The hotly debated “skills gap”—the mismatch between workers seeking jobs and the skills employers actually want—may be trickling down to the booming energy sector.
The dynamic, dissected at length at the national level in the context of a weak job market, is a growing source of concern for U.S. energy producers, according to two new reports. As the country churns out record levels of oil and gas, the findings suggest oil companies are increasingly concerned about the quality of the applicant pool for jobs that are integral to fueling the shale boom.
Recruitment company Manpower, which expects the number of U.S. energy-related jobs to nearly double to 3 million by 2020, found in a survey that 72 percent of oil and gas executives cited an “inability to attract quality candidates” to their jobs. A “double squeeze” of both entry-level and top-ranking talent may cost the United States jobs and productivity, the study found.
Because of an energy boom that has sent U.S. oil production to its highest in nearly 40 years, “more skills are needed today than just five years ago,” said Jorge Perez, Manpower’s senior vice president, who assisted in the report’s findings.
Oil companies believe “if we don’t have enough from the people … energy production won’t be done as fast or efficiently as it could otherwise,” Perez added in an interview.
The skills mismatch is a pressing problem because the U.S. is projected to surpass Saudi Arabia and Russia as the world’s largest producer of oil and natural gas. Meanwhile, salary isn’t a sticking point. Because of the labor and risk involved—as well as the size and scope of the U.S. boom—pay in the sector is far more competitive than in previous years. In North Dakota’s Bakken region, for instance, compensation can easily top $100,000.
Manpower called the state of affairs an “energy workforce crisis,” warning about a breakdown between the energy sector and the education required to staff it.
According to its findings, 58 percent of energy executives say they are struggling to find the talent they need, and nearly three-quarters expect the problem to intensify as the boom picks up speed.
Manpower’s study echoed data compiled by human resources firm Mercer, which looked at the talent shortage in a comprehensive study of the oil and gas industry last year.
In a report also released this week, Mercer said the skills gap was driven by “more complex technologies, an aging workforce in certain regions and occupations … and unconventional plays requiring new staffing models.”
More specifically, Mercer found that the shortage is particularly acute among petroleum engineers, plant operators, geophysicists and project managers. The firm found that the U.S. ranks third, behind Asia and Canada, as the region facing the biggest threat from a lack of manpower.
Changing the ‘cool factor’
The reasons for the dearth of qualified job candidates are varied. Both Mercer and Manpower cited age, disruptive technology like hydraulic fracturing and education as key drivers of the problem.
The latter, however, is the subject of much controversy. Critics of the skills gap argument say it’s often used as a cover for companies to ship jobs to low-wage workers overseas. Others argue that if U.S. companies need highly specific skills, they should train people for them.
Manpower’s Perez said that most companies are loath to ship jobs offshore, however, because they’ve simply become more expensive. A hallmark of the U.S. manufacturing renaissance is that the energy boom has helped make labor-intensive sectors cheaper than a decade ago, Perez said.
Manpower calls energy companies, government and educational institutions to work together to promote the sector and provide job opportunities.
Perez said he believes a helpful model could be replicated from old-line manufacturers. Automakers, for instance, were known to use in-house “colleges” and specialty institutes to train and advise workers.
“We need to think about how we reposition the ‘cool factor’ of technical jobs” like oil and gas, Perez said. “The energy sector is a great environment to work. … [They’re] not the dirty, bad jobs we sometimes think of.”
—By CNBC’s Javier E. David