Tackling the Oil and Gas Worker Shortage With Digital Solutions
Feb 28, 2023
Today, there are about 100,000 fewer workers in oil and gas than before the pandemic. Tens of thousands of workers left their jobs in the industry in the first quarter of 2022 alone. This shortage of workers and the inability to attract new ones are major challenges for oil and gas companies.
As companies within the sector struggle to lessen the widening knowledge gaps brought on by the loss of tenured employees, they are also struggling to improve production while dealing with a dramatic loss of workers overall. More organizations in the oil and gas industry are turning to digital solutions to help bridge the gap between the demands of consumers and the workforce capacity challenges.
What’s Causing the Worker Shortage in the Oil and Gas Industry, and What Are the Implications?
The U.S. oil and gas sector has remained relatively resilient despite continued market volatility and hard-to-predict booms and busts over the years. It is estimated that approximately 3,000 U.S. exploration, production, and oilfield service jobs were negatively affected by oil price swings from 2014 to 2019. In comparison, more than 100,000 jobs were shed from the industry in less than one year in early 2021, due in large part to the pandemic.
Although it was expected that oil and gas would recover and expand by 12.5% in 2022, a number of factors have prevented it from bouncing back to pre-pandemic production levels. A major obstacle to meeting the demands of the industry is acquiring and retaining the workforce needed.
There are two main factors affecting the oil and gas industry worker shortage:
1. Little Room to Grow and Long Hours.
Operators must manage day-to-day operations, securing financing for their businesses and making sure spending is in line with their companies’ budgets. Though they are also responsible for the operation of drilling rigs, geological reviews, pipeline construction, and data processing, unfortunately, performing these kinds of tasks can come with little reward.
Although the pay is good, for many, there is no room for upward mobility. Additionally, employees have to work long hours and spend extended periods away from home. It is difficult for younger generations to embrace this because they have families and care deeply about work-life balance.
2. Retirement and Lack of Experienced Workers.
Older generations are reaching retirement age and leaving their jobs in the oil and gas industry. Losing seasoned and skilled workers has had an overwhelming impact on the sector as a whole, especially as it struggles to meet consumer demands that skyrocketed toward the end of the pandemic.
A lack of experienced and knowledgeable workers (or an inability to train them effectively) also increases personal and process safety risks. As a result, more organizations have grown dependent upon external contractors or have been forced to pay workers higher wages to perform more tasks. The ability to grow organically and handle rising demands is likely even more affected. For this reason, procedures need to be mitigated, ideally through digital transformation in oil and gas.
Why Is Oil and Gas Digital Transformation Critical for Solving Labor Challenges?
For one, digital solutions can help employees learn new skills more quickly and efficiently. By providing employees with access to online learning tools, they can learn at their own pace and on their own time. Additionally, digital solutions can help managers keep track of employee progress and ensure that everyone is up to date on the newest skills and procedures.
Digital solutions can also help improve workplace satisfaction by increasing transparency and communication. For instance, online tools can help managers give employees clear instructions and feedback. Additionally, online portals can provide a space for employees to voice their concerns or suggestions anonymously. This open communication helps create more positive and productive work environments.
Finally, digital solutions can improve safety in the workplace. By providing employees with access to safety information and training materials online, they can be better prepared to handle potential hazards. Additionally, online reporting systems can help managers identify potential safety risks more quickly and address them accordingly.
The use of digital solutions is becoming more common in the industry as companies look for ways to address the oil and gas worker shortage. These solutions can help companies train new employees effectively, keep experienced workers up to date on new technologies, and connect with workers who are located outside of traditional work sites. Using digital solutions to store data in one place makes it easier to keep all team members on the same page, no matter where they are. Consolidating knowledge in one system also helps fill in the gaps if a worker leaves, as other team members will have the information they need to pick up the slack and keep things running smoothly.
How Can Digital Solutions Improve the Oil and Gas Industry?
In addition to helping solve labor shortages, digital solutions are gaining traction in the oil and gas industry as companies seek to improve operational efficiencies and reduce costs. Organizations are finding that they can mitigate the challenges the industry is facing by planning for and investing in the right technology.
One area in which digital solutions have a major impact is asset management. Asset management is a critical function in oil and gas, as it helps companies keep track of their physical assets and ensure they are being used efficiently. Asset tracking technologies, such as radio frequency identification (or RFID) tags and GPS tracking, can help companies monitor their assets in real-time and identify potential problems quickly. These technologies can also help reduce downtime by providing accurate locations of information assets.
Digital solutions are also being used in supply chain management and safety monitoring. For example, many companies are using sensors and big data analytics to track the movements of trucks carrying hazardous materials. This information can then be used to improve route planning and prevent accidents. Furthermore, it can help automate the routing of vehicles and inventory. Things that used to be done manually or in multiple systems are now being consolidated into one platform.
In addition, companies are doing more with less by using digital twin technology in drilling, production facilities, and even engineering. With digital twins, there are fewer risks and less time and costs associated with maintenance, inspections, and other critical operations. They also help oil and gas companies operate with fewer people, which is a crucial ability in the current landscape.
In a world that is rapidly digitizing, it is no surprise that the oil and gas industry is feeling pressure to keep up. With advances in technology comes an increased demand for digital solutions that can help make the industry more efficient and close widening skills gaps.
If you are ready to take advantage of all the benefits digital transformation can offer your workforce, contact CTG today.
As a Senior Client Partner, Scooter Beachum is responsible for driving the success of current and future technology solutions in the Energy sector. With a deep understanding of the industry and a proven track record in managing revenue growth efforts, Scooter brings a wealth of experience in strategic market growth and revenue expansion within the energy sector.