Matt Warder: Mature approach could bode well for oil and gas

The cyclical nature of business is well documented, and most competently managed businesses have adapted to survive the peaks and troughs that come their way.

Matt Warder, director of energy and professional services at Change Recruitment Group

However, the last few turbulent years have still left their mark, particularly on the oil, gas and energy industry. What happens when the troughs come back to back, and the peaks are few and far between? The fallout can be devastating for many years to come.

Usually, the long-term picture would include a talent crisis. When an industry sector is going through a down period, companies contract and lose people through efficiency savings as well as increased natural attrition. Often these are specialist people with skills particularly attuned to one key sector.

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If their sector isn’t hiring, many of those people will retrain, relocate and if they are lucky, be re-employed elsewhere. However, this means their skills have been lost to the sector, and when the good times return, there’s a significant problem. A shortage of skilled workers can be as devastating for a sector (particularly one as technically skilled as oil, gas and energy), as the market pressures that led to the original down period.

This isn’t to say that the future should completely dominate the present – there are clear commercial drivers for the efficiency and cost-control climate that currently reigns. We are all aware of the brutal economic environment currently casting its shadow over the north-east and to say that the region can get through it without cost cutting would be extremely naive. However, with that in mind, those companies that are able leverage a bit of room to think about the future impact of decisions made today will make a real difference to the long-term recovery of their own businesses, and the sector.

On the surface, it’s a fairly simple issue – drive skilled people out of the sector now, and face an acute talent crisis later, when at best, businesses will end up paying vastly inflated salaries to get the right people for the job. In a market where short-term survival is uppermost, the solution is anything but simple.

It takes a brave and innovative industry to break this cycle – and to their credit, some businesses in the beleaguered north-east energy sector are starting to think creatively about the long-term picture, and are doing what they can to avoid the skills shortage further down the line.

Some companies are looking at renewables projects, and moving skilled staff over to focus on this area for a while. Some are investing time in identifying their most valued and talented team members, and finding other jobs within the business that might not play to the strengths of a skilled worker, but will keep them in the fold until the right job comes back on line. After all, many workers will want to avoid the upheaval of retraining or relocating and will be content enough to do something else in the short term.

In response to this move to “active talent management”, individuals are taking a more measured approach too, and working with their employers to “make do”.

Here we have a lesson that the energy sector, and others, can learn from – and it’s crucial for the future of the north-east, and Scotland, that we do. This approach is not strategically desirable, but it is where we are.

Through the doom and gloom emanating from the north-east, there is comfort to be taken from the approach being taken in some quarters today, for it will make a significant impact in the future.

• Matt Warder is director of energy and professional services at Change Recruitment Group