It has been nearly 5 years since the great crash of 2008, and it’s now appropriate to ask if companies took advantage of the opportunity.  Did your company properly develop the workforce, or did it squander the gift of time?  I bet that I know the answer to that question for most.

It’s quite ironic how human nature and common sense often have conflicting value drivers.  Common sense would dictate that in a financial crisis, major oil companies should be out in the market picking up as much talent as possible.  The reality, which reflects the irrationality of human nature, shows that many oil companies slowed hiring instead.  Some went so far as to significantly downsize their organizations as well.

Don’t get me wrong, as I believe that many oil companies got fat, dumb and happy during the golden age of oil refining.  They became wasteful, un-disciplined, and equally irrational with hiring behaviors when the economy was lucrative.  Neither extremes are justified, and leaders of the oil industry should learn to temper human nature and allow common sense to have an equitable share in decision making.

Below are some reasons why oil companies should have aggressively been hiring over the past 5 years. 

• Boomers are over-due to retire, so half of the workforce will soon walk out of the door
• If you wait till the Boomers retire to hire new staff, you have fewer experienced people around to train the employees
• There’s a higher pool of top talent looking for work because all other industries have reduced hiring
• Companies could have established a lower employee salary profile by maintaining a healthy hiring strategy.  More new hires picked up on the cheap means less experienced hires required later on. 
• Companies can reduce dependency on contracting retirees or consultants to cover the knowledge gap
• Oil companies have a long term business objectives, so should be consistently hiring regardless of the current economic environment.
• By slowing down the hiring process, oil companies have created another gap in the experience curve.  This will result in higher attrition rates down the road as clusters of employees within a narrow salary grade will constantly compete for the next promotion. 

So ask yourself the question - how well prepared is your company at the present time?   With the expected increase of interest rates in the near future, it’s highly likely that the deferred Baby Boomer exodus lurks around the corner. 

What percentage of the workforce have 2 or less years?  What percentage has 15 – 20 years of experience?  Can you adequately maintain your company culture and fundamentals with such a low ratio of experienced to inexperienced employees? 

As we all know, the oil industry is filled with many great risks and dangers.  The regret of not adequately replacing experience lost from retiring employees will not be financial loss of inefficient operations.  The true regret will occur when people are injured and the environment harmed. 

Which side of the fence does your organization sit?  Only time will tell.