Table of Contents
The employees engagement in the industry basically means that the employees are fully engrossed in the organization’ s work and procedures and are psychologically attached to the goals of the organization. This aspect is enshrined in the ability of management to offer a conducive environment for employees to exercise their freedom in their respective fields. Oil and gas industry has continuously experienced labor crisis worldwide. In one way, this has resulted from the insufficiency of skilled labor force in the sector. The causes of the looming crisis in the field of skills are manifold. Other sector of the world economies have continuously poached employees from the sector to their respective areas for better pay and working conditions among other favorable considerations. In the United Kingdom (UK), the oil and gas sector is a potential source of employment with employment estimates of 15,000 entrants in the next term of five years. However, the main challenge that has continuously nagged the managements of the firms under this sector is the maintenance of employees, especially the highly competent ones.
As a result, the main concern is the availability of skilled human resource task force. As the sector expands, the competition from other firms increases owing to the variance in the working conditions and the specialty in the training. The recent research by Engineering Construction Industry Training Board (ECITB) and Opito, there exist an acute shortage in the skilled labor force in the Drilling, operating and science companies thus questioning the gradual decrease in the number of skilled employees joining the company and thriving in the companies for a considerable span of time. According to the research done by the ECITB, the output growth rate for the oil and gas producing companies is on the rise with 44% of all the companies s expecting a rise. However, the opposite is true in the fields of management and engineering still experiences a recession. Consequently, this has a significant implication on the employees demands resulting in wage inflation thus an increase in the cost of production. Actually, 90 per cent of all the companies projects for an increased global engagement in the trade with an additional 67 per cent expecting a rise accruing from decommissioning exercise being under taken (International Results Group & Alberta 1994).
According to sir David Edwards, the chief executive officer, ECITB, the deficiency of skilled man power in the sector is a vital issue that needs to be addressed with a matter of urgency. The training of the technicians and the engineers in UK for instance, is still five times below the optimal. The acquiring of skilled man power in the oil and gas sector, has become extremely hard owing to the rising competition. In UK for instance, the number of people working in the sector is currently more than half a million despite the ever increasing demand of the commodity (Rutledge, Wright, & Boardman 2010).
Shortage of Skilled Labor Force
According to the Petroleum Supply Association, (PSA) remissions in the 2012 New Zealand summit, ‘ Discovering the Shortage’, a release of 2012, shortage of skilled human resource is escalating in the sector gradually in virtually all segments of the sector thus calling for urgent attention to arrest the situation before the sector collapse. Indeed, oil and gas industry has continued to experience heavy repercussions. In addition the status of the gas and oil industry in England is highly affected by the employees withdrawal from the sector and cannot sustain any more expansion.
Reliance on the poached employees from other sector s is unreliable as the energy industry continues to lose its competitiveness with regard to other sectors of the Economy. The main challenge results from the labor demands on the gas and oil sector thus discrediting the essence of expansion. According to the latest PSA report, the energy sector of New Zealand is experiencing a boom. As a result, the country has been in a position to excavate more oil and gas deposits that had previously been considered uneconomical. Consequently, the this has resulted in the increased production of the oil companies. The resultant upsurge in the marginal output is a significant implication of the employees willingness to serve the institutions. However, there has been an all round disharmony in the manipulation of the taskforce by the management in comparison with the individual returns on individual workers. As a result, the output per worker gradually decline due to lack of incentives to work. Indeed, this has resulted in many workers shifting to other sectors of the Economy where better appraisals are offered. Nevertheless, the government of New Zealand has extended its support on the sector in order to encourage further exploration of fuel deposits. This has resulted in increased departments of the government which are optimally sourced. (Hamm 1986).
The labor supply in New Zealand has been adversely affected. In the energy sector, the number of Engineers continuously decline owing to the ever rising business activities. This has led to fall-out of trained engineers from the sector into the Businesses which are more rewarding. A part from the looming crisis of skilled labor force, the task force has been characterized by an ageing workforce estimating at 10 per cent resulting from few entrants into the industry. For instance, the previous survey carried out in New Zealand revealed that, more than 30 per cent of the staffs working in the oil and gas sector in New Zealand had a high-toned to abandon their native industries, to work in Australia. This indicates the existing variability of terms and conditions of work
Causes of Gas and Oil Industrial Workers’ Minimal Engagement
The level of engagement of the workers is pegged on a variety of factors. For any employee to maintain their working position and environment there must be some prerequisite requirements that must co-exist with the attachment to the organization under which they serve (Royal & Agnew 2012). These factors vary in accordance with individual tastes and preferences but greatly co-relate. Inadequate motivation of the workers in the sectors has led to the significant decline in the productivity of the sector as well as the fall-out of employees from the industry for other industries. Indeed, there has been a stiff competition of the uptake of employees between oil and gas industry and their competitors. As a result, there is acute shortage of skilled man power in the sector.
According to the recently concluded research by Petroleum and Chemical Engineering section in the Qaboos University, the number of skilled employees in the gas and oil industry has increasingly narrowed down leading to skills crisis. Consequently, this has resulted ifn a formidable challenge of maintaining the highly skilled employees. Indeed, the research unveils the fact that motivation of the employees in the sector cannot be attained in the absence of motivation. To address this challenge, this paper focuses on the issues that needs to be addressed in order to foster employees engagement in the industry. In this regard, this paper seeks to provide some proposed resolutions to empower the sector in the retention of their potential employees and compete favorably with the other sectors which have posed a threat in the recent pas till to date.
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Why is there An Interest in Employees’ Engagement in the Gas and Oil Industry?
The implication of motivation in the gas and oil industry is highly manifested in the ability and the vigor to capture and retain employees. Furthermore, the ability of the firm to retain its key employees spells out the magnitude of its achievable success. To ascertain this statement, a case study of the Omani-based oil company is taken. In this study, the clear outcomes show that, the excellently performing company embraces a number of things. Firstly, it offer better and high level of performance appraisals and recognizes its employees as a key stakeholder in the firm besides empowering them to undertake their mandate in a freely controlled manner. In addition, the type of supervision in place of work plays a significant role in the output realized from the individual employee. Certainly, the study reveals that besides the key role played by the endowment of funds in a highly competitive environment, other non-financial factors also plays a significant role in the achievement of the organization’s target.
According to the Society of Petroleum Engineers (SPE), the greatest challenge in the gas and oil sector is the related conferences and meetings. In the recent past, for instance, the insufficiency of skills in the sector could not accommodate an agenda of the SPE meeting in isolation as it had little weight contrary to the present situation. At the moment, skill looming skills crisis has led to the significant endorsement of the issue into the SPE’S main agenda as the retention of peak performance in the sector continues to be a challenge day in, day out. It has been discovered that the main aspect of good management skill that is lacking in a vast number of managers in the sector is the move to personally motivate their employees. As a result, other efforts to retain them have proved futile (United States 1979).
Besides this, the management in the industry has failed to offer the necessary enabling environment to adequately cater for the interest of the employees (Branham 2005). This has resulted in perverted wave of unwillingness of the employees to provide extra services in their fields besides limiting their output to the minimal level possible. The notion by most managers in the sector, that the employees are motivated by ‘money, money and money’ to adequately retain their prospective employees, remains a great hindrance to the establishment of success in the industry. Indeed, the financial reward of the employees is not sufficient to retain the employees within their working environment and cannot be solely used as a tool to retain the employees within the premises besides multiplying their levels of output. As a result of the falsehood in the managerial platform, majority of the companies are experiencing escalating rates of turnovers.
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Furthermore, oil and gas industry in particular require a high level of indulgence of other support factors besides increasing the level of salaries for their employees. Additionally, the sector has diffuse non-monetary aspects that can be improved to raise the employees performance and retain them in the long-run. The current crisis in the oil and gas industry that has precipitated the upsurge of the skills and number crisis is manifold (Colorado Association Of Public Employees, & Service Employees International Union 2006)
To begin with, there has been a group of external forces. This has been steered by the recent dynamics in the sector (Kambara & Howe 2007). In the recent past, there has been minimal competition in the sector for its market. However due to increased production of the products, the local and intercontinental fuel companies have emerged posing a stiff competition on the recently monopolized market. Indeed, there has been only one major national oil company thus dominating the market not until other firms injected into the market posing a threat to the sustenance of the monopolistic powers. Currently, the number of both regional and integrated, worldwide based industries have found their way into the Omani market leading to the acute constriction of the market outlay. Consequently, majority of the employees have resolved leaving the national and governmental companies to join the upcoming oil and gas companies which are basically owned by the private sector.
National oil and gas companies have in place restrictions to salary increment as opposed to the privately owned companies. This factor among others has led to the outflow of the companies’ top employees. The group has been lured into the private sector by the better terms of work and the considerably good salaries relative to the public sector. Besides the increased competition among the oil and gas companies, the insurgence of multiple oil companies into the market has led to the looming skills crisis in the industry with insufficiency of the engineers and other technical staffs. The aspect of crisis in both the market flooding and the inadequate employees capacity is a feature of the world’s oil and gas industry as revealed by the Omani case study.
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Besides the problem of insufficiency in the supply of skilled labor force, the situation has been worsened by the escalating costs of hiring an experienced technical staff. Indeed, it has been approximated that the cost of hiring experienced personnel is 50 per cent of training an expatriate. Consequently, there is an increase in the local demand as in the case of Omani. The aggregate effect of these factors is the employees abandonment of the oil and gas industry for other sectors with favorable environment and terms of work. Consequently, this has led to increased pressure on the motivation aspect of the employees retention strategy in the sector.
Factors that Motivates the Employees in the Oil and Gas industry
In the oil and gas industry, certain factors encourage the employees motivation and vigor of assignment for the good of the company. These factors revolve around the core of motivational aspect of promoting employees’ output. According to the survey designed and executed in the country, money was put into consideration from the point of view of the employees themselves. Indeed, money was identified as one of the factors that enhances employees’ motivation but absolutely not in isolation. Besides money, there have been key issues that were identified as the causes of loss of vigor for the employees. The engineers for instance revealed that their supervisor I the field less understands their needs and concerns themselves with promoting healthy working environment or not. Furthermore, the better term of performance appraisals and excellent feedback mechanisms, plays a significant role in the career progression of the employee as well as the employees’ retention capacity of the company. The lack of satisfaction on the employees builds on the efforts by the supervisors and the managers leads to the development of inferiority complexities and the feeling of disowning of the firm by the employees (Armstrong 2007).
Furthermore, the employees empowerment is key to their resultant engagement in the organizational goal of production. Indeed, the managers in the industries have extensively overlooked the aspect of the customers’ feeling of welcome and there invaluable contribution to the success of the company. Consequently, there has been a resultant loss of potential employees from the oil and gas sector due to the conflicting edges of ideas between the management and employees.
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In addition, oil and gas industry has had poor administrative and working policies. Indeed, there has been loop holes in setting up clear policies for the companies leading to confusion in the working environment. Safety rules are often violated at the expense of the employees. This minimizes the employees’ incentive to work and participate in the achievement of the company’s target. Additionally, the recognition aspects of the employees has not had been prioritized leading to low esteem in the working environment. These factors has resulted in the gradual diminishing employees engagement in the production fields of oil and gas industry (Maddux 1993).
Importance of the Employees’ Engagement in the Oil and Gas Industry
Employees’ engagement in the oil and gas industry is vital in a number of ways (International Results Group, & Alberta 1994). Indeed, it results in the achievement of the organizational goal. The synchronization of the different working parameters of the industry leads to increased output ratio and the general trend of high achievement. Furthermore, the value of output is beefed up as the employees develop a liking attitude to offer extra services beyond their regular schedule. Consequently, the level of engagement of the employees is multiplied and the target achieved in the long-run. The investment of the companies in the supervisory department is also minimized as the employees develops own initiatives to work and achieve the organizational objective with minimal supervision.
The improvement of both the level of services offered to the employees as well as the additional consideration besides the pay improve the working initiatives and minimizes unnecessary loses. These loses may occur through mechanical breakdown as a result of the employees’ carelessness and the unnecessary overhead cost incurred through the employees’ failure to honor the organizational goals resulting from poor management-employees relationship.
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Furthermore, the level of engagement plays a key role in the establishment of good publicity as the employees paint the clear portrait of the company within and without the company premises. The overall effects of this publicity are the market mobilization and the domination that result thereafter. Consequently, the industry grows to full potential with the incredible manipulation of the resources and the aspect of human resource. The achievement of this level of engagement is pegged on the employees level of engagement which is significantly determined by the sufficiency of the managerial skills to detect and respond to queer employees behaviors which at times are characterized by a ‘go-slow’ thus limiting the productivity.
The sector has suffered a span of employees’ misconception of the main target of the organization. This results from the acute misconception of the idea behind the existence and external forces facing the industry. Consequently, this has resulted in majority of the oil and gas industries collapsing and cutting down their production capacity due to the constricted market and the dominance of other upcoming potential competitors. Additionally, this results from the impersonal relationship of employees with their managers who offer little if any chance for interaction. Consequently, other external factors seep in to take the vacancy left after the mayhem within the oil industry (Buckingham 2008).
Through engagement of the employees, the management create an atmosphere of dialogue where every employees acts as a stakeholder for the company to steer it into the success (International Energy Agency 2001). The disparity existing between the staffs and their immediate heads results to the instability in the areas of production and slows down the pace of growth in production at all levels to the marketing in the long-run. The active participation of the companies in real time analysis of the world oil and gas industry has had a significant implication on the level of productivity.
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The management have remained shield from the actual perception of the employees key motivators and capitalized on the money while neglecting other potential factors for the motivation of their task force. To improve on the employees’ output, the management has to incorporate supplementary training on the technical staff in order to provide incentives to participate in the production fully and lead them to career progression. This will not only increase the companies output outlay, but also boot the production based on the employees devotion to their various duties.
Furthermore, the oil and gas industry should improve their performance appraisal strategies and focus to the increment of output per individual employees through appraisals incentives. Indeed, the accumulative disbursement of the various awards should be incorporated into the management in order to raise performances at different levels and also create a highly competitive working environment and attract potential, high skilled employees from other sector into the fuel industry.
The engagement of the employees is therefore key to the success of the organization (Dineen 1988). Various measures needs to be taken to minimize and cut down the stiff competition in the oil and gas industries by enhancing the competitiveness of the industry through adequate prio-planning and the consultancy with other sectors in order to comprehend the current trends and dynamics in all sectors of the economy with regard to the looming skills and number of employees. This would lead to the tapping of the population parameter of trained and experienced personnels back to the oil industry.
In order to harness the full potential of the employees and to retain them within the company, the company should ensure that the team employees are assigned duties complementing their ability in term of familiarity and engagement (Petroleum Economist Ltd 1996). In this regard, the team heads of the technical staffs should avoid assigning employees duties that are beyond their technical knowhow as well as ones that averts the motives of the employees. This would result in the employees loss of vigor and satisfaction on the area of work. Consequently, the employee is prevalent to detachment from the organization or the company in search for a friendly working environment (Sharkie 2009).
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Besides this, precise communication hierarchy is vital in the management and the promotion of the company’s management as the administration has access to vital information from both within and without the company settings. Constant dialogue between the employees and management or the team leader would also improve the level of performance in the companies as well as promoting interpersonal skills of both the management and employees. This minimizes time wasted due to insufficient information and the resultant loses accruing from the management synergies. The employees should also be allowed to enjoy their personal lives. These aspects offer ample satisfaction and create a working strategy that makes an inbuilt routine for the employees. For instance, the employees early return home formulae may spark a number of advantages in that the company may reap maximum benefits accruing to the employees’ satisfaction. Indeed, the output for the worker is improved in the long-run (Sharkie, 2009).
The performance and acuity of the employees can be improved through freedom to reason and contribute to the modes of operations of the companies. In the oil and gas sector, the mode of processing remains basically the same over the years. However, the ability of the management especially the team leaders to welcome new ways of undertaking different duties would beef up the production and encourage employees to continue serving the firm with a view to extending their prowess. This offers the employees with a feeling of trust and loyalty with regard to their respective management, thus boosts the morale and the willingness to serve in the company for a longer span of time (Williams 2008).