Scottish oil and gas growth stunted by skills gap

Friday 29 November 2013

Skills shortages in the UK oil and gas sector are hindering the industry’s growth prospects in Scotland, according to the Aberdeen and Grampian Chamber of Commerce (AGCC).

In its 19th Oil and Gas Survey, the organisation found that companies are struggling to find the talent they need. Indeed, challenges in recruitment and retention were cited by more than two out of three contracting companies and nearly 70 per cent of operators, indicating the extent to which skills gaps are beginning to bite in the sector.

Perhaps it is unsurprising that employers are facing their most acute challenges when they look to hire for managerial or professional roles, while skilled and technical positions also proved problematic. Staff are also beginning to look further afield for new opportunities. Half the respondents said they had lost core staff during 2013, while 50 per cent said staff loss was at least partially down to workers moving to other international oil hotspots.

Interestingly, companies are even beginning to look to other industries in a bid to find suitable skills. Three out of ten had looked to other sectors in a bid to recruit suitable candidates, demonstrating a marked rise of 13 percentage points from a year ago. In particular, it was the armed forces that provided the best hunting grounds for recruiters.

Oil and gas contractors are the obvious beneficiaries, as vacancies created by professionals moving jobs require interim support and businesses seek flexible workers to help them cope with long-term talent shortages. In a market where 58 per cent of operators and almost two-thirds of operators have expanded their headcounts in the past year, demand appears even stronger.

But skills deficits are likely to become even more acute in the next few years, the report suggests. More than seven out of ten contracting companies and 50 per cent of the operators surveyed were expecting the number of employees in their organisation to grow over the course of 2014.

Activity in the region is still strong: half the operators surveyed said they had seen an increase in production-led work this year, and generally sentiment was positive regarding activity throughout 2014. Just one operator said they were not working at the optimum level on a global scale, indicating that as global demand for energy grows the sector is not slowing down.

“Of course the good news is that the sector and the north-east continue to see record levels of activity,” says Robert Collier, chief executive of AGCC. “This time, we are reporting our highest ever reported level of companies recruiting in the contracting sector.

“This brings challenges around how vacancies will be filled but we fully expect the sector to meet these challenges and continue to deliver for the north-east, Scottish and UK economies.”

But Kenny Paton, oil and gas partner at study sponsors Bond Dickinson, says the most important point of the study is that it illustrates how far the uncertainty of Scottish independence is also taking its toll.

“This report provides more evidence that oil and gas businesses are concerned about the lack of information,” he explains. “The main concerns that we are being approached about involve personal and corporate tax issues and fiscal policies, but a yes vote could impact companies in a number of ways that they need to factor in to their business planning.”

By Victoria McDonnell

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