Employee recruitment, retention crucial, companies tell OTC

Oil and gas companies and the service companies that work for them must begin recruitment early and work hard to retain the employees they have, the Offshore Technology Conference was told Wednesday.


By the OGJ Online Staff

HOUSTON, May 2 -- Oil and gas companies and the service companies that work for them must begin recruitment early and work hard to retain the employees they have, the Offshore Technology Conference was told Wednesday.

Attracting new workers can be difficult because of the industry's poor image socially and as an employer. But image can be changed, and industry is working to accomplish that with education strategies, especially for the young.

Among those already in the industry, demand is high for experienced personnel, and recruitment is aggressive, leading to high turnover.

BP PLC and Schlumberger Ltd.'s Oilfield Services unit have begun concentrated efforts to attract young people early, said executives of those companies.

Halliburton Co., Dallas, revealed its strategies to keep employees and attract new personnel.

Recruitment
Oil and gas companies must recruit students in high school and in their early college years as an investment in their future, said executives of Schlumberger Oilfield Services and BP.

Joe Mongrain, a Schlumberger Oilfield Services personnel officer, said 200-300 petroleum engineers and geoscientists graduate from US colleges yearly and a like number get graduate degrees in petroleum engineering or geosciences.

The Schlumberger Excellence in Educational Development (SEED) program involves provide internet service for high schools. Schlumberger has set up a web site that students can visit and ask questions of 400 Schlumberger employees who have volunteered for this initiative.

In addition, Schlumberger offers scholarships, internships, community programs, and expos to educate young people about the opportunities in oil and gas careers, Mongrain said.

"This is an investment in our future. We are talking to eighth and ninth graders. The investment we are making today isn't going to pay off for the next 8 to 10 years," Mongrain said.

Steve Decatur, BP PLC staffing coordinator for engineering and geoscience in Houston, said BP also is going to high schools and colleges to tell students about the opportunities in the oil and gas business.

"People are not shying away from this industry," Decatur said. "We have an 80-90% job acceptance rate in engineering and geosciences."

Decatur sees no immediate crisis in finding employees. But he said his concern is ensuring that oil companies will be able to recruit and retain the top talent of the future.

"Let's not make the mistakes we made before as an industry when we ramped up and then we had to lay off people," Decatur said.

Ronald Carter, program director of the Network of Excellence in Training, said petroleum engineering graduates from Texas A&M University, College Station, are getting starting salaries of $55,000 and signing bonuses from $10,000-15,000.

The Network of Excellence in Training is based in College Station, Tex. It was formed by Schlumberger, Texas A&M, the University of Oklahoma, and Heirot-Watt University in Scotland to help the oil industry find employees.

"The industry has a very poor reputation for stability," Carter said, adding it's estimated some 600,000 people left the exploration and production industry during the last 20 years.

Retention
The average oil industry employee is 48 years old and will soon be eligible for early retirement. If industry does nothing to aid recruitment and retention, it could lose up to 60% of its workers within 10 years, warns Margaret Carriere, vice-president of human resources for Halliburton Co., Dallas.

Retention is the key, said Carriere. When employees leave, essential experience and knowledge leave with them so strategic retention must be a major concern for all companies.

She said it can cost an employer 2-3 times a worker's base salary when he or she leaves -- and that's just the easily measurable cost. Intangibles like experience are more difficult to break down to dollars and cents. And it will also take longer than it once did to refill the position.

The pool of qualified applicants for industry jobs is getting smaller, and demand is high from both operators and service companies. Recruiting has had to become more aggressive to keep pace. As a result, high turnover is also a major issue.

She cited some of the things Halliburton has done to improve recruitment and retention. Since the most most frequent single item on surveys and exit interviews -- not only in the oil industry, but overall -- is a perceived lack of career path, Halliburton has created an intranet job-posting site for employees and managers.

Carriere also said that Halliburton is making an effort to link pay to performance. She admitted there are problems in implementation, but said financial incentives must be available to everyone, not just management.

More fuzzy recognition, like most valuable player awards, she said, is also essential to worker morale. Discounts and special treatment also make workers feel appreciated. When people feel underappreciated, they tend to be bitter -- and leave quickly.

Job flexibility is an area of major study for Halliburton, with part-time and project-based employment a possible recruiting and retention tool. Telecommuting and work-from-home are also options under study.

Part-time and project-based work also offer the option to rehire workers who have retired or been laid off in previous cycles. Rehiring helps slow the brain drain, and bring knowledge and experience back into use by the company.

And finally, Carriere said, clichés just don't work any more. A company that calls itself world-class or state of the art had better be world-class or state of the art -- or it will lose the employees it drew with that brag. Deliver on promises to workers, she advised.

Minority recruitment
The social activist Rev. Jesse Jackson made a quick visit to OTC Wednesday while on a trip to Houston to promote more visible -- and better paying -- business roles for minorities and women.

"The energy industry should look like the world from where the energy (resources) come," Jackson told a small group of reporters as he posed for pictures outside the exhibition area at OTC. He said he was in Houston to open a bureau of the Wall Street Project sponsored by his Rainbow-PUSH Coalition. Goal of the project is to promote high-profile jobs for more minority members within the financial and business communities.

"African-Americans, Latinos, and women should have a place at the table" in the development and marketing of energy, said Jackson.

"We've been told too long that if (minorities) study engineering, we can get in" professional jobs within the energy industry, he said. However, Jackson wants more women and members of minorities among the executives of the energy industry and among their attorneys and other support services.

Jackson also deplored the large quarterly profits recently reported by oil and gas companies and the effects of high energy prices on people with fixed incomes.

He also called for more investment in research and development of renewable energy.

"Every time a well is drilled, there are consequences. With every flare, there are consequences," said Jackson. "It makes no sense to abuse, misuse, and over-use energy."

More in Economics & Markets