Great Crew Change - Hard look at reality

Summary

The "Great Crew Change" follows a similar logic as "peak oil". As people retire, and younger people are still gaining experience and know how, a gap in skills and capabilities tends to open. At some point, such gap becomes serious that a skills shortage leads to significant constraints to growth. The reality is actually less alarming, given the continual recycling of skills and technology to meet emerging challenges in the oil and gas industry.   

Analysis

Consider this scenario: A significant proportion of those employed by the "super majors" (i.e. Exxon Mobil ), Royal Dutch Shell, BP , Total and Chevron  are approaching their fifties. On the recruitment side, these companies tend to grow their own timber by recruiting their staff young (i.e. from universities and technical schools), train them and retain them practically for life.  With more people retiring at 55, the talent outflow is beginning to outstrip the inflow of young talents who can be "business ready". The consequence appears to be clear - skills shortage constrain a company´s capacity to grow and seize new opportunities.

The growth and skills problems are probably arising from elsewhere, rather than from natural wastage. The super majors appear to employ similar flawed strategies that investment banks are accused of. When revenues fall because of lower oil and gas prices, they down size their workforce to boost profits. Unfortunately, the talents that the companies want to keep are probably the first to walk, given that they are the most employable and valuable to a competitor (i.e. non-super majors).

In the midst of these changes, personnel rotation occurs that tends to affect existing relationships and business. Ironically, for technical skills, a number of "downsized" employees finds their way back as independent consultants that are contracted by the same companies. This time around, they are usually paid at a premium to their previous remuneration. The flexibility of contracted labor has its attractions to the companies, in spite of the higher costs.

As a consequence, the "lost" talents are actually still within access in the form of "consultants". With some luck, enough young talents are mentored by the "consultants" to keep the talent pipeline in balance.

However, this is a short term palliative. What is needed is a more flexible talent attraction scheme. Super majors suffer from a relatively rigid hierarchy similar to a military. External talents need to be accommodated. For instance, to achieve promotion, external hires need not be seen as "inexperience" because they happen to gain their stars from outside the company. To fit in, external hires need to revalidate their "qualifications". As a result, by the time they are "business ready", cloned to fit in, innovative prowess is replaced by conformity.   

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