Is the Oil & Gas Industry Ready for the Generational Shift?

The future is calling as a digital dawn is breaking over the oil & gas sector. A necessary transformation is needed to rise to the growing demands and upcoming challenges across the industry. This looming obstacle is something many other industrial sectors are also grappling with – a generational shift within their workforce.

How will this affect both those joining and leaving the field? And how will this issue interact with other industry challenges such as growing environmental expectations and the adoption of new technologies?

We asked some of our industry consultants to share their insights. Read on to discover how Peter Wilson, Giulio Cattarin and Robert (Bob) Hooper see ahead for the future of oil & gas.

The Obstacles Ahead

According to the Global Energy Talent Index Report, an astonishing 80% of workers said they were approached for a job by another company. Coupled with the fact that 20% of the sector’s current workforce is over the age of 55, in the coming decade the oil & gas industry expects to see one in four employees entering retirement.

This raises several alarms. Sirens that must be attended to if the industry hopes to attract and retain talent, industry knowledge and drive the sector into a greener and more technologically advanced future.

The Retiring Generation

Commenting on the upcoming generational shift, Peter Wilson notes that “companies have not invested in training people to have the requisite skills to take over and replace the existing workforce when they retire or leave the sector.” The departure of these individuals from their roles, alongside their informal know-how, knowledge and experience, is a key threat to maintaining the safety, efficiency and reliability of current and future operations. With experienced employees leaving the sector and a lack of investment in new talent, companies risk facing major skill shortages in the years to come.

Attracting and Maintaining New Talent

But what if oil & gas companies did invest properly in training new talent? This would solve the issue, right? The short answer is, not fully.

Aside from training and retaining new talent, the oil & gas sector is struggling overall with its recruitment efforts. “The drive to recruit recent graduates is hampered by the reality that this sector is viewed as being ‘old fashioned’,” says Wilson. “The perception is that the companies haven’t been at the forefront of implementing new technologies and working practices compared to some new and growing business sectors.”

Giulio Cattarin echoes this. “The younger generation expects to be able to find accurate information quickly, and possibly via a mobile device.” In short, oil & gas organizations are losing out to other industries due to their slow uptake of digitalization efforts. Qualified newcomers are looking instead for opportunities in ‘tech-savvy' industries boasting innovation.

Environmental Demands

Another layer to this issue is rising environmental demands. When competing to attract new talent, oil & gas companies may find that newcomers and graduates are opting for roles in sectors with an increased focus on sustainability. Additionally, more is being asked from the sector to align with the environmental goals outlined at the COP28 event.

“There is a huge commitment required to reduce the current level of emissions. Governments, as well as companies, need to work together to make this vision a reality,” says Bob Hooper. He continues to say, “This creates joint opportunities to pave new pathways toward a more sustainable future with cleaner practices.”

It is therefore clear the oil & gas sector must transform and, as Hooper says, “adopt a digitalization strategy,” to achieve compliance with overarching environmental goals and to attract and retain a new workforce.

Overcoming These Obstacles

Although the generational shift brings forward an array of challenges to overcome, there is one standout solution – digitalization.

Cattarin emphasizes that it is not enough to only digitalize processes, but that a full digital solution/transformation should be harnessed. “If you digitize a physical document, but your solution creates a new silo that doesn’t speak with other systems, you are not getting very far,” he adds.

Therefore, you should seek solutions that are easy to use, stored in a single location but have the insights and capabilities to inform various work processes, teams and stakeholders all at the same time.

The Increasing Role of Digitalization

To this point, “the oil and gas sector [still] struggles with information being inconsistent, out-of-date, incomplete and inaccessible,” says Wilson. Remedying this through digitalization will be essential to the success of the sector going forward.

But contrary to popular belief, implementing a digital transformation within an organization doesn't mean completely replacing old work processes and systems. The right solution can seamlessly integrate with existing solutions and corporate systems.

Implemented well, digitalization can support:

Training new talent – Existing or undocumented knowledge and essential training information can be made widely available, smoothing the learning curve for new joiners.
Meeting environmental regulations – Digital solutions will enable oil & gas companies to modernize existing facilities and processes to meet environmental goals and targets.
Addressing the sector’s image problem – Incorporating digital tools will help to attract new talent opting for jobs in forward-thinking and innovation-focused industries with career progression opportunities.
Avoiding human errors and risks – Easily accessible data will help to avoid human errors, increasing the efficiency, safety and reliability of operations.

The Future is Digital

Hexagon’s solutions are designed to digitalize where and when it matters to your organization. Looking to start your digital transformation journey? See how Hexagon technologies can adapt, integrate and help your teams and operations to evolve alongside the oil & gas sector.

To hear more from Peter, Bob and Giulio, check out their recent LinkedIn LIVE discussion, where they delve into this issue in more detail.