US oil and gas industries set to face challenges in near future

US oil and gas industries set to face challenges in near future

According to U.S. Energy Information Administration, by the end of 2013 the United States is forecasted to surpass Russia and Saudi Arabia in production of petroleum and natural gas hydrocarbons and become the number one producer of oil and gas globally.

 

This has resulted in the dramatic demand for the expansion of the nation’s energy workforce, which has already experienced a 41 percent increase since the end of recession in July 2013, as the Bureau of Labor Statistics declared.

 

The increased energy demand requires accordingly increased labour. For the next two years, four recruiting trends have been identified that will keep negatively affecting the industry as well as corporation bottom lines and the energy market.

 

The four recruiting trends are listed below.

 

  1. Boom in the energy industry: the demand for drilling operations is increasing with the rising oil prices (in excess of $100 per barrel). In 2012 2.1 million jobs in the energy sector were added to the U.S. economy and are predicted to increase to 3.3 million by 2020.

 

  1. Shortage of talent: Increase in the demand for energy and enlargement of operations to exploit new opportunities has led to an increase in the demand for professional engineers. U.S energy industry estimates that by the end of this decade there will be a need for at least another 5,000 engineers.

 

  1. Aging of workforce: Due to the low oil prices in 1980s, the experienced workforce in the industry is generally older and nearing the retirement age, which exacerbates the current pressure to the talent shortage and increases concern of the loss of knowledge and experience in the near future. It has been calculated that 50% of the current workforce will retire within the next 5-10 years.

 

  1. Emphasis on safety: Owing to the history of recent incidents, oil and gas companies are working on improving the reputation of the industry by developing stricter regulations focusing on safety and corporate responsibility. Overall, the energy industry has over 1 million employers nationwide and makes up more than 4% of the GDP.

 

 

A challenging market for employers is emerging in which costs are rapidly growing and new resources are being discovered.

 

"These four trends are global with talent being shifted throughout the world to fulfil the demand and support of these operations," remarked Adam Berk, Principal, Human Capital, Performance & Reward at Ernst &Young to Rigzone.

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