabled Persons) Convention, 1983 (No. 159), and the ILO Code of Practice on Managing Disability in the Workplace, adopted in 2001.

Under the Program, the ILO has established the Global Business and Disability Network, which is a voluntary group of representatives from multinational enterprises, employers’ organizations, business networks, and selected non-governmental and disabled persons’ organizations interested in incorporating diversity of disabilities in the workplace and in their strategic business plans.

At the time of writing, only one oil and gas company was known to be a member of this network, namely Sasol, an international integrated chemicals and energy company headquartered in South Africa. Sasol strives to apply affirmative action measures to ensure that people with disabilities are afforded reasonable accommodation, if and where appropriate. Greater participation by oil and gas companies in this network would demonstrate the industry’s determination to make progress in their commitment to achieve workplace diversity.

Given the increasingly competitive oil and gas industry, effective human development strategies are important to ensure high quality of work. This, in turn, requires recognition of skills and competencies, and their greater utilization in the workplace. To be effective, the strategies listed above must be linked with the policy agendas of the IOCs and local firms that would ensure all high-level training schemes are implemented, the transfer of skills is enforced, and both genders as well as people with disabilities are employed. Working capacities must simply be developed and even pushed beyond.

global training strategy human development policies human resources ILO local workforce