By Velda Addison, Hart Energy

If plummeting commodity prices, activity slowdowns and stalled projects were not enough to show the dire straits of the oil and gas industry, news of more layoffs has no doubt added to the sector’s near-term uncertainty—especially for workers.

BP earlier this month said it would cut 5% of its global upstream workforce. The layoffs would trim its upstream workforce by 4,000 to about 20,000 as the company continues to cope with lower oil prices which sank to about $27/bbl on Jan. 20.

It is not alone. Chevron and Shell have shed thousands of positions globally. Oilfield services companies—also pummeled by the worldwide supply glut and unmatched demand—have also laid off workers in droves. Just last month, Schlumberger said it would endure another round of job cuts, having already cut about 20,000 positions. Its peers—Baker Hughes Inc. and Halliburton Co.—were in the same boat, each shedding more than 16,000 positions.

Add Cameron, CGG, National Oilwell Varco and Weatherford along with Devon Energy, Marathon Oil, Noble Energy, Statoil, Trelleborg and Vantage Drilling Co. to the list, as well as many others.

To state the obvious, it’s troubling to see the downturn leave so many people without jobs. Unfortunately, the future could hold more of the same.

Results of a survey conducted by the Hays global recruiting firm shed some light on falling oil prices’ impact on the workforce. The survey was compiled in November 2015 and received responses from 28,000 people from 178 countries: 32 percent of survey respondents said they had been laid off or made redundant. The survey results were released Jan. 18.

These massive layoffs could come back to haunt the industry in the future. When the downturn ends, the industry could be facing a major skills shortage. The survey revealed that 72 percent of those surveyed and who have been laid off are considering looking for work outside of the industry.

“The fall in oil prices is causing more challenges than initially meets the eye—it’s not just about the fall in profitability and the reduction in the industry’s workforce,” said John Faraguna, managing director of Hays Oil & Gas. “Headcount losses and the resulting potential brain drain to the industry, coupled with the inevitable halt in hiring fresh talent, could lead to more acute future skills shortage.”

The survey also showed that:

  • 32 percent feel that skills shortages will be the growing concern. If market conditions improve and the hiring pace picks up, companies could find themselves competing for fewer skilled workers.
  • 41 percent of oil and gas professionals said a company’s reputation is the number one factor when evaluating a job, both for an internal move or with a new employer.
  • 60 percent of respondents who have been laid off or made redundant said they did not receive any assistance from their previous employer in helping them secure a new role. That’s a shame. Though financial assistance would probably help the most, help comes in all forms: referrals to job resources or temp agencies, willingness to serve as a reference for a new job or providing a letter of recommendation for admittance to a college or continuing education program.

“Supporting workers throughout the full work lifecycle, including exiting the business, will help preserve a good reputation, as well as help ensure that when market conditions improve, the employer brand is still attractive,” said Faraguna. “With hiring plans low on the agenda for the foreseeable future, there is a storm gathering within the industry. A pause in hiring today could create an even greater skills shortage than that caused by the downturn of the mid-to-late 1980s.”

His advice to employers is to look at training programs and implement succession plans to retain current staff and strengthen its reputation.

That is advice worth heeding, especially considering the survey also showed that 75 percent of the employed survey respondents said they are currently looking for a new job. Surprising? Not.

Velda Addison can be reached at