Oilfield Job Recovery Uneven/Are Employers Unprepared?

The surprising news in Houston in the past week was that Hess Corp. plans to cut about 300 jobs in its quest for profitability.  Despite that the overall prospects for oilfield jobs is good.  According to Bloomberg,  oil and gas employment in the U.S. had dropped by more than 160,000 after the 2014 bust, but has now climbed by 45,000.  

The Federal Reserve has also predicted that overall Texas employment will increase by 3% in 2018, with 75,000 jobs added in Houston alone if oil stays above $60 a barrel. 

Keep in mind how devastating the downturn was to jobs.  A safety analysis by the International Association of Oil & Gas Producers, IOGP,  showed that hours worked in oil and gas world-wide, a key indicator of jobs, fell by one-third during the bust.  The drop-off was especially harsh in the exploration and drilling side of the business and, if the IOGP number are correct, in North America employment fell by more than two-thirds.  Since most of the work done on location is done by contractors, most of the layoffs came to the contractor community.

Four reasons why ramping back up is not going to be easy.

  1. New Hire Risk  – The Hartford Insurance Company estimates that injury rates are 4-6 times higher during a worker’s first month on the job and the most significant factor in higher workers comp costs is whether the worker is in his first year with the company.
  2. Brain Drain – We’ve lost a lot of expertise.  Lost expertise is likely to equal less quality and more accidents.
  3. Shrinking Management – Most companies have gotten pretty thin on management and administrative support.  Now they are focusing on their immediate needs, putting new hands in the field.  That leaves them vulnerable on safety, quality and job training.  A lot of that will be left to field supervisors who may be new to their roles as well.
  4. Lean Contracts – Even as they ramp up, operators know they can’t let costs escalate. Many contractors just need the work.  Together that means there won’t be a lot of money to attract top talent.

Let us help you get ready for the boom.  Lifeline Strategies can help with services or training for:

  • Safety programs/Gap analysis to avoid accidents
  • Supervisory leadership to make sure your front line managers are prepared
  • Competency plans to hire and promote the right people
  • Operating procedures to guide new hires in their work

We’ve prepared a handy checklist of things you need to do to manage hiring in the upturn.  Contact us at info@lifelinestrategies.com to talk about your needs or to get a copy of our checklist.





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