Now that we’ve had a few weeks to work on our resolutions this week EnergyPowerLab is looking back at 2017 energy hiring trends to better understand how the market is positioned today. From there we look forward to working with our partners to make strategic decisions to exploit the market to the highest potential.
Market Rate Alignment
This year companies continued to face pressure to cut costs amidst the prolonged downturn in oil and gas. The first cut to be made was within market rate alignments; salaries, expatriate packages, contractor fees were lined up first on the chopping block.
By the end of the year, market rates were rising quickly as an all-out free for all overtook the industry in search of the best talent. The talent shortage forced companies to pay inflated rates to remain competitive and recruit the best talent.
To mitigate this year, we expect companies to rely more heavily on analytic and data tools to adapt more freely to flocculating rates, and head off more rising costs with competitive rates.
As the sector recovers from the downturn in oil and gas, we expect the skills gap to widen. As companies scaled back graduate training schemes and universities focus more heavily on the renewables and infrastructure sector, oil & gas, mining and nuclear had a rough time of it.
The number of workers nearing retirement could put many companies at risk of being unable to fully execute their projects. We have seen many of our clients are savvy to this issue and have already begun succession across all levels of their organization (not just senior management.) Many companies however are still not fully prepared for the recovery of the sector and will find themselves short many hands if they do not addressed their human capital issue with a multi-tiered approach to ensure they never have an unfilled vacancy within their ranks. It has been estimated that the average of an unfilled vacancy in the sector can cost around $30,000 per month, which rapidly takes its toll.
With such a competitive market and talent gap, another huge trend we saw in 2017 was companies struggling to create effective retention strategies. To keep talent engaged firms are having to become more and more competitive – flexitime, additional vacation time, more competitive compensation and investment benefits, and engaging office culture are all strategies companies participate in to keep this talent around. This type of planning is no longer optional, but crucial to keep the best talent on the team.
This is a challenge for the HR professionals to keep the pipeline moving with new talent and happy talent on retainer. Creating a recruitment funnel that is dynamic enough to maintain both ends often is incredibly challenging for HR departments, especially those with limited personnel or resources. In Often EnergyPowerLab steps in here to generate new talent while the HR of the firm concentrates on the existing talent. If companies cannot find a strong balance between these steps then business risk is significant.
A newer trend of 2016 was the drive for local talent. While many companies still are having to import talent due to the skills gap, increasingly companies are beginning their hunt locally before moving to global candidates to save on expatriate costs. For operators in emerging markets, used to brining in specialists from their global base, finding local teams has become a more cost-effective choice. Local teams also introduce more immediately pertinent knowledge to the firm, knowledge which often creates a learning curve for imported talent. Creating a balance between local talent and experience/skills to execute projects has become a powerful strategy in the energy sector.
Outside of the oil & gas market, we expect momentum to continue building and the sector expanding rapidly as global energy efforts focus on nuclear and renewables. A recovery is expected within oil and gas, although the volatility of the sector is high. For the current workforce and those entering it, continuous education is going to become pedagogical key to filling the skills gap across the sector.
Clean energy has become a mainstream engine of economic growth. The progress that’s been made over the past decade has enabled clean-energy leaders to emerge with competitive products and services, and has solidified both public and private support across the political spectrum.
At EnergyPowerLab we are an industry leader in energy sector recruitment and consulting services. We work one on one with our clients and candidates to provide employment and continuous learning solutions. These solutions exploit our understanding of the global market and its trends offering a competitive advantage to our clients. Get in contact with us today to fill your vacancies (or any upcoming) with the perfect candidate or to create a strategic plan for your market.