Layoffs To Create Labor Shortage Problem In The Oil And Gas Industry

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A majority of oil and gas companies are reeling under the impact of low crude oil prices. The layoffs announced by these companies are likely to have a lasting impact on the sector, as many of these workers have decided not to return to this sector. The valuable skills that these workers have gained over the years will be lost, as they choose to find jobs in other industries due to the stable income they can expect there.

Laid off Oil And Gas Workers With Transferable Skills May Not Return

Many companies are unaware of the effect that layoffs will have in the long-term, when it comes to the high cost of turnovers. Finding talent when the oil prices recover and the training of new hires will prove to be a costly affair. Workers having transferable skills are likely to switch jobs in companies that are more stable, where can enjoy better job security.

As shared in a recent article on FuelFix:

“They absolutely do not realize how high the cost of turnover is,” Appelbaum said.

Some employees, especially those with transferable skills such as chief financial officers or IT personnel, could find jobs in other industries and choose not to return. They may be weary of the sector’s feast-and-famine cyclical nature.”

Labor Constraints Can Prove To Be A Bottleneck

According to a survey conducted by Evercore ISI, a research firm, a majority of the laid off oil and gas workers have found work in other industries. This could lead to labor constraints when the oil and gas industry starts recovering. Workers who are out of jobs for 3-4 months due to the oil bust have found jobs in diverse sectors like construction, engineering consulting and chemicals. They have no plans of returning to the oil and gas sector, even if the oil and gas industry recovers.

Collin Eaton said in a recent article:

“Labor constraints will be an ongoing bottleneck that will slow and prolong the North American activity recovery,” James West, an oil field analyst at Evercore, said in a note to clients Tuesday. “As for the individuals that did not re-enter the oil field, an overwhelming majority have turned their backs on the patch altogether.”

These workers say that even if they were offered better jobs than what they had previously, they would prefer to leave the oil and gas industry. This is why workers need to take a well-informed decision that will grow their career.