In spite of the layoffs and cutbacks in spending, the oil and gas industry’s interest in recruiting on college campuses for internships and full-time positions has not disappeared.
Without exception, the decline in low oil prices is prompting oil and gas companies to scale back the number of students they’re hiring for internships and jobs, Phillip Tenenbaum, global energy vertical leader with Mercer LLC, a global consulting firm focused on talent, health, retirement and investments, told Rigzone in an interview. But all the companies that Mercer works with are saying they still plan to maintain a presence on college campuses and make a small number of offers.
“The rationale is that they’ve built a pipeline with the universities and a positive reputation with the university career centers,” said Tenenbaum. “They don’t want to undo the good reputation they have on campuses by totally suspending recruitment.”
Most companies are also trying to honor offers already made, and to bring in interns, albeit fewer in number. Tenenbaum believes these efforts reflect positively on the industry.
“They understand that in the past, they had taken more drastic action, and it came back to hurt them in the longer-term.”
The current oil price downturn hasn’t changed the fact the oil and gas industry will face a shortage of talent. In the next 3 to 5 years, the industry will not only need petroleum engineers and other types of engineers such as plant and operations engineers, but geologists and geoscientists. The industry also will face a shortage of non-technical workers, such as project managers, Mercer found in a recent talent outlook and survey.
The industry knows it needs to continue recruiting college graduates and progressing them quickly through an organization’s ranks to fill the trough between older workers who are retiring and younger millennial workers, said Tenenbaum. By doing so, the industry hopes to break the cycle of having a missing generation in the oil and gas industry. A 2014 Mercer study found the industry is facing a classic double hump, with a big wave of retiring older workers, a smaller group of mid-range managers, and then a large wave of younger workers. The gap in the number of workers between baby boomers and millennials resulted from the significant industry downturn in the 1980s that deterred large numbers of Generation Xers from entering the industry.
The shortage of entry level and senior level workers seen six months ago has been pushed somewhat to the backburner because of low oil prices, but remains true today. Once prices recover, the industry will still face the fact that the number of university students pursuing degrees in STEM, or degrees in science, technology, engineering and mathematics programs, will be less than what’s needed.
Retention also will remain an issue.
“Survey after survey has found that salary isn’t the number one reason a person leaves a job, but their experience with their immediate supervisor.”
To address retention, Mercer is seeing the industry moving from a buy strategy to a build strategy. Instead of poaching talent, companies are looking to spend time getting young workers in the door to train, develop and hopefully retain them.
Tenenbaum said that industry needs to do a better job in communicating the fact that the industry is not only high-tech, but in repairing its image as an unsafe and environmentally unfriendly business. To attract college graduates, the industry is also using the lure of international travel – and the opportunity for graduates to experience the world early on in their careers – as an incentive.
UNIVERSITY VIEWPOINT ON OIL, GAS RECRUITING
Two facets exist for the story on hiring in today’s oil and gas industry, Ramanan Krishnamoorti, chief energy officer at the University of Houston (UH), told Rigzone in an interview. In conversations with industry groups and companies, the oil and gas industry says that it should keep hiring people, and has the mechanisms to keep hiring. But in discussions with individual entities, companies currently are shedding jobs, including many senior level jobs, and still honoring offers made, but aren’t making any new offers.
“It’s a somewhat nuanced position,” said Krishnamoorti. “Everybody understands that, from a broader perspective, they have to keep people in the industry and they have to keep getting people into the field and can’t lose momentum.”
Companies are grappling with having expensive talent on their payrolls, many of whom are older workers wanting to retire. These workers will need to be replaced, but the downturn in oil prices have made them reluctant to hire, except for certain positions. With a large number of offshore projects placed on hold, companies are laying off workers, but trying not to lay off so many that they can’t resume operations when things improve.
“There’s a lot of tension at this point,” said Krishnamoorti of the industry.
However, the expectation is that the downturn will be short-lived.
Despite the current layoffs and more cautious approach on hiring, Krishnamooriti said the industry will still have future talent needs beyond the downturn. And Krishnamoorti still sees big demand for people in the areas of supply chain and safety as well as areas of technological innovation.
Oil and gas companies are still interested in recruiting on college campuses, but instead of looking for reservoir engineers and production engineers, they’re looking for students with degrees and skills to help companies get the most out of production data and to operate safely.
Companies are also looking for college graduates who are not just experts in one area, but can understand the holistic picture of where the industry is going.
“People who can look at the whole value chain will become increasingly invaluable,” said Krishnamoorti.
For innovation roles, Krishnamoorti sees demand for new interns and college graduates with petroleum and mechanical engineering backgrounds, as well as backgrounds in chemistry, physics and nanotechnology. Krishnamoorti also sees future demand for college graduates in areas such as Big Data and cybersecurity.
Despite the layoffs, times such as these offer opportunities to bring in a variety of different talents, and for companies to make step changes versus incremental changes, Krishnamoorti noted.
To ensure that students are not just experts in one rabbit hole, UH has adjusted its curriculum to include a variety of different minors for students, such as supply chain, and an integrated program for a bachelor’s of science degree and a masters of business administration. This will allow students to better understand the business as a whole.
Despite spending cutbacks and layoffs due to low oil prices, middle-skills employees will still be in demand in oil and gas. Dr. Melissa N. Gonzalez, vice chancellor-workforce and economic development with Houston-based Lone Star College, told Rigzone that the spending cutback resulting from low oil prices means that oil and gas companies will rely on older equipment, creating demand for welders, electricians, machinists and drivers.
“Many companies often use downturn periods to cross-train current employees,” said Gonzalez. “Also during the downturn, workers return to college to get retrained and add new skills to make themselves more attractive to companies.”
COMPANIES ‘SHOULD ALWAYS BE ON COLLEGE CAMPUSES’
Even with low oil prices, BHP Billiton Ltd.’s position is that it should always be on college campuses recruiting future talent.
“We recognize that the industry as a whole has an aging workforce,” said David Purvis, vice president of engineering with BHP, in an interview with Rigzone.
BHP is experiencing an attrition rate of workers similar to the level occurring across industry as a whole. To offset this attrition, BHP seeks to bring in top quality talent not only in technical roles in engineering and geoscience, but health safety and environmental roles, data management, human resources and supply chain.
Purvis told Rigzone that it takes a long-term approach with its talent recruiting strategy. That strategy focuses on recruiting interns from universities and converting those interns into employees once they graduate.
Through its intern program, students are exposed to a mix of challenging field work assignments and formal training through lunch-and-learns with executives, weeklong sessions to learn about the company’s culture and history and training in soft skills such as presentations and teamwork. At the end of the summer, the interns give a presentation, outlining the project they pursued during their internship.
Interns from BHP’s petroleum and coal-based operations in the United States are brought together for formal training events, which allow interns from various disciplines to learn to work together and learn from each other. While understanding the overall business energy landscape is important, Purvis stressed the importance of interns building a strong foundation in their chosen field.
The company sees its recruiting approach as an extended interview process, in which BHP determines if the students have the background they need. It also gives students a chance to interview BHP and see if the company and its culture are a fit for what they’re looking for. For this reason, the company likes for college students to intern at BHP for a couple of summers.
In 2015, BHP will have 55 interns joining BHP for the summer. Last year, BHP had 60 interns in its program. Purvis estimates the number of interns next summer will likely be around 50. The background of its interns is more heavily weighted towards technical areas; about one-third of its interns have non-engineering backgrounds.
“As we engage with our employees at this time, particularly our junior employees who haven’t lived through a price downturn,” Purvis said, “The company emphasizes the importance of building a good foundational skillset and doing good work.”
“If you have good commercial skills and you’re delivering quality work for the company, the concerns over price volatility should be less relevant,” Purvis said.
INDUSTRY STILL INTERESTED IN COLLEGE INTERNS, GRADUATES
Oil and gas major BP plc and the wider energy industry is adapting to market changes which requires it to adjust plans and resources in line with operating realities in order to remain productive and competitive, a BP spokesperson told Rigzone.
“Our commitment to graduate and internship hiring remains, however it’s necessary for us to adjust intake and other related spend in line with this environment. We remain committed, today and tomorrow, to supporting the ongoing development of the energy industry’s talent.”
“While this challenging economic environment has required us to make some difficult decisions, we will honor our commitments to our interns during 2015 and provide them with a challenging and positive experience while at ConocoPhillips,” a spokesperson for ConocoPhillips told Rigzone in an email statement. “In addition, ConocoPhillips will honor outstanding job offers that have been made to graduating university students.”
Despite the current oil price environment, Exxon Mobil Corp. continues to have an active campus recruiting program, a spokesperson told Rigzone.
The company also is involved in a number of initiatives to encourage students to pursue careers in STEM. In February 2015, ExxonMobil reported it would encourage girls to pursue STEM careers through its 12th annual “Introduce a Girl to Engineering Day” program, which will be held over several months this year at 14 ExxonMobil and XTO Energy sites nationwide. More than 2,000 middle-school girls across the United States are expected to take part in the program, which builds on the success of ExxonMobil’s “Be An Engineer” efforts.
ExxonMobil launched the “Be An Engineer” Program in 2014 to highlight the real-life engineers behind some of the world’s greatest technical achievements and provides resources to encourage students to choose engineering careers.
A Royal Dutch Shell plc spokesperson said the company’s current university recruitment targets have not been impacted by fluctuations in oil prices, and that graduate career opportunities at the company remain healthy.
Chevron Corp. also continues to hire both new college graduates and interns. The company’s intern program has been recognized by Glassdoor as among the 25 highest-rated companies for internships in 2015, ranking number 2 behind Facebook.