December 10, 2015: Fifty per cent of oil and gas companies surveyed expect further staff cuts if oil prices remain low
(Calgary, AB) – A survey conducted by the Petroleum Labour Market Information (PetroLMI) Division of Enform found that almost 50 per cent of participating oil and gas companies reported they expect further layoffs and/or cuts to projects in the next six months if oil prices don’t rebound any time soon.
This fall, PetroLMI surveyed 36 oil and gas companies, representing between 63,000 and 83,000 workers across Canada, about the current workforce challenges they are facing in today’s economic climate. The 2015 Industry HR Snapshot found that almost 60 per cent of respondents said they were currently reducing their workforce, with almost half saying that layoffs had impacted between 11 and 25 per cent of their employees. Meanwhile, almost 50 percent of those surveyed also said they expect further layoffs and/or cuts to projects in the next six months if oil prices remain low.
“What is concerning for a lot of companies is that due to the continued low oil and gas prices they have had to go well beyond reducing their contract employees and are having to reduce permanent workers – something they were trying to avoid,” says Carol Howes, Vice President of Communications and PetroLMI at Enform. “In fact, 39 per cent of survey respondents reported less than 10 per cent of staff affected by layoffs were actually contract-based or contingent workers.”
Having said that, companies are doing what they can to hold on to their best and brightest. A number of strategies were reported to maintain workforce levels, including reducing wages, cutting staff bonuses and trimming working hours, training opportunities and benefits.
The survey found that heading into 2016, reducing costs and maintaining or increasing productivity are top of mind. With the number of layoffs that have occurred, companies’ top three workforce challenges will be managing and reducing costs, employee engagement and employee retention.
Adding to the workforce challenges ahead, responding companies stated that 50 per cent of staff who are eligible to retire are actually doing so. “Inevitably, the industry will be faced with a loss of experience and skills through attrition and that will have repercussions down the road,” says Emma Monaghan, PetroLMI’s Interim Manager of Labour Market Information.
“It may not be tomorrow, or next month, but our industry is resilient, and oil and gas prices are expected to recover over the next few years,” says Howes. “As energy projects come back on stream and baby boomers continue to retire, the industry will require more workers with specialized skills to work in an increasingly complex oil and gas environment. It is important not to lose sight of the longer-term skills shortages, an issue that dominated boardrooms not even two years ago.”
HR Trends and Insights: 2015 Industry HR Snapshot is free to download at careersinoilandgas.com.
The Petroleum Labour Market Information (PetroLMI) Division of Enform (formerly the Petroleum Human Resources Council) is a leading resource for labour market information and trends in the Canadian petroleum industry. PetroLMI specializes in providing petroleum labour market data, analysis and insights, as well as occupation profiles and other resources for workforce and career planning.
Funded by the Government of Canada’s Sectoral Initiatives Program.
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