HR Strategies Of Oil And Gas Companies In The Downturn

• Tweet

• Tweet

Many oil and gas companies have realized the need to retain employees and have resorted to wage cuts and caps on bonuses, given the downturn in oil prices. After announcing layoffs across the board, many oil and gas companies have turned their attention towards wage cuts, instead of letting employees go, as they know the importance of having skilled workers, when things start looking up again. Read this article to learn more about the HR strategies of oil and gas companies.

Oil And Gas Producers Reluctant To Layoff More Employees

A majority of oil and gas producers are reluctant to lay off more employees and resorting to cost-cutting strategies that include putting a cap on bonuses and announcing wage cuts to deal with the downward spiralling of oil prices.

Chester Dawson and Benoît Faucon said in a recent article:

“Companies including Occidental Petroleum Corp. and Canadian Natural Resources Ltd. are employing hiring freezes, caps on bonuses, and even across-the-board wage cuts to preserve jobs.”

These oil and gas companies want to avoid a shortage of skilled workers that has followed at the end of every downturn.

Staff Getting Redeployed From Upstream To Downstream

Workers in oil and gas companies who are employed in the upstream sector are getting redeployed to the downstream sector. This is because oil and gas companies have halted further oil and gas exploration activities due to the low crude oil prices. Instead, refining and distribution of oil and gas products continues to see a lot of demand and growth. Workers are expected to multi-task and handle more responsibilities as companies try to remain profitable.

As shared in a recent news article:

“As revenue comes down, staff are being redeployed from upstream to downstream. Staff will also be asked to multi-task but whether they can do that is another thing,” he says. A pickup in hiring activity in the upstream segment is not expected as long as crude oil prices are anaemic.”

The change in HR strategies reflects the stance of oil and gas companies as they struggle to remain profitable, in spite of the low crude oil prices. Instead of laying off employees, they are reducing wages of workers and putting a cap on bonus as part of their cost-cutting strategies.