HOUSTON—The so-called great crew change has been a concern for years as a large portion of the workforce reaches retirement age with few qualified workers to take their place.
Oil and gas workers aren’t merely skilled, but bring years of experience that will be difficult to replace. Within the next five to seven years, the oil and gas industry could see up to 50% of these experienced workers retire, according to a February report by the American Energy Works foundation.
Amid oil price turmoil, potential workers may now eye the oil and gas industry with more skepticism and shy away, especially as the industry has let go of thousands of workers in the current oil price downturn. Declining enthusiasm for starting a job during one of the industry’s down cycles has left experts and members of congress wondering how the energy industry can counter this fear.
U.S. Rep Pete Olson (R-Sugar Land) might have a solution—American free trade.
Exports of natural gas and, in the future, oil would make the U.S. a competitive market and help prevent would be defectors from abandoning the industry.
“That takes persistence and working together as a team—the public and private sector, the government and the industry,” Olson told attendees at a University of Houston Energy Symposium in late March.
The industry is still approaching a workforce gap as baby boomers— the generation born from the end of World War II through 1964 —reach retirement age. In 2011, when boomers began turning 65, they numbered 77 million people, according to the U.S. Census Bureau. The baby boomer generation makes up one third of the U.S. population and a large percentage of the workforce for industries in the energy sector.
With an aging workforce, the industry is facing a talent void—that is absolutely certain, said John Colborn, director of skills for America’s Future, an employer-led initiative of the Aspen Institute’s Economic Opportunities Program.
“We are starting to see it in the labor markets today—a declining labor market participation,” Colborn said. “I never thought I would see it in my lifetime, but it’s happening.”
Colborn said the decline in employment is partly due to the price downturn, but largely because of the demographics.
“As that talent leaves, we know for certain that we’re going to need to replace it,” he said.
Elaine Cullen, president of Prima Consulting Services, said as baby boomers retire, they take not only their skills with them, but also wisdom.
“Wisdom is about knowing what to do when things go wrong because you’ve seen it before,” Cullen said. “It’s not data driven. It’s experiential.”
Cullen recently co-chaired a major study for the National Academies of Science on emerging workforce issues in energy industries titled Emerging Workforce Trends in the U.S. Energy and Mining Industries. The study focused on oil, natural gas, coal, geologic carbon sequestration, nuclear, geothermal, solar, wind, and nonfuel minerals industries, in addition to government and skilled labor.
During the study, she said that people said the same thing—it takes an average of eight to 10 years for a worker to develop the same kind of expertise, this wisdom, which the baby boomers have.
The demand for workers in the energy industry at all levels will remain strong in the coming years. She added that these are high paying jobs when you compare them across the board to just about any other sector in the country.
Solutions
Colborn suggests that the future of the energy workforce is in part already working.
The workforce of 2022 will be made up of 78% of people who are already working today, he said. In order for the workers of today to have the skills required going forward, employers will need to get involved.
"We [at the Aspen Institute] actually think that employers have an opportunity to participate in this process of upskilling the American workforce and making sure that American workers have the skills they need to lend to the competitiveness of this industry," he said.
Upskilling includes:
- On the job training;
- Tuition benefits;
- Investment in credentials;
- Promotion of different kinds of earn and learn opportunities; and
- Access to support and scheduling flexibility.
Colborn said communities can contribute to the upskill of the current workforce as well.
Community colleges are a place that’s uniquely structured to be able to respond flexibly to the needs of an employer, he said.
Opportunities will begin to emerge if the industry communicates their needs to community colleges. Those are the kinds of partnerships that present win-wins for industry and for the college, he said.
“What we’ve seen over and over again when we’re working with industry and community colleges is the power of working together in terms of propelling economic opportunities to the students that are in these programs,” he said.
Collaboration between the industry and other education institutions will better prepare the new entrants to the workforce as well.
Even though the colleges and universities might say they’re preparing their students to enter the workforce, he said employers have a different viewpoint. When employers are engaged with higher education institutions they can provide critical labor market information about where they are hiring and what fits their needs.
"We certainly see when employers are engaged closely with universities, colleges and community colleges, they can provide work experience opportunities and hiring opportunities for students," he said.
Cullen recommends more research funding to better train students for advanced technology or business processes.
“The federal research dollars are drying up and industry is going to have to step in and help out with this,” she said.
Cullen also said there should be a campaign aimed at students, parents, educators and public policy makers about the importance of the energy industries to the country's economic wellbeing.
“There are a lot of challenges here,” she said. “We have a lot of opportunities, but truly the committee concluded that the future is bright if we choose to prepare for it, but that means change. We’ve got to change.”
Contact the author, Emily Moser, at emoser@hartenergy.com.