Major staff cuts involved in restructuring by the Canadian petroleum industry are creating a demoralized work-force with problems for the future, a federally supported study says.
The 18 month study, backed by Ottawa's Employment and Immigration Department and industry associations, was conducted by consultants Peat Marwick Stevenson & Kellogg and Ziff Energy Group, Calgary.
The report says industry workers who were driven in the past by challenge and opportunity are now driven by fear of layoff.
"Unless retention strategies are developed quickly, the most mobile that is, the best qualified, motivated, and younger staff - will leave the industry when the recession ends," the study warns. It also notes the loss of senior staff as mentors.
The study, based on surveys of individual employees, 141 companies, and 22 educational institutions, says the industry has lost its reputation as an engine of the economy because of restructuring efforts due to weak oil and gas prices.
Industry associations that backed the study said results are under review, and policy decisions based on it will be considered in 1993.
MORE CUTS AHEAD
About 60% of the companies surveyed said they are still overstaffed, and more job cuts are expected in the next 2 years. Companies expect oil prices to stay flat until 1995 or beyond.
The Canadian upstream sector had 75,000 full time workers in 1988, including 15,300 seasonal or contract personnel. That figure fell 14% to 64,800 by the end of 1991. Professional and technical staff were hardest hit by personnel cuts.
The average age of remaining workers is now 38 years. Women, natives, and minority groups are under represented.
"As a consequence, the industry is becoming a homogeneous mix of people who think and act alike," the report says.
The report says industry should adopt a more selective policy of hiring, retiring, and layoffs and set up a joint human resources council for information sharing.
The study foresees continued corporate reorganization, asset sales, mergers, and acquisitions.
The report predicts Canadian industry spending will drop by one third during the next 2 years in a worst case scenario. ln a best case scenario, jobs will decline by 18% or 11,700 workers. A best case with gradually increasing prices would still see a 6% decline in industry jobs by 2000.
It also notes that companies are spending increasing sums for non-Canadian exploration and development. Industry spending on such ventures by Alberta companies has jumped 78% since 1987. It is expected to amount to more than $900 million in 1992, or about 20% of industry spending.
Copyright 1992 Oil & Gas Journal. All Rights Reserved.
