And, it is more complicated than we first thought! It is not just a shortage of workers that the industry is facing, it is going to be a shortage of managers. In a recent analysis, Russell Reynolds Associates, a global recruiting firm, pointed out that 61 percent of senior energy leaders are over 52 and nearing retirement. The next generation is much smaller: 27 percent of senior leaders are 44 to 52.
In recent years AAPG has monitored the bimodal age distribution of our members, which mirrors the overall upstream petroleum industry–the chart above is from Paul Weimer’s Explorer President’s Column in May 2012. He, and others, recommended that AAPG recruit new members to succeed the Baby Boomers, and AAPG has been successful in growing its total and especially its younger membership.
Consistent with this trend, the Bureau of Labor Statistics also reports a significant, 71 percent, increase in oil and gas extraction workers from January 2004 to January 2014–the numbers are 119,800 and 205,300, respectively.
But, hiring younger workers does not directly address the manager shortfall. A few observations and recommendations from experts:
- Russell Reynolds Associates recommends establishing talent metrics to accurately identify the retirement profile for each type of expertise then develop the knowledge and expertise to address the specific shortfall.
- The firm also suggests looking outside for talent. Anecdotal evidence suggests that many petroleum geoscientists choose a second geological career after retiring from one company or organization. Thus the total industry pool of experienced scientists and managers may not decline as much as expected.
- Bureau of Labor Statistics confirm that seniors continue to work. Data show that workers over 65 years of age are a larger percent of the civilian workforce in 2014 (23 percent) than in 2004 (20 percent).
- The federal government is growing its partial retirement offerings to retain experienced workers as part-time professionals, and facilitate knowledge transfer to the next generation.