Data Watch

Energy Sector Faces Recruitment Challenges

Nearly 90% of senior Human Resource executives at 22 top international oil and gas companies believe their industry faces a talent shortage, a new study finds, and they call the problem one of the top five business issues facing their companies. Eighty-eight percent agree the shortage has the potential to impede growth and financial performance.

Asked to rank each of the following issues on a scale of 1 to 10, with a 10 representing the greatest challenge, 25 HR executives at 22 firms responded as follows:

• Competition from peer companies = 8
• Corporate growth as a result of inability to staff projects = 7
• Financial performance due to rising costs = 6
• Innovation = 6
• Operations/safety = 6
• Corporate reputation = 5

Source: Ernst & Young, LLP and Rice University

The industry's response to its greatest challenge – competition – continues to be an increase in compensation to retain existing employees. Eighty-eight percent of these executives are increasing compensation as their primary solution to keeping and attracting talent, the survey reveals.

The need for employees in the oil and gas industry is compounding the problem. Eighty-one percent of business leaders in the energy sector expect an increase this year, finds a separate survey by Grant Thornton, LLP of more than 90 senior executives of all kinds in the energy industry; another 65% expect an increase in 2010.