Forum

The Job Market in the Oil and Gas Business

Loris Tealdi

A questionnaire was sent to all active young professional local section leaders worldwide (Italy, The Netherlands, Aberdeen, Delta, Gulf Coast, Vienna Basin, Norway, Australia, and Malaysia) and distributed to all young professionals contributing to these sections (both SPE and non-SPE members). The response was enthusiastic, and it is clear that the industry’s youth are keen to make their statements and opinions heard. Fig. 1 shows the respondents’ demographics.

Survey population
Fig. 1—Survey respondent demographics.

 

The questions were aimed at investigating how young professionals feel about their current jobs and what they think about their potential career prospects and their stability in their current company. The tone of the questions was deliberately provocative in order to favor discussion and open the door for further discussions in the next Forums.

Question 1: Do you see yourself in the same company in 2, 5, 10 years’ time? Explain briefly the reason.

The general trend is very clear and can be observed in Fig. 2. The percentage who believe they will remain with the same company (“Yes”) decreases with time linearly, passing from 90% in the next 2 years to about 20–30% in the long term (10 years). Only 15–20% (mostly those with less than 3 years of working experience) do not yet have a precise idea (“?”) of their future in the company.

Do you see yourself in the same company in 2, 5, 10 years’ time?
Fig. 2—Answers to Question 1 grouped by (A) complete data, (B) company size,
(C) work experience, and (D) geographic area.

 

To better understand the reasons behind this answer, data were grouped by company size, work experience, and nationality. The results show that in small companies, the degree of loyalty is lower than in medium- to larger-sized companies. This could be linked to a higher degree of uncertainty about the company’s future performance. It is significant that there is a gap based on work experience. At the beginning of the career (3 years or less in experience, 41% of respondents), there was more confidence in their companies both in the short and in the long term. As length of experience rises, the degree of satisfaction and the initial enthusiasm drops sharply. Geographically and culturally, the most critical trend is observed in Europe. Some of the responses included:

Analysis: In the job market of today, concepts such as “long-term loyalty” and “trust the company” have disappeared. Only 2% of the respondents expressed their will to remain within the company until retirement out of loyalty. Nowadays, young employees are often more aware of opportunities outside their company than those lying inside. In the 1990s, because of low oil prices, employee numbers were drastically reduced. Conversely, in the last 5–6 years, the trend has changed, and an enormous part of the young work force has been acquired to reduce the gap created in the previous decade. This is both the cause and the solution of the problem. If young professionals of today have a lot of possibilities inside the company, it is also t rue that there is an enormous amount of opportunity outside.

The survey comments point out that this young generation feels the strong need to be recognized as unique, important individuals and to have potential career paths clearly expressed by their companies. There is probably a big cultural difference between our generation and the company’s leadership generation. Today’s young professionals want it “all and now”; the spirit of sacrifice and patience is less in respect to the 1970s and 1980s. Young professionals are often discouraged that it takes so long to receive recognition and responsibility within the company. At the same time, it is true that today’s leaders had the same problems with fewer opportunities. What is the solution to change the trends in Fig. 2 and increase loyalty to the company? In the oil business, intangibles are a critical factor and an important source of competitive advantage. People are an important, if not the most important, strategic asset. Based on data from about 750 companies worldwide, Watson Wyatt demonstrated in 1999 the direct link between the Human Capital Index and company financial performance.1 It follows that companies must focus on talent retention, which goes hand in hand with job satisfaction. It does not matter how bright the company strategy is if people are not well motivated to follow it. The key is to keep and reward a talented work force while aligning people with the business strategy. Companies should treat their employees with the same attention they reserve for their customers. Faithful and satisfied employees are as valuable as faithful and satisfied customers. It is well known in marketing that it is more difficult to retain customers than get new ones; the same applies in the relationship between the company and its employees. It is hard to correctly manage the balance between customer/employee expectations about what the company could offer and the perceptions of what the company actually offers. The balance is complicated by two opposite needs: the employees’ request to be recognized and the company’s need to be impartial with its employees. A key step may be building a long-term “win-win” relationship between employee and company based on the principle of mutual loyalty. To conclude, it becomes more and more critical for companies in the oil business to pay closer attention to young talented employees’ satisfaction and motivation, remembering that today’s young professionals will be the industry leaders of tomorrow. Many companies are already champions in this regard, but these statistics point out that there is room for improvement.

Question 2: Do you feel happy about your current job situation? Consider the following items: job interest, job environment, potential career, salary, and private life management.

By nationality or company size, job interest and job environment received high scores (Fig. 3). Salary and private life management are the most critical parameters, and the average score was about 6. Grouping the data by company size shows that satisfaction about salary and private life management is, as expected, higher in small companies despite reduced satisfaction about job environment. Analysis by nationality indicates that average satisfaction is highest among Americans and lowest among Europeans. Within Europe, there is a big difference among countries, especially in terms of salary and potential career. Following are some of the comments from respondents.

How do you judge your current job situation?
Fig. 3—Job satisfaction by geographical area and company size. Each driver is ranked from 0-10.

Salary:

Private life management:

Potential career:

Analysis: Most of the comments were related to the difficulty of combining private life with work along with dissatisfaction with the lack of attention companies pay to employees at the lower levels, where most young professionals are. The results indicate that strong retention policies should look carefully at the difficult combination of these three factors: flexible salary based on performance, carefully thought out career plan, and attention for private life issues. In the short term, travel is an important success factor for oil companies in attracting young employees; in the long term, the continuous request for flexibility and mobility becomes critical and a point of weakness for retention. Often, traveling possibilities are given only after certain years of experience, which is when young professionals start to think about creating a family with all the related stability needs. The link between career and mobility should be smoothed; mobility should not be the condition for career success.

Question 3: In the long term, do you want to become either a technical expert or a business manager? Explain briefly the reason.

The data grouped and analyzed for geographical area, company size and type, gender, and work experience indicate that roughly two-thirds of the respondents would like to move with time from the technical side to management. Only 10% do not have a clear idea about their preferred career.

Americans and young professionals in small companies have a larger preference for management positions (Fig. 4). This may be linked to the fact that these two groups are more satisfied with their current job situation, especially in terms of potential career opportunities and salary. It is interesting to note that young professionals with more work experience have a lower preference for business positions. This may indicate that, with time, enthusiasm wanes. Despite the larger preference for business positions in the long term, young professionals pointed out interesting reasons for being on both sides of the picture.

Do you want to become a technical expert or a business manager?
Fig. 4—Career preference by company size and type, geographical area, gender, and work experience.

 

Reasons for becoming a “technical expert”:

Reasons for becoming a “business manager”:

Analysis: It is important that 90% of the respondents already know what career path they want to follow. That is the starting point for success. The respondents’ reasons indicate that there is high potential for success in both career directions. Those who want to hold management positions in the long term should not rush to leave the technical side, since a strong technical background is a must for being an excellent manager. However, it is crucial that companies pay attention not only to technical aspects but also to soft skills to help employees exercise leadership and deal with business issues and policies that contribute to corporate success and profitability.2

Young professionals expressed a need to be professionally and personally recognized by the company. In addition, they expressed their strong will to become managers and assume high responsibility roles.

Question 4: After how many years did you start to have a position of responsibility in your company?

Analysis: The current trend in the oil industry is to give responsibility positions after an average of 3 years (Fig. 5). The time required for Europeans is almost double that for Americans. These results confirm the results in Figs. 2 and 3, indicating that the average degree of satisfaction and potential career perception are generally higher for Americans. As expected, the larger the company size, the longer the time needed to obtain greater responsibility. This is in line with the fact that in large companies, despite the larger number of opportunities, it is more difficult to be recognized. However, the slower career progression in large companies is the price to pay for higher job stability.

After how many years did you start to have a position of responsibility?
Fig. 5—Time required to have a position of responsibility, by area (A) and company size (B).

Question 5: Why did you join the oil and gas industry?

Some of the responses are listed below.

Analysis: From the answers, it appears that the critical factors that attract young people are:

Question 6: What worries you about working in the oil industry? Why?

Here are some of the comments:

Analysis: Most of the comments were related to:

Apart from the private life management issues, most of the concerns are related to business ethics and corporate social responsibility issues. This points out the interest of young professionals in soft skills such as ethics, health, safety, and the environment, values that sometimes come in second place in respect to profit in the oil industry of today. Recent studies3 demonstrate the link between corporate performance and indices related to ethics, the environment, diversity, and community. It is encouraging that the future leaders of tomorrow recognize today the great importance of these themes.

The Way Ahead to the Next Forum

This first questionnaire was aimed at investigating perceptions about current job situation, future perspectives, and career paths. The responses were enthusiastic, indicating that oil industry young professionals are keen to make their statements and opinions heard. The editors thank all those who answered the questionnaire. Future forums will continue the discussion about the job market, leadership and organizational roles, diversity, and corporate ethics.

References:

  1. http://www.watsonwyatt.com/research/reports asp.
  2. Cunha J.C. et al.: “Petroleum Engineering Education: Challenges and Changes for the Next 20 Years,” paper SPE 90556.
  3. Fadul J. et al.: “Business Ethics, Corporate Social Responsibility, and Firm Value in the Oil and Gas Industry,” paper SPE 90701.