Oil struggles to fill hole left by baby boomers

How to attract the brightest millennials — and keep them once hired — is a problem wrestled with in human resources departments across the corporate sector. But the challenge is all the greater if your industry is less popular with these footloose young people than banking, insurance or even defence.

That is the position in which oil companies find themselves, according to Bob Dudley, chief executive of BP, who warned in a speech last week that the industry risked losing out in the battle for talented staff. “The millennial generation don’t just want career growth,” he said. “They also expect to make a positive contribution to society.”

Mr Dudley, who, at the age of 61 counts as a baby boomer, cited research showing that 14 per cent of millennials — the generation now in their 20s and 30s — would not want to work in the oil industry because of its negative image. This was higher than for any other sector, according to a report by McKinsey, the consultancy, using PwC data.

The problem was highlighted by environmentalists — most of them millennials — protesting outside the London venue where Mr Dudley spoke. They had earlier greeted him and other executives arriving at the Oil & Money conference in Mayfair with placards declaring it a “climate crime scene”.

Mr Dudley said the industry must do a better job communicating its commitment to help the world shift towards cleaner forms of energy — or risk losing the young people needed to lead the transition. “We need people who are curious, people who can challenge the status quo and come up with new solutions,” he said.

Oil companies’ image problem with millennials threatens to worsen a skills shortage brewing since the 1980s, when a downturn in oil prices drove a generation of engineers and geologists out of the industry. This led to what has been called the “Great Crew Change” as the retirement of experienced baby boomers left oil companies scrambling for the new generation of employees.

The problem has looked less urgent since the latest oil price crash two years ago forced another round of mass job cuts. However, this will only deepen the skills shortage when the market recovers.

Andrew Gould, former chairman of BG Group and now a director of Saudi Aramco, the Saudi state-owned oil company, said the problem was worst in the US and Europe. “If the west loses the ability to attract the brightest minds into the oil industry it is going to gradually skew control towards Asia and the Middle East, where there is no problem attracting talent.”

Industry leaders acknowledge that, in addition to environmental concerns, oil suffers from its reputation as an “old industry”. “Millennials expect a touchscreen environment,” said one executive. “When they think of an oil facility they think of roughnecks covered in grease.”

In fact, digital technology is beginning to transform the oil business with remote monitoring replacing some of the more dangerous and unpleasant frontline work. Shell, for example, recently launched an oilfield robot that can carry out safety checks under the control of a human operator sat hundreds of miles away. Innovations such as these could help attract “digital natives” to the sector and lessen the skills shortage by eliminating some jobs altogether, say executives.

ExxonMobil, the world’s largest listed oil producer, made a deliberate decision to keep hiring young people throughout the current downturn to avoid a repeat of the 1980s “lost generation”, according to Rex Tillerson, chief executive. “We’ve stayed on university campuses and continued to bring in new talent because we’re going to need them.”

Janette Marx, chief operating officer of Airswift, an energy-focused recruitment specialist, said Exxon’s approach was unusually far-sighted. Other companies have cancelled or scaled-back graduate training schemes, leading universities to reduce the number of petroleum-focused courses. “This is going to exacerbate the talent gap,” she said. “Engineers are in high demand so if courses and jobs are not there they will gravitate towards other industries.”

In the UK, the exodus of oil jobs from the North Sea has spurred a push by universities and the UK and Scottish governments to redirect engineers to renewable energy — a fast-growing sector that is more popular with climate-conscious millennials.

Deidre Michie, chief executive of Oil & Gas UK, an industry group, said many skills were transferable between oil and renewables, especially offshore wind farms. This could help make the wider energy sector a more attractive proposition, she said. “We need to convince young people that this is still an industry worth joining.”


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