Will Energy Workers Return to Industry As Drilling Picks Up?

UH Survey Finds Many Were Turned Off by the Way They Were Treated

Oil prices may be stabilizing, but research from the University of Houston suggests a sizeable percentage of the estimated 230,000 people worldwide who lost industry jobs since 2014 may not want to go back.

In early results from an ongoing study of workers laid off over the past two years, almost two-thirds of those who had found new jobs are working outside the industry. Most remained unemployed.

Just 13 percent had returned to oil and gas companies, which researchers attributed in part to continued industry cutbacks. But they said other factors are also at play, including workers’ sense that the layoffs were poorly handled.

That could make it harder to find good job candidates as hiring ticks back up, said Christiane Spitzmuller, principal investigator with the Center for Applied Psychological Research at UH.  

“A good number of people are ‘lost’ to other industries,” she said. “This will translate into high recruitment and training costs for new hires, who may not have had prior energy industry jobs and who may lack industry specific skills.”

Spitzmuller conducted the project with Caitlin Porter, assistant professor of psychology, UH doctoral student Zachary Roberts and Bob Newhouse, an industry consultant and former chief learning officer for an offshore driller.

It may not matter in the short-term whether some workers choose to leave the field, as companies are only slowly ramping up production and payroll. But the findings come as the industry faces a skills gap caused by widespread layoffs during the 1980’s oil bust and the pending retirement of baby boomers in the workforce. Replacing them could become more difficult.

“People see the industry as having low job security,” Porter said.

Survey participants were recruited through industry associations and networking websites, seeking people who were at least 18 years old and had lost jobs in the oil and gas industry within the past two years. These results came from surveys returned by 720 people, with a median age of 53. Of the respondents, 87 percent were white, and 89 percent were male. More than 73 percent had a college degree.

Of those surveyed, 13 percent had found new jobs in the industry, while 25 percent had found work in other fields; 62 percent remained unemployed.

Other findings included:

  • 71 percent said they are anxious about the industry’s future.
  • Two-thirds said they felt their former employer’s discharge procedures were biased and did not allow them to share their views.
  • 55 percent said they are considering leaving the industry within the next year.

Newhouse said taken together, the findings suggest human resources and management practices have significant impact on employee perception of the industry.” That perception, he said, goes directly to the resiliency of the workforce.

“Most of the major players have gotten pretty good at messaging,” he said, issuing early warnings about looming layoffs when prices drop. But how people are treated during a layoff varies dramatically, even within the same company, he said.

The researchers recommend better internal communication about how downsizing decisions are made, and how people who are cut will be treated, can improve workers’ perceptions of the industry.

Porter said companies generally don’t see an economic benefit for months after layoffs because of severance payments and other associated costs. “The cost in laying people off may be bigger than the benefit,” she said.

The researchers acknowledge the assistance of Oilpro and the International Association of Drilling Contractors for publishing links support to the survey."


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