The oil industry is fighting a generation gap.
Already contending with a global price slump, U.S. explorers are also grappling with the demographic hangover of the last great industry downturn in the 1980s, when scores of drillers went out of business, Bloomberg News reports. That rout drove a generation away from the business, leaving a shortage of workers in their late 30s to 50s today just as companies try to replace the Baby Boomers who make up much of senior management.
What the industry calls the Great Crew Change—the looming retirement of thousands of older workers—has companies trying to plug the gap by training younger employees, recruiting outside the industry and enticing veterans to hang on longer. It has also forced drillers into a delicate balancing act amid the current downturn, as they lay off thousands, but try to hold on to hard-to-replace scientists and engineers.
“Everybody that’s going through the process of downsizing their business right now is faced with this extra complication,” Robert Sullivan, a management consultant for New York-based AlixPartners, tells Bloomberg News. “Decisions that get made right now on how you right-size the company are going to have a huge impact when the market turns.”
Employers have spent years trying to prepare. Baker Hughes Inc., the oilfield services company, runs a mentoring program for young engineers. Exxon Mobil Corp. has spent about $2.6 million on workforce training initiatives in the Gulf Coast over the last decade, Bill Holbrook, a company spokesman, says. It has also sponsored ad campaigns to entice more Americans into engineering careers.
The wave of retirements comes as the oil sector is already bleeding talent. Worldwide, oil and natural gas companies have cut more than 350,000 jobs since crude prices started to fall in 2014, according to a May report by Houston-based consultant Graves & Co.
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