Friday, September 30, 2011

Engineering Crisis in OG&C - A Classic Story of Supply and Demand

Our blog has moved. You will find this blog post and fresh content on our new Global Engineering Jobs blog.
by Mike Moriarty

Look at the career opportunities pages of most major oil and gas jobs operators worldwide and you’ll see hundreds of positions for engineers at every career level. And that’s just the majors. EPCs, equipment suppliers, vessel builders and others are competing to garner the attention of the energy industry’s new and top engineering talent.

Project, chemical, and process engineers, geophysicists, seismologists and more are in high demand the world over. Add to that, the support industry positions like equipment designers, IT experts, fluid injection and biochemical engineers and you get the picture. Untraditional fields, sands, shale and new technology all mean engineering. There’s one small problem…the number of qualified engineers doesn’t necessarily meet the demand.

The Causes
A relatively flat historical price per barrel of oil adjusted for inflation from the 1980s to early 2000s saw a lull in the OG&C marketplace in terms of employment opportunities for young engineers.  Some major oil and gas programs at colleges and universities even shut down due to low demand.

Enter 2008.  “Peak” oil, environmental regulations, unrest in the Middle East and Africa, the Iranian nuclear threat, speculation and more all led to a record jump in oil prices. OG&C careers became desirable again – in short order and with a shortage of available talent to fill the positions.

“In countries like Nigeria, where oil is the main industry, everyone wants “in” so finding a number of interested candidates is not a problem. In the Western world, we are competing with lucrative IT careers for young talent. In the UK, it’s the financial sector. When the price per barrel rises, our number of applications for enrollment goes up, when the price goes down, enrollment drops off on a proportionately measurable level. There is a lag in supply and demand of engineering candidates.  When the price fluctuates in either direction the lag tends to be one year in Europe and two years in the United States.  We’ve mapped the data and the correlation is very strong,” states the Chairman of the Society of Petroleum Engineers (SPE) Talent Council and Professor at London’s Imperial College, Dr. Alain Gringarten.

Tar sands, shale gas and deep water well production become economically feasible as prices rise. Despite recent fluctuations, these new sources remain profitable because new technologies such as horizontal shale wells and fracking technology improvements, tar sands conversion processes and more have lowered the cost of non-traditional extraction. With these new technologies comes the demand for increasingly specialized education and experience.

“Although definite advancements have been made, we are still learning about extracting oil from these sources. Projects such as these demand a higher education and an experience level beyond an undergraduate petroleum engineering degree. If fact, we did away with our undergraduate degree [at Imperial College] because the new technologies involved with increasingly complicated extraction methods, such as  deep wells and exploration, require a sophisticated level of thinking and specialized knowledge of core subjects such as geophysics, electrical, structural and mechanical engineering.” adds Dr. Gringarten, “Candidates for our master’s and doctorate programmes must have a proven background in these core disciplines because the material covered requires it. Degrees are tailored to mastering highly specific areas of petroleum engineering which are based on their prior education and experience.”

The Competition is Fierce for Oil & Gas jobs
Even though some industry experts estimate that it takes a young engineer about 8-10 years of experience to evolve into a senior leader, a concept further supported by Dr. Gringarten’s comments , younger engineers in the energy industry are still sitting in the catbird seat. The attrition of the Baby Boomer professionals, the lure of IT disciplines for potential candidates, and other factors, still makes them, and existing senior level talent, the new “black gold” of the industry.

Since 2008, higher education is the U.S. has been scrambling to resurrect programs, and, graduates of energy concentrated engineering programs have nearly a 100-percent chance of getting hired upon graduation, sometimes even before they graduate.

“In this market,” states Damiene Humphrey, Account Executive for Troy, MI based technical staffing firm, Talascend.  “you have to wear a lot of hats and be ready to roll because the opportunity to fit the right candidate with the right company can pass you by if you’re not paying attention or making the right offer. In addition to managing accounts and developing relationships with new customers, even I find myself sourcing, pre-qualifying, recruiting and selling our customers to engineering professionals. It’s all worth it when you make that connection between fit and need.”

Help in the Fight
Project and hiring managers across the energy industry certainly have their work cut out for them. The engineering shortage is worldwide and has created a greater demand for corporate recruiters and human resources professionals as well. Some companies are turning to industry organizations and technical resourcing companies for help in enticing candidates through their doors.

“It’s a full time job for hiring managers and then some,” adds Humphrey. “I’ve been in the oil industry for quite some time and I’ve never seen anything like the spike in demand for specialized engineering talent that we’ve experienced over the past few years. The qualified candidate pool is small and global in nature. Many of my clients are shocked at the increase in baseline benefits and incentives required simply to get an experienced candidate’s consideration these days. Because of this phenomenon, hiring managers should look for a resourcing partner that digs deeper, beyond the resume and skills, to find out exactly the type of person they want to add to their organization. The wrong hire can be very costly.”

“The SPE Talent Council is engaged in helping to ensure degree programs meet today’s high level of standards in terms of education. What was taught in schools 20 years ago is not very applicable in today’s hi-tech industry,” says Dr. Gringarten. “In countries where new discoveries are being made like Ghana, Angola and Kazakhstan, while the desire is there, the educational resources are not. The SPE Talent Council and its members are also helping develop educational programs in these areas and connecting developing markets with experts in the industry to improve the quality and quantity of their engineering talent to help balance supply and demand,” says Dr. Gringarten.

The Future
The future of OG&C engineering jobs, much like the barrel price, is uncertain. There is certainty that the need for qualified engineers specializing in industry related disciplines will continue to increase as new technologies emerge. In addition to US colleges and universities, hiring managers and project managers may need to take a more global approach to finding their next all-star recruit. Malaysia, the Middle East and surrounding areas are current hotspots for finding young talent. Industry organizations and resourcing firms with a global reach can help in the effort to garner the attention of top industry talent as well.

Richard Spragg writes on various subjects including global engineering staffing and global engineering jobs and oil and gas jobs.

Wednesday, September 21, 2011

GM’s gamble has to be part of a longer term strategy, built on market understanding

Our blog has moved. You will find this blog post and fresh content on our new Global Engineering Jobs blog.
by Richard Spragg

Whether you blame bad management, Union intransigence, Washington or anyone else for the auto industry’s woes, the fact remains that the Big 3 are now looking at a new market landscape. Behind the wrangling and politics is a simple business fact. You have to understand the products that your customers want to buy, both now and in the future, and you have to deliver those products at the right price. 

The 2011 Equinox. One of GM's best selling Crossovers
Today, GM took a step toward reclaiming some of its market share with the news that it will reopen its Spring Hill manufacturing plant in Tennessee to handle increasing demand for two of its biggest sellers: the Chevrolet Equinox and the GMC Terrain; both crossovers enjoying significantly increased sales.

[Equinox sales are up 48% this year with 130,000 sold through August. Terrain sales are up even further – 61% and 57,000 units for the same 8 months. ]

Local media report that the UAW expects Spring Hill to reopen in 2012 with 500 hourly workers. GM will invest $420 million on two programs creating about 1,700 jobs total.

On the face of things, this is a sensible, practical move that will create much needed jobs and stimulate a local economy. GM are directing investment towards supplying what customers want. What they want now at any rate. The success of GM’s future planning depends on understanding the next shift in thinking for American consumers. And the Big 3 must be first to understand this and first to address these needs through future models. If the US auto industry is really coming back, it’s going to need to lead the market charge toward fuel efficient vehicles, not simply follow the trends established by Nissan, Honda and Toyota.

Maybe they can wrangle the Unions and achieve competitive levels in employment costs. Maybe they can negotiate the political mine field of Washington, in financial and legislative terms. 


But if they don’t have the products that people want ready for them to buy before their competition do, none of these things will matter.

It’s the market, people. And a market that doesn’t exist, is not affected by any of these complex issues. 

Monday, September 12, 2011

10 years later, One World Trade Centre will meet almost impossible expectations

Our blog has moved. You will find this blog post and fresh content on our new Global Engineering Jobs blog.
by Richard Spragg

The trouble began almost immediately after thoughts turned from tragedy to rebuilding. Disputes over design, location, ownership and decision making dogged every step of the first stages of rebuilding Ground Zero. It showed everyone in the worst possible light; they looked like children, squabbling while a grieving nation was looking for calm voices to come together and rebuild.

Ten years after the loss of the original World Trade Center, the story is very different. What has emerged in lower Manhattan is a simply astounding achievement in every sense. Building a complex that is both respectful of the need for a major commercial hub in one of the world’s busiest financial centers, and also respectful of the site’s status as hallowed ground was an impossible task. How can you build on the site of the towers? How can you not build on the site of the towers? What memorial could possibly offer sufficient comfort to the families of the victims or to the city of New York? What building could possibly stand tall enough or large enough to demonstrate the resilience and pride of America?

“How do you create a plan that doesn’t shift New York to sadness but has a kind of civic quality, a symbolic quality that is positive?” said Daniel Liebskind, who’s master designs for the whole complex have underpinned the final result.

The answers have come with simplicity, cooperation and creative brilliance.

Today the 9/11 memorial opens to the public. Two reflective pools carrying the names of every person killed sit in the footprints of the towers. Michael Arad’s designs create a feeling of emptiness and loss, without misery or dejection. Around them Peter Walker’s landscape design delivers a natural reflective area of water, trees and grass. In the north west corner of the site, removed from the original twin towers, One World Trade Center is quietly climbing upward. Its first five stories already complete; by 2013 it will stand exactly 1776 feet and will be the tallest building in the United States.

500,000 square feet of retail space and 69 floors of commercial offices, vital to the local economy, will coexist seamlessly with a garden of reflection and remembrance. An empty space where nothing could ever have been built will remain empty, next to the tallest tower in the Western Hemisphere.

The site is a monument to more than lost life; it is a tribute to Americas resilience, its flexibility and to the power of engineering, architecture and construction.

Against all the odds, they've managed to marry the practical and emotional needs of a local community, an economy and a nation.

Richard Spragg writes on various subjects including global engineering staffing and global engineering jobs.