Oh ... My ... Gosh!
The world economy is in a mess and oil prices have dropped more than $100 a barrel – $100, can you believe it?! – and jobs are disappearing everywhere.
Houston economist Barton Smith said that city alone could lose 37,500 jobs.
But if oil and gas prices fall even further the job losses will be worse, said Smith, director of the University of Houston’s Institute for Regional Forecasting.
And some predictions say oil prices will fall another 40 percent!
It’s the end of the world!!!
Okay – now everybody calm down.
Take a deep breath and think about this:
From a hiring standpoint, the industry is actually better off today.
For the past year oil companies have been scrambling to find new technical hires, without much luck.
With oil prices over $100 a barrel, the industry was running out of recruits.
There just weren’t enough experienced, capable people to fill the hiring need.
“For the most part, what I’ve heard out of companies is that they’re already running so lean they can’t afford to lay anybody off,” said Mike Ayling of MLA Resources in Tulsa.
Ayling has provided industry and employment data to AAPG and the EXPLORER for nearly 25 years, including the annual salary survey.
His view of today’s industry: We’ve gone from a situation with a huge deficit of technical professionals to one where expertise and job openings are more in balance.
“What I have seen, and it’s really varied, is that a couple of companies have told me they wouldn’t be hiring until after the first of the year,” Ayling said.
“Out of all my clients, only one company said they aren’t hiring any technical people right now,” he added.
And it’s not just a matter of positions open today.
An entire generation of oil company technical staff is getting ready to retire.
“The other problem the industry has – and we’ve talked about this for years – is the demographic problem,” Ayling noted.
“Probably 60 percent of the technical people within the industry right now are within 15 years of retirement. And that may be low – it may be within 10 years,” he said. “That means there’s a huge void at the bottom that has to be filled.”
With extremely high oil and gas prices, the industry was struggling to find or train qualified personnel for current openings.
There was no way to cope with a tidal wave of retirements that will produce thousands and thousands of additional job openings.
Not to mention the competition for expertise and experience. E&P technical professionals were in short supply last August, and they will be in short supply next August.
“I would be shocked if companies are so foolish as to let many people go into the marketplace,” Ayling said.
Demand and Supply
So far, recruiters are backing up that viewpoint.
“Drilling has slowed down but G&G – the geologists and geophysicists, geoscience professionals – is in quite high demand,” said Anna Shchelokova, senior HR consultant for Worldwideworker.com in Houston.
“I don’t see any problems in the U.S.,” she added.
Worldwideworker calls itself the “world experts in energy jobs.” Shchelokova said energy-employment demand is holding steady in North and South America and Africa, off a little for Europe, Asia and the Middle East.
Drilling engineers and reservoir engineers also continue to be in demand, she said.
“People probably won’t get the job of their dreams right now, but they will definitely get something,” Shchelokova noted.
Ayling said the momentum built up by the industry and its need to continue ongoing projects is helping maintain the steady employment demand.
“Some companies have postponed some discretionary things, but a lot of what they’re doing isn’t discretionary,” he observed.
That leaves many oil companies in a hiring mood. The direction of near-term bounces in oil and gas prices, up or down, is anybody’s guess.
Longer term, after prices bottom out, the industry appears to be banking on a robust rebound.
“What I expect you’ll see,” Ayling said, “is a slow, gradual recovery over the next six months.”