The decade long accountancy skills gap and the impact of covid 19 by chantal...
Streamline - The Talent Issue
1. STREAMLINE
1404
Global workforce
issue impacting
LNG sector
The skills gap
in completions
and intervention
personnel
JUNE2014THE FASTSTREAM MAGAZINE
03
Faststream
news
THE TALENT
ISSUE
INSIDE:
NAVIGATING EMERGING MARKETS
A CHANGING MENTALITY
2. Throughout this issue of
Streamline, we’ll discuss
various issues, trends and
challenges associated with
the global talent shortage
in the oil and gas industry
or “skills gap” as it is
commonly called.
The most obvious cause of the skills
gap is the mass exodus of the Baby
Boomer generation via retirement
and the lack of qualified talent to
assume their position and inherit their
knowledge. With science, technology,
engineering and mathematics (STEM)
professions on the rise, nearly every
sector in the global economy is
competing for talent within this shallow
pool; unfortunately there just aren’t
enough resources for everyone.
Further heightening the issue is the
rapidly accelerating technology used
within the oil and gas industry. While
this is often one of the most attractive
aspects of the industry to many
potential hires – after all, who doesn’t
want to work hands-on with the latest
and greatest technology available to
the world – it also creates quite the
challenge. It’s near impossible to stay
“ahead of the curve” when it comes
to technology’s use and application.
It seems there is a new or better tool,
system or program every week, and
it’s all STEM professionals can do to
keep their head above water.
Another factor contributing to the
skills gap is the globalization of the
oil and gas industry. While we’ve
long been operating in countries
around the world, the discovery of
new plays and insistence of foreign
governments that operators and
service companies hire local content
puts a near impossible strain on the
industry. Many countries don’t yet have
enough qualified in-country workers to
perform the needed tasks, and when
restrictions are placed on expatriate
hires, positions remain unfilled or
underutilized.
However, many companies are doing
everything in their power to bridge
the skills gap through robust learning
and development programs, university
partnerships, and
diversity programs.
Learning and
development is
critical to anyone
in the oil and gas
sector. Most would
say it is a major
factor in considering whether or not
to begin working for a company, as
learning and development programs
often lead to personal and professional
development, career advancement
and networking opportunities that
are vital to success. By engaging
in classroom, information and in-
the-field training and development
exercises, knowledge is passed from
one professional to the next, ensuring
skills and information are not lost as
one generation retires and the next
assumes a more prominent role within
the industry.
Secondly, university partnerships
are becoming increasingly popular
throughout the world. As there is no
standard curriculum for any STEM
degree or engineering discipline
globally, it’s often harder to find
qualified talent in some geographies
than others. Many global companies
are working in partnership with
universities in their key areas of
operation such as Azerbaijan,
Indonesia and others in order to
collectively create programs that
best prepare students for real-world
experiences. Often, current and more
senior employees and recent retirees
volunteer to teach these courses or
advise in the course creation process,
as their desire to see the industry
flourish does not end with retirement.
Finally, there is an increased focus
on reaching women and minorities,
who offer a wealth of opportunity and
possibility to the industry. Historically,
the oil and gas industry has been
male dominated, but great strides
have been made in the past 20 years
to achieve equitable representation
of women and minorities in the oil
and gas sector. It’s impossible for an
industry to be truly successful and
reach its full potential if a large portion
of its potential talent is left untapped.
Whether it’s internal resource groups,
high school and collegiate outreach
programs, flexible work schedules that
allow for work/life balance or company
programs and offerings like childcare
and maternity leave, companies
understand they must do what it takes
in order to attract and retain the top
female and minority talent available.
Due to the rapidly accelerating
technology and amount of drilling
opportunities around the world, the
skills gap may never completely close.
However, companies are doing what
they can to alleviate the pressure
caused by this issue, and are willing
to make big investments in people
and programs in order to accelerate
professional development and remain
competitive in this global industry.
MARK CHARMAN
FASTSTREAM GROUP CEO
2
WELCO
3
STREAMLINE NEWS
LEARNING AND
DEVELOPMENT IS
CRITICAL TOANYONE IN
THE OILAND GASSECTOR
LINKEDIN
ISNOT
FACEBOOK!
During Faststream’s visit to the
Offshore Technology Conference
we spoke to the Houston Chronicle
about the “dumbing down” of activity
on LinkedIn which sparked interest
amongst conference visitors.
The sudden surge in people posting
things such as what they had for
lunch, business quotes from famous
people or the unprofessional profile
picture represents a “dumbing down”
of the social media site designed for
business related networking.
LinkedIn is a shop window in which
you’re displaying your wares. If you’re
a job seeker make sure you list
relevant information such as the kind
of work you do, your skills and your
educational background. And when
you want to update your status, share
an interesting article. Leave the party
pictures, famous quotes and any of
the other obvious “self-promotion” to
Facebook.
BUILDINGTHE
DREAMTEAM
Faststream’s global Oil & Gas team has
grown substantially in the last quarter
with 12 new consultants added to our
teams around the globe. Faststream’s
Houston office, now based on the
Katy Freeway welcomes Whitney
Brady, Kevin Jadney, Michael Sabo,
Amanda Turner and Michael Lozano.
Warm welcomes also to: Callum
Hewitt, Zoe Symes and Douglas
Magraw who join the groups UK
headquarters. The Singapore office
welcomes Evangeline Long, Keav
Kho, Wayne Yip and Sital Mandila as
recruitment consultants and Kristian
Warner as business manager.
We are always looking for talented
individuals to join the Faststream
Group as specialist recruiters.
If you are interested in finding out
more about working for us please visit
www.faststream.com/work-for-us
AFACETO
THENAME
The most common complaint by
jobseekers dealing with a recruitment
agency is that it can be impossible to
speak to a consultant before applying
for a job, or even to discover who
is managing the recruitment for a
particular position.
We have listened to this feedback
and now all jobs advertised on
Faststream’s website are accompanied
by the consultant’s full contact details,
including direct dial, email, LinkedIn
profile and photo.
UPDATE
We’re delighted to announce the
promotion of Matt Conway to the
position of Managing Director for
Faststream’s Singapore operation.
Matt previously served as Director
of Faststream Singapore’s maritime
and oil and gas divisions, but
now takes over full operational
responsibility for the groups
Asia base.
JUNE2014
3. STREAMLINE
5
move on when a company is willing
to offer them more money or a higher
day rate for being offshore. Some
companies are willing to pay “whatever
it takes” to obtain the most skilled, but
others simply don’t have the capital or
portfolio to support this hiring strategy.
Larger service companies like
Halliburton and Schlumberger are
significantly investing in learning and
development programs that will bring
employees up to speed and develop
their skill sets in-house, but that is
still no guarantee that an employee
will choose to stay with the company
for the long term. Smaller companies
are often forced to seek talent from
oversees or forgo specific geographic
or geophysical experience in exchange
for a candidate with the right software
skills and experience.
However, salary and training costs
aren’t the only things to consider.
The increased HSE regulations in the
offshore drilling space mean the overall
cost of a well is now much higher
than originally planned, as many of
these rigs have been operational for
decades. Had employers been able
to forecast the increase in personnel
expenses and costs associated with
HSE compliance, it’s possible that
some or many of the smaller wells
with lower returns wouldn’t have been
drilled at all.
In short, today’s oilfield services market
is unlike ever before. The challenges
to properly meet the staffing needs
of offshore players are more daunting
than ever, and not just due to the
Skills Gap. Government regulation,
technological requirements, a changing
employee mindset and overall
production cost increases all play a
critical factor in shaping an industry
sector that will see a large volume of
work over the coming decade.
Many are under the
assumption that
the skills gap exists
primarily in new plays
and emerging markets,
but challenges unique
to well-established
fields, like those in the
North Sea, are also
quite cumbersome
for employers and
jobseekers alike.
The concerns in this space are multi-
layered. The first is the dire need for
an abundance of highly sought after
positions, which are in short supply.
Both Wireline Logging Engineers and
Mechanical Design Engineers are
critical within the well intervention
space, thanks to the skills needed to
properly execute and abandon wells.
Over the next decade, 800 wells
are scheduled to be plugged and
abandoned in the North Sea alone,
and the technology and expertise
required to successfully complete
these tasks are of great concern
to operators.
In addition to the experience needed
to properly plug and abandon a well,
there are also stringent government
regulations to consider. Health, Safety
and Environmental (HSE) regulations
imposed by governmental entities
present a challenge for oil and gas
companies and make having the best
talent in place even more critical.
Each day it takes to successfully
decommission a well is a significant
expense to the operator; experienced
professionals can get the job done
more quickly and in accordance with
regulation – but there simply aren’t
enough of these people to go around.
For those wells currently in the
operational phase, the technical
knowledge of downhole software
applications required to extract
hydrocarbons is highly specific to
the industry, adding yet another layer
to the staffing challenge. Thus, it
is extremely difficult to recruit from
outside the oil and gas sector, as
the software platforms required in
these operations are unique within
disciplines.
The two primary programs used by
Wireline Logging Engineers, Sondex
and Warrior, are required for wireline
logging data acquisition and analysis.
Without explicit knowledge of one of
these programs, an employee cannot
operate in an offshore environment.
Faststream has found that those with
experience in these programs are in
high demand and today command a
salary or hourly wage up to 40%
higher than even 12 months ago,
assuming individuals have at least
five years of experience.
Not only are these workers paid a
significantly higher wage, but the
change in their views on career
progression and employer loyalty
have altered in recent years, further
complicating the issue. Rather than
staying with a company for many
years and in a full time capacity, many
workers are opting to take very short
term assignments (6-12 months) and
4
PRESENTEDBYTHESKILLS
GAPINCOMPLETIONSAND
INTERVENTIONPERSONNEL
THE
JUNE2014FOCUS
4. NAVIGATING
MARKETS
The demand for energy is increasing steadily,
and to meet this demand, oil and gas companies
are entering new and untapped markets such as
Myanmar, offshore East Africa and offshore West
Australia. The 20 offshore and 10 onshore blocks
recently released by the Myanmar government is
just one example of the vast expansion of drilling
opportunities available to the industry today.
STREAMLINE FOCUS
7
the truth. Each geography in the oil
and gas space is unique, home to
its own cultures, traditions, lifestyles
and business operation styles. It’s
important that employers understand
this, particularly those who have
never before worked in one of these
geographies, and this is one area
where an experienced global staffing
firm can be of invaluable assistance.
Staffing Resources
But choosing any staffing firm simply
won’t do. In many emerging markets,
there are two options for hiring a
recruiting services agency: a local
staffing company or working with
a regional office of a global firm not
physically located in-country.
The downfall of in-country staffing
companies is that they lack the global
networks which they need to access
to properly seek and find the needed
talent. Their pool is shallow and very
limited, meaning the time it takes
to hire an employee could be much
longer than what has been allotted.
However, working with a global staffing
firm isn’t always the best option either.
Often, these firms are very broadly
focused, meaning they do not have
experience specific to and deeply in
the oil and gas sector. Anyone who
has worked in oil and gas knows that
it is a highly technical and specialized
industry; one cannot simply place
“any” engineer in “any” position.
The depth of industry knowledge
required to be successful is massive
and cannot be overstated.
With reserves in existing markets
thoroughly explored, the industry is
branching out into uncharted waters
and geographies. In the last 10
years, the number of exploration
and production projects in these
emerging markets has increased
rapidly, resulting in a sharp increase
in talent demand within an already
limited candidate pool.
Navigating promising foreign markets
presents several key challenges for
oil and gas companies, including
government regulation, limited in-
country talent, cultural nuances and
available staffing resources. If these
issues can be addressed or resolved,
the possibilities and production within
the industry are unlimited.
Government Regulation
Just as in established markets, the
governments of foreign markets are
keen for all companies operating
in their land and waters to hire
local talent. In fact, the Malaysian
government mandates that 70 percent
of workers on any Malaysian rig or
platform must be an in-country hire;
this puts a huge strain on companies
operating in new markets, where the
talent shortage is a serious issue.
Often, governments graduate their
local staffing requirements with time,
giving companies the opportunity
to get projects up and running
successfully and then allowing local
talent to take over when the time is
right. Limiting expatriate workers to
five-year contracts and refusing to
employ expatriates past a certain age
are just two of the ways governments
in emerging markets ensure local talent
is employed as soon as possible.
Limited In-Country Talent
Another issue when navigating
emerging markets is the limited
availability of in-country talent. As
there is no standard engineering
or geosciences degree program
across the globe, universities in these
countries are working hard to properly
prepare their students to perform
the tasks, analysis and management
required while working in the oil and
gas industry.
Additionally, the world is facing a
shortage of Science, Technology,
Engineering and Mathematics (STEM)
graduates on the whole, meaning
that every industry looking for these
types of graduates and professionals
– aerospace, defense, high tech and
others – are all competing for the
same limited resources. This
challenge is compounded by the
requirement to hire from within a
single country’s talent pool, and
presents a huge challenge for those
who are desperately searching to
meet current and future exploration
and production staffing needs.
Cultural Nuances
Understanding cultural nuances
is critical when working to attract
and retain talent, especially in the
Asian market. There are many great
opportunities in Indonesia, Korea,
China, Myanmar and Malaysia, and
many people mistakenly assume that a
good fit within one country and culture
will mean the same for another nearby
country – this couldn’t be further from
UNDERSTANDINGCULTURALNUANCES
ISCRITICALWHENWORKINGTO
ATTRACTANDRETAINTALENT,
ESPECIALLYINTHEASIANMARKET
6
JUNE2014
5. Each of these situations play a role in
the increase in contract employees
in the oil and gas industry, and the
biggest concern for employers is the
risk associated with contract employee
classification and insurance. The U.S.
government’s recent crackdown on
employee classification, which resulted
from the Internal Revenue Service
(IRS) and the Patient Protection and
Affordable Care Act’s (PPACA) recent
claim to be more vigilant against
companies that don’t meet contract
employee classification requirements,
means the risk for audit and financial
penalty for oil and gas companies in
the U.S. is larger than ever.
Companies that are unsure whether
they are misclassifying employees
and at risk of an IRS audit should
determine and understand the
differences between an employee
and an independent contractor by
examining the relationship between the
worker and the business. Generally,
an individual can be classified as an
independent contractor if the employer
has the right to control or direct only
the result of the work and not what will
be done and how it will be done.
To avoid misclassifying employees,
companies can enlist the resources
of a staffing firm to ease uncertainty
regarding contract employees.
Faststream helps address these
concerns by assuming the compliance
risk associated with temporary, temp-
to-hire and interim employees. By
directly employing contract workers,
Faststream assumes all risk for tax
liability, insurance (health and liability)
and benefits.
In addition to compliance risk, there is
also a liability and insurance coverage
risk for employers; with contractors,
workman’s compensation and liability
insurance policies often prohibit
companies from including their
contractors in existing policies.
Choosing a contractor employed
by Faststream gives companies the
ability to hire contractors without
worry. Faststream’s insurance policies
cover every possible scenario and are
backed by the world’s best insurance
providers. Companies also don’t have
to worry about the classification risk
of contract employees, especially as
the PPACA health laws are now being
more strictly enforced.
Conversely, Faststream also saves
money for contract employees who
under most circumstances must
provide their own insurance; given the
dangerous work performed offshore
and in the field, it’s often 1) hard to
secure coverage at all, 2) often not the
correct or sufficient coverage, or 3)
not provided by a reputable insurance
company.
Whether you are an employer
looking to fill temporary positions
with contract employees or a
contractor seeking employment,
Faststream can mitigate your risk.
For more information contact Eric
Peters at Eric.Peters@faststream.com.
STREAMLINE FOCUS
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JUNE2014
INTHEU.S.PARTOF
THECHALLENGE
WITHTHESKILLS
GAPISTHE
OVERALLCHANGE
INEMPLOYEE
ANDEMPLOYER
MENTALITYWHEN
ITCOMESTO
WORKINGONA
CONTRACTBASIS.
Currently, companies are hiring
more contractors and making fewer
permanent hires due to rapidly
changing technologies, the exploration
of new fields, a shift in employee
mindset and governmental regulation.
Each of these factors mean employers
must closely examine employee
status – 1099 independent contractor,
permanent and direct hire, etc. – and
make the appropriate classification
of personnel in order to mitigate
compliance risk.
As technologies change and
operations become more efficient,
it takes less time and fewer people
to complete a task. Therefore,
employers often seek to hire on a
contract or short-term basis so that
they can properly staff projects and
minimize downtime on the jobsite.
Additionally, the shale boom in the U.S.
has led to a boom in field exploration
and production. Contractors are
especially useful in these short term
(6-12 month) engagements and can
then move on to assess the next
potential drill site. By maximizing their
productivity and minimizing the time
on each jobsite, employers achieve
maximum productivity while employees
enjoy a new professional opportunity
quite often.
This is an important factor in the shift
in employee mindset. Employees in
the oil and gas industry are well aware
of the skills gap and know exactly how
important their skills and expertise are
– and they know employers are willing
to pay a premium for them.
By “hopping” from job to job every
6-12 months, employees can demand
a higher hourly rate or salary and
can often lead to higher levels of job
satisfaction due to the diverse range
of projects that they can work on.
Because the industry caters to these
short-term opportunities, employees
benefit not just from a bump in salary
but also a diverse experience base that
makes them even more marketable.
CHOOSINGA
CONTRACTOREMPLOYED
BYFASTSTREAMGIVES
COMPANIESTHEABILITY
TOHIRECONTRACTORS
WITHOUTWORRY
6. STREAMLINE FOCUS
11
Unfortunately, experience in oil
does not necessarily transfer into
the gas sector, just as onshore
expertise does not equate to
offshore. However, many of the
things companies are looking to do,
such as FLNG, have never been done
before – so it’s imperative companies
find the right match for a job role,
which requires an intense amount
of research and knowledge of the
sector and candidates.
Historically, LNG talent has been
sourced from expatriates hailing
from the U.S. and UK. However, now
that the U.S. is transitioning from a
major importer of LNG to a potential
exporter, many of these talented
people are choosing to stay in their
home countries. Not only does this
have a major impact on the global
economy – increased production
could lead to lower prices in the long
term, particularly in the Asian Region
where high demand in countries
such as Korea, Japan and Taiwan is
creating extremely high prices – but
on the talent pool available to global
producers and affiliated companies.
“Another challenge in recruiting
for the global LNG sector is
locating the talent ‘where they
are.’ These specialized and
experienced candidates are likely
currently employed and may not
be considering a job move – until
they know what’s available,” said
Clements. “Undoubtedly, the number
of LNG and FLNG projects will
continue to increase faster than the
available human capital. There is no
end in sight for the skills shortage.”
With the world’s
energy demand
only expected
to increase over
the foreseeable
future, production
has no choice
but to increase
in order to keep
pace.
As detailed earlier in this edition,
the retirement en masse of Baby
Boomers means that there are an
insufficient number of qualified
STEM graduates available to absorb
knowledge and perform tasks..
Coupled with the wildly increasing
number of projects and opportunities
planned and underway, qualified and
experienced talent is in high demand
and short supply throughout the
entire value chain.
This issue is not unique to any
geography or engineering discipline,
but with the emergence of LNG
and FLNG in new and established
markets across the globe, the
spotlight shines even brighter on
this promising and rapidly developing
sector. In fact, Faststream’s executive
leadership team recently visited
Gastech Asia and came face-to-
face with the challenges in the
LNG sector, specifically the talent
shortage.
“There is already a shortage of talent
in LNG and the U.S. shale boom,
multiple projects happening off the
coast of Africa and Australia and
more projects and FID’s being taken
within FLNG will only put further
strain on the workforce shortage,
both on and offshore,” said Simon
Clements, group commercial
director for Faststream Recruitment
Group. “Everyone wants to recruit
people with experience in LNG;
the fact is there isn’t enough talent
to go around. To attract top talent
in this hyper-competitive space,
you’re going to have to be very
well networked within the passive
candidate labor market and have
access to mobile candidates,
situated globally.
10
JUNE2014
GLOBAL
WORKFORCE
ISSUENOW
IMPACTINGLNG
SECTOR
THERIGHTMATCH
FORAJOBROLEREQUIRES
ANINTENSEAMOUNT
OFRESEARCHAND
KNOWLEDGEOFTHE
SECTORANDCANDIDATES
7. To find out more about Faststream and to discuss your hiring
requirements or career ambitions, please contact your local office:
UK Headquarters
The Quay
30 Channel Way
Ocean Village
Southampton SO14 3TG
Tel:+44 (0) 23 8033 4444
Email: info-uk@faststream.com
@faststreamoil
ASIA - Pacific
Faststream Recruitment Pte Ltd
10 Hoe Chiang Road
#08-01 Keppel Towers
Singapore 089315
Tel: +(65) 653 27 201
Email: info-sg@faststream.com
@faststreamoil
Fort Lauderdale
100 NE Third Avenue
Suite 605
Fort Lauderdale
Florida 33301
Tel:(+1) 954 467 9611
Email: info-us@faststream.com
@faststreamUSA
Houston
11451 Katy Freeway
Suite 640
Houston
Texas 77079
Tel: (+1) 713 636 9514
Email: info-us@faststream.com
@faststreamUSA
www.faststream.com
STREAMLINE