Oil and gas firms urged to find new ways to recruit, retain workers

While many worry about future energy supplies, the "truly scarce resource" in the oil and gas industry over the next few years will be "talented, technical people," said a panel of industry executives.


Sam Fletcher
OGJ Online

HOUSTON, May 22 -- While many worry about future energy supplies, the "truly scarce resource" in the oil and gas industry over the next few years will be "talented, technical people," said a panel of industry executives.

That's because the industry has been playing its own odd version of musical chairs since the last energy boom went bust in 1982, said John Gibson, president and CEO of Landmark Graphics Corp.

"Each time the music stops, we add more chairs but no people. So the only way to fill a chair is to put more money on it," said Gibson, moderator of the panel discussion of industry personnel problems at an industry outlook conference Monday in Houston.

Energy related companies must rethink how to best recruit, train, and retain good workers in the future. And they haven't long to do it, since most members of senior and middle management will reach retirement age in the next 5-10 years, said speakers at that conference, sponsored by the Gulf Coast section of the Society of Petroleum Engineers.

The energy industry has evolved from "dumb iron" into high technology, using more computers than any business outside of the computer industry itself. Yet it does not properly use that technology to lure graduates of technical courses into the business, said Bruce Peterson, managing director of Korn/Ferry International, a top executive recruitment firm.

"We tend to think of competition (for employees) the wrong way in our industry," said Allen Mesch, founder of PetroStrategies Inc., a planning consultant who participated in that panel discussion. "The real competition is not Enron Corp. or Apache Corp., but Microsoft Corp. or Dell Computer Corp."

In that competition, the oil and gas industry is handicapped by its public image as a pollution-prone industry, wracked by cycles of boom and bust that have eliminated 100,000 jobs in recent years, said Mesch.

Moreover, he said, "This historically has been a male-dominated, white Anglo-Saxon Protestant industry," particularly among top management. "That is changing, and changing for the better," he said.

Still, such changes must have complete backing "from the corner (corporate executive) offices. And a few corner offices need to be blown up," said Douglas L. Foshee, who resigned as president and CEO of Nuevo Energy Co. earlier this month.

"It's not acceptable that this industry does not employ enough women. It's not acceptable that it does not employ enough minorities," said Gibson.

But he drew applause from the large audience when he warned that it's also not acceptable simply to "sit at your desk and blame (corporate problems on) the idiots who run the company."

"When you're trying to grow your company, everyone needs to be involved in recruitment," said Peterson.

Compensation packages necessary to recruit and retain the best employees also must change, panelists said.

"You've got to pay for performance -- award people for their accomplishments, not their titles. If some employees are 10 times more productive than others, it's better to pay them twice as much than to go out and hire 10 more people," Gibson said.

"Give employees a share of the company, and you'll see a dramatic change in the corporate culture," Peterson advised.

"Monetary rewards are important, but they're not the main thing," said Mesch. "A lot of middle-management people would rather have another week of vacation than an extra $5,000 that the government will get most of anyway."

"Productivity is key to anything we're going to do," Gibson said. "But we're looking at a new workforce that's just not willing to work long hours for extra pay as in the past."

Most energy-related companies virtually abandoned college recruitment programs over the last 10-12 years. But even through downturns, corporate executives "need to be consistent in recruiting and training new people. You've got to be on college campuses recruiting annually," Mesch said.

Corporate loyalty to employees also is rewarded, said Foshee, citing the example of Anadarko Petroleum Corp., Houston, which never had an across-the-board layoff of employees through even the worst of the energy industry depression. As a result, he said, "That company has employees who would stand in front of a truck for it. It attracts good people."

Gibson cited another independent producer, Apache of Houston, that is backing public school programs aimed at stimulating interest in geology and the petroleum industry. "As (Apache CEO) Raymond Plank says, 'You've got to get the little poopers early,'" said Gibson.

Contact Sam Fletcher at samf@ogjonline.com

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