Oil Job Market Hasn’t Caught Fire Yet As Drillers Wary Of Recovery
May 4, 2018
Kris Schwendeman flung a leather satchel around his back and hiked across the vast showroom floor of the offshore industry’s largest annual summit, offering handshakes, business cards and resumes in the hope that one of the hundreds of oil companies at Houston’s NRG Park would hire an experienced geologist.
The unemployed offshore specialist is one of thousands of job seekers still working to return to an industry that only 18 months ago was shedding workers by the thousands as oil prices languished and corporate profits tumbled. As U.S. oil prices cruise above $65 a barrel, job seekers like Schwendeman converged on the Offshore Technology Conference, banking on the belief that things must have turned around by now.
They were wrong.
While oil field workers are getting snapped up for jobs in the booming shale plays of West Texas, the market for scientists, engineers and other knowledge-based professions that dominate Houston’s energy workforce have yet to return in any significant numbers. Overall hiring in the oil and gas industry continues to lag behind the rise in oil prices, leaving skilled, experienced workers like Schwendeman to keep networking, passing out resumes and hoping for the phone to ring.
“It really hasn’t picked up yet,” said Schwendeman, who lives in Houston. “I’m just kind of going around and talking to people and seeing what lines of work they’re in and hoping to apply that to what I do.”
As Schwendeman demonstrates, job seekers who have pinned their hopes on the oil market recovery of the past few months are likely to have wait a while longer before companies start increasing the pace of hiring .While U.S. employment in oil and gas extraction is off its recent bottom - a decade low of 144,500 in December - the industry has recovered fewer than 6,000 of the nearly 60,000 jobs lost in oil bust that began in mid-2014, according to hte Labor Department.
In Houston, employment in oil and gas extraction — which encompasses exploration and production companies, but excludes energy services firms — is just reaching a bottom. In March, extraction companies shed another shed another 2,000 jobs in Houston compared to year earlier, bringing total job losses during the downturn that began in 2014 to 20,000, decline of more than one-third, according to the Labor Department.
“There’s a perception of recovery, but there’s really no recovery at this point,” said Ramesh Anand, president of American Personnel Resources in Houston. “It hurts me to see exceptionally qualified Ph.D.s who were talking to me two years ago still meet me today looking for a job.”
Anand, who has recruited workers for the energy industry since the 1980s, said he’s seen more leads for reservoir managers and other skilled professionals in the Middle East than in the United States. Here, instead of combing professional publications, social media and conferences to find workers for oil companies, Anand is sifting through the thousands of resumes that have inundated his clients to help them find the most qualified candidates.
In the meantime, he has watched geologists give up on the industry, becoming financial advisors or finishing master’s degrees in business.
It all comes down to the investment energy companies have made in oil and gas fields in Texas, the Gulf of Mexico and around the world. Even with recent U.S. tax cuts, which most companies returned to their shareholders, spending on oil field exploration and development is not growing enough yet to stir broad job market activity.
Oil companies, analysts added, also are reluctant to accelerate hiring out of worries that crude prices could quickly tumble again. Instead, they are turning to robotics, data analysis, artificical intelligence and other technologies to pump more oil with fewer workers. That’s the biggest reason employment growth at oil explorers hasn’t kept up with rising prices and rig counts.
Joshua Osagie, 20, of Nigeria was in high gear Wednesday afternoon in the NRG Arena, scouring the conference for a job he can take after he graduates with a petroleum engineering degree next year.
Looking for a position pretty much anywhere around the world, the young college student said he’s eager to start working and finally see the massive tools of the offshore industry in action - machinery humming and whirring in the ocean, the real life version of what he’s seen in videos and textbooks in school. But Osagie’s efforts hit roadblocks at OTC.
Most exhibitors shooed him away, he said, directing him to online applications on their websites. Few companies had recruiters on site. If they did, Osagie acknowledged, they were probably looking for more experienced candidates. But Osagie still had his pitch ready.
“I don’t have any experience,” Osagie said, “but I want to get experience from you.”
Some oilfield services companies such as Halliburton of Houston, which slashed its workforce by nearly 40 percent during the recent downturn, have hired back crews for rigs and hydraulic fracturing fleets in West Texas, where drillers are pumping at full tilt. Halliburton’s headcount has risen from 50,000 in 2016 to 55,000 at the end of last year, with much of hiring concentrated in boomtowns of Midland and Odessa, near the Permian Basin, where the workforce has grown slowly and labor shortages have quickly materialized.
But oil companies and service firms that are hiring say fewer of the workers who lost jobs in the downturn are coming back to the industry. And with unemployment near historic lows, they also have found themselves competing for talent with other industries, including technology.
In an effort to become more competitive in the job market, Halliburton recently expanded its benefits package, increasing the number of days an employee can take to care for a sick family member and increasing paid maternity leave to up to 16 weeks and adding paid paternity leave benefits for eight weeks.
“We’re losing people to Google and Amazon,” said Mahesh Puducheri, global vice president of human resources at Halliburton Co. “We’ve got to be thinking about, ‘What am I going to do to retain them?’”