“Energy jobs: Oil and gas industry could hire 100,000 workers…” referencing research by Goldman Sachs appeared on CNBC, you can read the entire article here: http://www.cnbc.com/2016/07/08/energy-jobs-oil-and-gas-industry-could-hire-100000-workers--if-it-can-find-them.html

The article posited that an improving economy will drive demand for hydrocarbons and an energy industry hiring binge coming off several years of downturn that featured scads of layoffs, early retirements, and buyouts. Presently, data does suggest that the layoffs have peaked and are tapering off. The folks at Raymond James added that they believe adding 100 to 200 rigs to the current U.S. rig count (at 440 as of 8 July) operating in the U.S. will be “manageable” but could create staffing difficulties as the working rig count approaches 600.

Just to put this in perspective and if memory serves, barely two years ago the working rig count in the U.S. was about 1900. Anyone that’s been around the patch for a while has lived through the industry cycle. The process of balancing supply with demand is pretty messy in the oil and gas business. There are booms where hiring accelerates to meet demand growth and when supply balances or a recession comes along the inevitable “cut to the bone” layoffs generally follow. The service companies and equipment suppliers often bear the worst of downturns, but everyone feels the pain.

There are a lot of different opinions on what happens next, but there does appear to be an emerging consensus of at least moderate growth after a couple of very hard years. If the next boom is just around the corner, then the oil and gas industry will begin hiring. It won’t be easy to assimilate up to 100,000 new workers. But, one might say, “they were all working in the industry before and now they are just coming back”. That may be the case for many, however “they” will more than likely be new to role, new to company, and new to geography. In addition, time has passed and there will certainly be a learning curve for all involved at this point. All of the above present serious challenges to operations.

As a performance improvement firm, we see first-hand how disruptive employee turnover can be to an operation. In our experience we find this to be especially true in E&P. Here are a few reasons why we see it that way: •

  • Just about everything that happens in an oil & gas company requires multiple competencies and the work usually occurs within cross functional business processes. This is often viewed as being in conflict with solving problems or restoring production outages. Often the default becomes: “Get ‘er done”.
  • In operations, many people work remotely from the center and there is often little time for on-the-job mentoring and coaching. Individuals can feel conflicted as to whether to let the process work or just fix the problem.
  • The oil & gas industry thrives because of an overwhelming “can do” spirit; while this is a tremendous strength it also can create problems when individuals are working within business processes. As the crusty driller used to yell at his roustabouts, “Pull your fingers outta you’re a**, we’re trippin’ out and back in before we go home today!” And yes, that pipe string was about 8,200 feet if memory serves. And no, we never did a roundtrip from that depth in one tour.

To maintain consistency in performance, oil & gas businesses utilize cross functional processes. These processes exist because any other approach utilizing technical disciplines would be far more costly. Utilization of cross functional processes fosters "technical excellence" at a brisk pace compared to more traditional functional organizations. The other advantage of cross function processes is that a number of people contribute to problem resolution through different points of view and experiences. The downside is that it is more difficult for individuals to just go and fix something.

Whenever we see a business with a large number of people moving in or out, we also see a threat to process integrity. So, if you are making a hiring move in the near future now is a great time to do an assessment of the fit and function of your business processes. Times, conditions, and the business environment can change and so should your processes. Certitude Group can assist with an assessment of the current fit, function, and effectiveness of your business processes and we can design enhancements to not only correct deficiencies but also improve the effectiveness of your operations. We have identified millions upon millions of dollars in benefits associated with business process upgrades. These benefits materialize through better technical outcomes and cost effectiveness.

We can do the same for you and your company. Just drop a note to info@certitudegroup.com and we will set up a time to discuss you situation in detail.

We wish you a great finish to the summer of ‘16! Best regards to all…

 

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