Companies respond to the evolving hiring process
Hiring strategies and the recruitment process in today’s upstream industry are changing to keep pace with the shifting supply of qualified workers, increases in compensation expectations and expanding global competition.
Competition is fierce in today’s oil and gas labor market, making the hiring process a stressful, critical situation for all participants. Workers seek ideal companies, and companies seek ideal workers, amid a finite supply of both. Highly qualified, desirable candidates may receive multiple job offers, forcing companies to further distinguish themselves from their competition, offer more generous compensation packages and guard against employee poaching. Meanwhile, both job candidates and HR personnel are leveraging technology throughout the recruitment and hiring processes, all in the hopes of gaining a competitive edge.
From predicting workforce needs to identifying, screening, interviewing and extending offers to job candidates, the hiring process has undergone significant changes in recent years. While some of these recruitment and hiring trends are universal, others are industry- or region-specific. Nevertheless, being aware and responsive to these developments is one way for oil and gas companies to succeed in this war for talent.
PREDICTING MODERN WORKFORCE NEEDS
According to a recent survey, 23.1% of respondents reported that a skills shortage was the greatest threat facing the global oil and gas industry.¹ This is not surprising, given that experts estimate that, over the next decade, North Sea oil and gas operations, alone, could require up to 120,000 new workers, while the Canadian oil and gas industry expects employment growth between 9% and 20% over that same time period.²,³ Likewise, analysts predict that U.S. oil and gas extraction employment could increase by up to 200,000 jobs, by 2017.⁴
On an individual basis, companies must optimize their current staffing needs, while simultaneously anticipating their future ones. Although oil and gas companies have often used predictive analytics to guide asset management, capital project and supply chain decisions, they did not typically deploy these techniques within the HR department.
Today, more forward-thinking companies are applying predictive analytics to talent management. Statistical models, based on historical data, can guide workforce planning, recruitment and retention decisions. While human resource professionals generally collect qualitative information during exit interviews, these new analytical tools can also provide much-needed empirical data. They can detect trends, spot training gaps and identify departments or managers with above-average turnover rates. This information can then help companies make smarter short-term and long-term retention, planning and hiring decisions.
IDENTIFICATION OF CANDIDATES
Once companies determine their immediate hiring needs, they must identify potential candidates. If qualified internal workers are not available, hiring personnel must look outside the organization. While print media, such as local newspapers, were, at one time, primary methods of communicating job openings, technology has significantly broadened the search field.
Given the industry’s global nature, an increasingly popular way of identifying potential job candidates is through the online, or virtual, job fair. Although many companies and associations still sponsor traditional job fairs, particularly on university campuses, these online events can reach a broader audience. Besides providing job listing and CV or résumé uploading capabilities, many of these events include instant chats and webcam interactions. Some virtual career fairs even incorporate real-time features of social networking platforms, such as Facebook and Twitter.
This is not unexpected, given the recent explosion of social media as a recruitment tool. Over 50% of North American hiring managers, recruiters and human resource executives across all industries reported using social media sites to post jobs, and 76% used the sites to find potential job candidates. They listed social media as their top overall method to source candidates, with print media barely registering at all.5 A survey conducted by oilandgaspeople.com, a UK-based recruitment firm, found similar results, with 63% of recruiters considering social media a more effective way to advertise jobs than the print ad.6
Another advantage of social media is its ability to help recruiters identify passive job candidates, or workers who are not actively seeking new employment. In a recent survey of global human resource professionals, 80% cited the ability to recruit passive workers as a reason they are drawn to social media during the recruitment process. Additionally, 69% of respondents reported the ability to target job candidates with specific skill sets as a reason they are attracted to social networking sites.7 Human resource professionals are most likely to choose LinkedIn as their preferred social networking site for recruitment purposes. However, Facebook, Twitter and professional/association networking sites also remain popular, Fig. 1.7
While some potential job candidates are passive, others are actively seeking a new employer. An increasing number of these individuals are researching career opportunities using customizable mobile job apps, accessible via smartphones. One survey found that 22% of all active job candidates used smartphone job search apps in 2013.5 As smartphone usage expands, these statistics are likely to increase.
As far as global oil and gas recruitment is concerned, the impact of company websites, alone, is now twice that of newspapers.8 Although online job boards, company websites and social media platforms have expanded recruitment efforts, technology has not entirely replaced human beings. Word-of-mouth, head hunters and placement agencies still have significant roles in matching oil and gas employers with potential employees, Fig. 2.
Many of these recruiting efforts target specific, high-demand workers currently employed by competitors or contracting companies. The number of skilled workers entering the industry via universities, training programs or other industries is not offsetting the rising number of retirements, making the poaching of employees from other companies increasingly common, and often necessary. Despite how satisfied employees may seem, many can be enticed to switch organizations given the right offer or opportunity.
For instance, a Gulf Research survey found that the main reason that 55% of global upstream oil and gas workers moved from their previous employer, to their current one, was better prospects at their new company. Only 19% expressed dissatisfaction at their previous employer as the top reason that they left, Fig. 3.9 This implies that, with the proper incentives and opportunities, companies can lure qualified workers from competitors.
Workers are even willing to relocate globally for the right opportunity. The 2013 Aberdeen & Grampian Chamber of Commerce Oil and Gas Survey found that 50% of its surveyed operators within the UK Continental Shelf cited losing employees to companies in other global oil regions as a contributing cause of staff loss.10 Therefore, companies must remain vigilant against the poaching of their staff members by competitors, both near and far. This may mean increasing wages and/or extending permanent offers to contract workers, to encourage retention of key personnel.
Companies typically begin the screening process soon after candidates apply for the open positions. This process may involve reviewing CVs or résumés, researching social networking sites and verifying references. Careful upfront research helps ensure that only qualified candidates proceed to the next step, and eventually receive an employment offer.
Although traditional CVs and résumés remain the norm, the use of video résumés has grown. In a recent survey, 45% of hiring managers and recruiters expected video résumés to become more common within the next three years.5 Although some companies, such as Canada-based ACareerJob, have promoted their job recruiting and video résumé job apps at such events as the Offshore Technology Conference in Houston, it remains to be seen whether the oil and gas industry will view the video résumé as an innovative screening tool, or as just a passing fad.
In either case, employers typically look beyond the CV or résumé to learn more about each potential job candidate. Given the vast amount of personal and professional information that many people post online, social networking research can reveal surprising, or even disturbing, details about the job candidate. In fact, a survey conducted by oilandgaspeople.com found that 64% of employers had rejected a candidate after viewing his or her social networking profile.6
Although employers can, indeed, discover a large amount of information about candidates via their social networking sites, 21% of companies actually prohibit their hiring personnel from leveraging social media for this purpose. The main reasons they cited for banning online candidate research were legal risks, discovering information about protected characteristics, and finding information irrelevant to the candidate’s work-related potential or performance.7
While most job candidates honestly describe their professional education and experiences, some do not. Human resource associations are increasingly offering training to help hiring personnel spot deceptions. While résumé exaggerations, embellishments or even lies have always existed, technology has now enabled candidates to go a step further in misleading hiring personnel. For a price, several online companies will provide glowing recommendations, verify employment history at one of their fake “virtual” companies, and sell fraudulent diplomas and transcripts to job seekers. Many of these companies even supply local telephone numbers, physical addresses and regional voice accents to appear more legitimate. In response, HR personnel must remain current on both existing and emerging schemes.
At the appropriate time, hiring personnel will interact with potential candidates via telephone, video or in-person interviews. Company recruiters, interviewers and hiring managers all represent the hiring organization and its culture. The image that they project matters to job candidates, especially those with multiple job offers. Therefore, it is imperative that company personnel conduct the interview process in a professional, responsive way.
Although most people are familiar with in-person interviews, video interviews are gaining in popularity. A 2013 survey of job search candidates found that 18% of respondents participated in a video interview in the past year, twice that of the 2012 rate, with Skype being the preferred interview platform. While only 19% of hiring managers and recruiters conducted video interviews in 2013, more than two-thirds of them expect an increased use of video interviews in the next three years. Three percent of job seekers have even participated in a pre-recorded interview, in which they answered a set of employer-posed questions.5
Regardless of the interview format, interviewers must select their questions carefully. As the workforce becomes more diverse and global, it is increasingly important that recruiters adhere to approved employment and hiring practices. Questions regarding gender, age, religion, marital status and nationality remain off limits in many countries.
CANDIDATE ELIGIBILITY AND JOB OFFERS
Before starting their employment, most companies request that candidates undergo drug testing and verify their work eligibility. Companies must also comply with national and regional employment laws, including anti-discrimination rules and local content mandates. Local content requires that companies purchase a percentage of goods, services and labor from the host nation. In countries such as Brazil, where skilled labor is especially tight, complying with local content laws can be a challenge. However, noncompliance with labor laws can have serious consequences.
In the final offer and negotiation stages, companies must appear generous and flexible. Wage and benefit packages must be competitive, given that oil and gas salaries continue to trend upward. One survey found that over 60% of currently employed global oil and gas workers expected their salaries or pay rates to increase in the near future. Expectations for increased salaries were highest among workers in Asia-Pacific, Australasia and Africa.¹
Companies are even competing for employees that are new to the industry. For instance, the highest paid college discipline within the U.S. is, once again, petroleum engineering. Initial offers continue to climb, with the average starting salary for a petroleum engineering graduate reaching $97,000 in January 2014, Fig 4.11 This was nearly 30% more than the average offer of $74,790 in the summer of 2010, Fig. 4. These trends are not likely to change, as long as the U.S. Bureau of Labor Statistics predicts that employment of petroleum engineers in this country will grow 26% between 2012 and 2022. This is more than twice the 11% average growth rate predicted for all American occupations.12
The anticipated surge in retirements, along with the specialized nature of oil and gas jobs, does nothing but escalate this war for talent. Despite succession planning, training programs and retention initiatives, recruitment of additional outside personnel is inevitable. How companies conduct this process significantly affects the outcomes.
One recent survey found that 75% of active job seekers reported that the quality of the interview process “matters a lot” in regards to their employment decisions, with those in higher income brackets placing even more importance on this factor.13 Overall experiences and impressions are critical. Companies must, therefore, find ways to enhance the quality of the recruitment process to avoid losing the labor battle to their more responsive, tech-savvy and forward-thinking competitors.