The Job Market in the Oil and Gas Business

A questionnaire was sent to all active young professional local section leaders worldwide (Italy, The Netherlands, Aberdeen, Delta, Gulf Coast, Vienna Basin, Norway, Australia, and Malaysia) and distributed to all young professionals contributing to these sections (both SPE and non-SPE members). The response was enthusiastic, and it is clear that the industry’s youth are keen to make their statements and opinions heard. Fig. 1 shows the respondents’ demographics.

The questions were aimed at investigating how young professionals feel about their current jobs and what they think about their potential career prospects and their stability in their current company. The tone of the questions was deliberately provocative in order to favor discussion and open the door for further discussions in the next Forums.

Question 1: Do you see yourself in the same company in 2, 5, 10 years’ time? Explain briefly the reason.

The general trend is very clear and can be observed in Fig. 2. The percentage who believe they will remain with the same company (“Yes”) decreases with time linearly, passing from 90% in the next 2 years to about 20–30% in the long term (10 years). Only 15–20% (mostly those with less than 3 years of working experience) do not yet have a precise idea (“?”) of their future in the company.

To better understand the reasons behind this answer, data were grouped by company size, work experience, and nationality. The results show that in small companies, the degree of loyalty is lower than in medium- to larger-sized companies. This could be linked to a higher degree of uncertainty about the company’s future performance. It is significant that there is a gap based on work experience. At the beginning of the career (3 years or less in experience, 41% of respondents), there was more confidence in their companies both in the short and in the long term. As length of experience rises, the degree of satisfaction and the initial enthusiasm drops sharply. Geographically and culturally, the most critical trend is observed in Europe. Some of the responses included:

• “I work for a company which considers the safety and well-being of its employees a top priority and has high ethical standards. I would probably leave the industry before I would work for another company.”
• “The average age in the oil field is 45–50. This means that there are endless opportunities for advancement inside the company. It’s only up to me.”
• “I will remain only if I see good opportunities for career (not only vocal promises as often happens) and proper salary treatments based on meritocracy. I did and I am doing so many sacrifices both in private life and on study-work. If the company will not recognize it, I will make sure some other company will. In my company, there is no respect for technical talent.”
• “After 2–5 years, having completed the training and gained enough technical expertise, I will have the technical skills to search for better opportunities offering better compensation.”
• “Today company change is needed to improve salary and be considered as a talent. If you stay longer with a company (10 years +), you will get stuck in your ways and change (lifestyle, working environment) will become very difficult. To stay dynamic and interested in your job you should move around.”
• “After 5 years, you lose employability day by day. So, if the company does not seem to recognize you for your effort, it’s time to seriously consider other opportunities.”

Analysis: In the job market of today, concepts such as “long-term loyalty” and “trust the company” have disappeared. Only 2% of the respondents expressed their will to remain within the company until retirement out of loyalty. Nowadays, young employees are often more aware of opportunities outside their company than those lying inside. In the 1990s, because of low oil prices, employee numbers were drastically reduced. Conversely, in the last 5–6 years, the trend has changed, and an enormous part of the young work force has been acquired to reduce the gap created in the previous decade. This is both the cause and the solution of the problem. If young professionals of today have a lot of possibilities inside the company, it is also t rue that there is an enormous amount of opportunity outside.

The survey comments point out that this young generation feels the strong need to be recognized as unique, important individuals and to have potential career paths clearly expressed by their companies. There is probably a big cultural difference between our generation and the company’s leadership generation. Today’s young professionals want it “all and now”; the spirit of sacrifice and patience is less in respect to the 1970s and 1980s. Young professionals are often discouraged that it takes so long to receive recognition and responsibility within the company. At the same time, it is true that today’s leaders had the same problems with fewer opportunities. What is the solution to change the trends in Fig. 2 and increase loyalty to the company? In the oil business, intangibles are a critical factor and an important source of competitive advantage. People are an important, if not the most important, strategic asset. Based on data from about 750 companies worldwide, Watson Wyatt demonstrated in 1999 the direct link between the Human Capital Index and company financial performance.1 It follows that companies must focus on talent retention, which goes hand in hand with job satisfaction. It does not matter how bright the company strategy is if people are not well motivated to follow it. The key is to keep and reward a talented work force while aligning people with the business strategy. Companies should treat their employees with the same attention they reserve for their customers. Faithful and satisfied employees are as valuable as faithful and satisfied customers. It is well known in marketing that it is more difficult to retain customers than get new ones; the same applies in the relationship between the company and its employees. It is hard to correctly manage the balance between customer/employee expectations about what the company could offer and the perceptions of what the company actually offers. The balance is complicated by two opposite needs: the employees’ request to be recognized and the company’s need to be impartial with its employees. A key step may be building a long-term “win-win” relationship between employee and company based on the principle of mutual loyalty. To conclude, it becomes more and more critical for companies in the oil business to pay closer attention to young talented employees’ satisfaction and motivation, remembering that today’s young professionals will be the industry leaders of tomorrow. Many companies are already champions in this regard, but these statistics point out that there is room for improvement.

Question 2: Do you feel happy about your current job situation? Consider the following items: job interest, job environment, potential career, salary, and private life management.

By nationality or company size, job interest and job environment received high scores (Fig. 3). Salary and private life management are the most critical parameters, and the average score was about 6. Grouping the data by company size shows that satisfaction about salary and private life management is, as expected, higher in small companies despite reduced satisfaction about job environment. Analysis by nationality indicates that average satisfaction is highest among Americans and lowest among Europeans. Within Europe, there is a big difference among countries, especially in terms of salary and potential career. Following are some of the comments from respondents.

Salary:

• “It is acceptable only on expatriate status. The company pushes you to work abroad to get acceptable and competitive salaries.”
• “It is good at the beginning; later there are too many differences between companies. Attention to the job market is a must for young employees.”
• “Very secretive issue; not discussed amongst colleagues, and not crystal clear salary distribution within the company. Emphasis on years of experience versus individual potential sometimes seems overrated.”
• “I feel a slight mismatch between my responsibilities and current remuneration. Bonus goes always to mid- and upper management, and nobody complains that most of the massive work is done and already significant decisions are taken at lower levels.”

Private life management:

• “My manager makes sure that when I go home my tank is still half full.”
• “Awful since company is not yet willing to also feel responsible that private life fits into work life; in service companies, not much considerations for family issues.”
• “This is the largest problem I and my coworkers have with our current situation. The excessive traveling, the number of hours we work per week, and the strange locations the work is performed in do not lend them- selves to much of a private life.”
• “It is impossible having a good and satisfactory private life working in the oil and gas industry because complete availability on moving is a must at every time in every place if you want to grow fast; this kind of life would be suitable only for a single person. The oil business is designed for singles.”
• “Times have changed from when the wife would follow the husband. Nowadays, both man and woman have their own career, and having two international careers will be a struggle even if both are working for the same company. The time that your partner is happy to stay home all day to take care of the kids is really over now. Unless this issue is solved, many young engineers will leave the industry after a couple of years.”

Potential career:

• “Some possibility seen because of the aging work force, but nothing sure and no clear plan foreseen for me.”
• “Career possible only if you accept to move endlessly from one location to another. This does not fit at all with family issues. Family sacrifices are poorly remunerated. However, moving is a necessary but not sufficient condition for career.”
• “From my experience, while in service companies the steepness of the career curve really depends on your effort and capabilities, in oil companies career seems driven more by other factors not clearly understandable.”
• “I feel like a small fish in this big company; my daily efforts are not considered correctly. This is frustrating. Human resources does not perform its work adequately.”
• “Big company means more opportunity but much more difficult to achieve.”
• “As someone who aspires to a business manager role, it is frustrating to see a total lack of movement in the management ranks and outlandish expectations for years of service prior to promotion. I see limited career opportunities, because of ‘old school’ habits.”

Analysis: Most of the comments were related to the difficulty of combining private life with work along with dissatisfaction with the lack of attention companies pay to employees at the lower levels, where most young professionals are. The results indicate that strong retention policies should look carefully at the difficult combination of these three factors: flexible salary based on performance, carefully thought out career plan, and attention for private life issues. In the short term, travel is an important success factor for oil companies in attracting young employees; in the long term, the continuous request for flexibility and mobility becomes critical and a point of weakness for retention. Often, traveling possibilities are given only after certain years of experience, which is when young professionals start to think about creating a family with all the related stability needs. The link between career and mobility should be smoothed; mobility should not be the condition for career success.

Question 3: In the long term, do you want to become either a technical expert or a business manager? Explain briefly the reason.

The data grouped and analyzed for geographical area, company size and type, gender, and work experience indicate that roughly two-thirds of the respondents would like to move with time from the technical side to management. Only 10% do not have a clear idea about their preferred career.

Americans and young professionals in small companies have a larger preference for management positions (Fig. 4). This may be linked to the fact that these two groups are more satisfied with their current job situation, especially in terms of potential career opportunities and salary. It is interesting to note that young professionals with more work experience have a lower preference for business positions. This may indicate that, with time, enthusiasm wanes. Despite the larger preference for business positions in the long term, young professionals pointed out interesting reasons for being on both sides of the picture.

Reasons for becoming a “technical expert”:

• “Industry will rely more and more on specialists (with some managerial skills). In the future, technical experts will be more valuable to the market compared to business managers.”
• “No desire as yet to become a manager as I feel I have more to contribute on a technical level. Perhaps also the perception that in the future technical people will be in more demand and will be a more valuable asset for the company and hence rewards will be better.”
• “I feel that the best managers in our industry are those who have technical expertise in their chosen discipline. I would be uncomfortable running the business without knowing the why, how, and what of the situation I was managing.”
• “If you are a manager you have more responsibility and stresses but don’t necessarily get paid more than the consultant technical people you manage. Also, the company has more control over you and you tend to be at its beck and call. I cannot see the plus to being a manager in this industry.”

Reasons for becoming a “business manager”:

• “I love technical work, but in the oil business, at least in the major oil company I’m employed in, technical experts are not rewarded accordingly.”
• “More responsibility, money, recognition inside the company. For intangible recognition outside the company, SPE offers great opportunities for technicians.”
• “I am better at seeing the big picture and working with people than getting wrapped up the details of technical work. I see many challenges in giving guidance.”
• “It will give me enough flexibility to diversify into other industries–a change to secure a better future for myself.”

Analysis: It is important that 90% of the respondents already know what career path they want to follow. That is the starting point for success. The respondents’ reasons indicate that there is high potential for success in both career directions. Those who want to hold management positions in the long term should not rush to leave the technical side, since a strong technical background is a must for being an excellent manager. However, it is crucial that companies pay attention not only to technical aspects but also to soft skills to help employees exercise leadership and deal with business issues and policies that contribute to corporate success and profitability.2

Young professionals expressed a need to be professionally and personally recognized by the company. In addition, they expressed their strong will to become managers and assume high responsibility roles.

Question 4: After how many years did you start to have a position of responsibility in your company?

Analysis: The current trend in the oil industry is to give responsibility positions after an average of 3 years (Fig. 5). The time required for Europeans is almost double that for Americans. These results confirm the results in Figs. 2 and 3, indicating that the average degree of satisfaction and potential career perception are generally higher for Americans. As expected, the larger the company size, the longer the time needed to obtain greater responsibility. This is in line with the fact that in large companies, despite the larger number of opportunities, it is more difficult to be recognized. However, the slower career progression in large companies is the price to pay for higher job stability.

Question 5: Why did you join the oil and gas industry?

Some of the responses are listed below.

• “It is a multinational industry with a lot of topics (both technical and business) and many different career opportunities.”
• “It is a very interesting business that has a bearing on nearly all individuals in the world. The industry is very international, so I believed it will allow me to travel with my work and meet plenty of new people.”
• “The industry allows me to work on capitally large engineering projects with good funding to investigate worthwhile scientific projects, to travel to other countries often, and also to be paid reasonably well compared to other engineering disciplines.”
• “I joined the petroleum industry because I believe that the rapidly increasing average age of the petroleum geoscientist offered excellent opportunities for newcomers to the industry. The fears of dwindling oil reserves in the face of increasing global demand seems to be driving students from the industry, in the fear that it won’t survive their careers. I am personally comfortable in the belief that petroleum will continue to be a major commodity beyond my working years. The combination of the first two points therefore suggests there will be a vacuum of professionals in my chosen field, with an attendant increase in the demand for my skills.”
• “Exciting capital project to work on with many technical challenges to overcome.”
• “The best thing about working in the oil industry is the interaction I have with a large cross section of people from different backgrounds and how that interaction leads to the resolution of complex problems.”

Analysis: From the answers, it appears that the critical factors that attract young people are:

• Higher salary compared with other engineering disciplines.
• Multinational and multicultural aspect.
• Travel possibilities.
• Career opportunities because of aging work force.
• Many different career opportunities within each company, with possibility to differentiate in different subjects.

Question 6: What worries you about working in the oil industry? Why?

Here are some of the comments:

• “It worries me that the average age of SPE members (and I assume representative of the rest of the industry) is about 50 and nothing is being done to pass their knowledge to younger engineers who are expected some day to fill their shoes.”
• “Its bad image and reputation. The interests behind the oil market are one of the most critical causes of war. External perception about the industry will make it harder to do business. Also, the industry does not recruit enough new talent or put them in a position to make a difference early enough.”
• “The oil industry has enormous power and influence on economics and world politics. I am not worried about me or my job, but the future of the energy market, world consumption patterns, and the short-term strategies of the major oil companies are really frightening, and we are more and more dependent upon the least politically stable regions of the world.”
• “The effect this industry has on the environment. The way we currently live and work is not conducive to an infinite life of the planet (although the planet will die of its own accord eventually). While we are working toward hydrocarbon production in a more environmentally friendly manner, the extraction of a resource from the Earth at a much faster rate than the resource is being produced cannot continue indefinitely and must have an adverse effect on the planet makeup.”
• “Private life management in the long term. The extremely high mobility every time and everywhere. Now I’m settling down with my family, and the interest in traveling/international assignments has dropped considerably. Future employment, because it will be increasingly difficult to find new gas and oil fields in my home country, and I have found myself less and less inclined to go abroad now that I have a family. When projects end, and opportunities in a certain area are no longer available, many people and their families are either out of work or relocated to other places. Is very difficult to be far away from your home for several periods of time.”
• “Security of supply. There is a lot of oil and gas available to be produced for the market, but often in areas of dangerous politics. I am worried for my safety (and that of my family if I take them) to enter these countries for work.”

Analysis: Most of the comments were related to:

• The industry’s image and reputation.
• The link between oil, politics, and war.
• Environmental concerns.
• Long-term health of the industry (in particular for small-sized companies).
• Private life and dual career management/relocation policies.
• Personal safety in dangerous countries.

Apart from the private life management issues, most of the concerns are related to business ethics and corporate social responsibility issues. This points out the interest of young professionals in soft skills such as ethics, health, safety, and the environment, values that sometimes come in second place in respect to profit in the oil industry of today. Recent studies3 demonstrate the link between corporate performance and indices related to ethics, the environment, diversity, and community. It is encouraging that the future leaders of tomorrow recognize today the great importance of these themes.

The Way Ahead to the Next Forum

This first questionnaire was aimed at investigating perceptions about current job situation, future perspectives, and career paths. The responses were enthusiastic, indicating that oil industry young professionals are keen to make their statements and opinions heard. The editors thank all those who answered the questionnaire. Future forums will continue the discussion about the job market, leadership and organizational roles, diversity, and corporate ethics.

References:

1. http://www.watsonwyatt.com/research/reports asp.
2. Cunha J.C. et al.: “Petroleum Engineering Education: Challenges and Changes for the Next 20 Years,” paper SPE 90556.
3. Fadul J. et al.: “Business Ethics, Corporate Social Responsibility, and Firm Value in the Oil and Gas Industry,” paper SPE 90701.