The oil and gas industry has had to make some tough decisions over the last several quarters with slumping oil prices that have only in recent months shown some signs-however slight-of buoyancy. Capital spending plans have been slashed, companies have merged, workforces have been reduced. The economic uncertainty that comes from lower oil prices has led to similar fallout in the past.
A recent targeted survey, however, conducted by Toronto-based executive search firm Caldwell Partners has shed some light on the mindsets of a certain subset of industry decision-makers grappling with the same tough choices facing all of industry during this uncertain time.
Future talent plans
Caldwell Partners' survey, conducted during February through mid-March, queried chief executive officers, chief financial officers, and human resources executives from Canadian-based oil and gas companies about their hiring and firing plans in the midst of the recent downturn. Those executives surveyed spanned industry, heading up some 200 exploration and production, midstream, and service and supply companies, largely headquartered in Calgary.
The survey, entitled "2015 Talent Plans in the Oil & Gas Industry," provided some interesting insights into these executives' perceptions amid the current climate. "Simply put," the survey summary said, "where some leaders see disaster, others see opportunity."
It said, "Because the oil and gas sector is so technically demanding, having quality talent on board is an extremely valuable element of success for companies. We often hear leaders of oil and gas companies say, 'You can have the best rocks in the basin, but if you don't have the right people doing the right things, you won't create value.'"
The survey said, "In the face of an historic plunge in oil prices, one might expect executives to batten down the hatches in anticipation of stormy weather ahead. However, in response to the statement 'We plan to reduce head count in 2015 given current market conditions,' only…27% of respondents to our survey strongly agreed with this outlook."
Perhaps even more startling, the survey said, "was the fact that over half of the respondents (57%) disagreed with the [above] statement, while four in 10 said they anticipated continuing with plans to increase their head counts this year."
Cautious optimism
Caldwell Partners found that those executives responding more optimistically headed up the Top 50 firms (based on 2014 share-price appreciation).
"Two thirds (67%) of surveyed leaders from Top 50 companies said they concurred with the statement 'We believe current market conditions create critical talent acquisition opportunities we will pursue in 2015,' while more than half (53%) believed the downturn would position their companies favorably in terms of attracting top talent that probably would not be available if economic conditions within the industry were better."
The survey said, "When presented with the assertion 'These market conditions represent an opportunity for the industry to address critical challenges and will make the Canadian oil and gas industry stronger,' seven in 10 executives from Top 50 enterprises agreed with the sentiment, particularly CFOs."
Sean McLean, co-managing partner of Caldwell Partners' Calgary office, said, "Surveyed executives from the Top 50 companies found to display a generally bullish view of the industry over the mid- to long-term. By and large, these individuals held a strong conviction that the Canadian oil and gas sector will thrive once again."
McLean added, however, "Although our research found that there is still some degree of positivity existing within the oil and gas companies outside of the Top 50, it is very clear that these organizations feel considerably more tense and uncertain about the current situation."
The survey noted that this uneasy hesitation was plain to see in the results. It said, "As one recently displaced executive from a junior exploration and production company phrased it, for his former employer, 'The best possible outcome for 2015 will be to survive.'"
McLean concluded, "During this slowdown, organizations eager to power through the downturn and emerge well-equipped to capitalize on the opportunities available must take a two-pronged approach that involves finding ways to retain key talent while simultaneously recruiting top performers who were previously unattainable."
