ROD DEAN'S 2006 REVIEW
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E & C Hydrocarbon Review - The Global view from Europe. Looking back on 2006 & ahead to 2007.
So its back to the very real challenges of low profile, skills shortages and the development of new technology that are constraining our ability to capitalise on a market which is set to show continued growth in next couple of decades. 'Its not if, its when; we face a ticking time-bomb over skills shortages, caused by an ageing workforce coupled with a lack of young people coming in to science and engineering careers'. At the moment, it is one of the most exciting industries to be in and we need to help get that message out there. It is an incredibly complex and challenging sector with rewarding and long-term career opportunities but few are aware of this. Helping the sector attract and develop people, including mature and young engineers and graduates, is a key priority for us.
The churn rate that the industry has seen in the past year has sometimes meant that companies have had a net change of 50% of their staff in a one year period, turnover has never been higher and salaries have been increasing at rates not seen since the mid 1970’s , when we were also experiencing high national inflation rates. These conditions have brought the return of good times for employees, both staff and agency, which when you consider that some of whom who have experienced the closure of final pension schemes to new employees in the past few years and in a few cases the total closure of their pension schemes altogether is very good news. Another welcome return (that’s if you are a ‘key’ employee) has been the golden hello / handcuffs. We are hearing of instances where some companies are offering ‘golden hellos’ of £30k and upwards + other attractive fringe benefits.
Aggressive poaching was rearing it’s head as we entered 2006 but has really taken off and during the last three months of the year reached new levels of aggression, deviousness and at times ‘sheer cheek’! With final salary pensions fading away we will soon be looking at a Houston style E & C labour force in the UK, although moving around from company to company will still be dictated by more difficult transport links and the gradual grid locking of South East England.
I am pleased to report that our efforts to recruit young people into the industry are beginning to bear fruit. - We can still attract them so we must give the training, support and leadership that any young recruit deserves, in any walk of life.
Another relatively new concept is 'knowledge management or sharing from the veterans before they ride into the sunset. Many of us are now taking the exit interview far more seriously and with all the other ‘lessons learned’ initiatives underway we should hopefully start to see these initiatives begin to pay off in the near future.
That there is a massive boom going on at the moment, there is no doubt, but how long it will last is another matter. There is a view in many quarters that in some areas - probably petrochemicals that most of the major new complexes have now been contracted and a number of the clients are already talking about battening down the hatches ahead of the recession. With the continued uncertainties of final material costs and schedules coupled with uncertain quality of construction companies, closing contracts whilst mitigating risk continues to slow the level of project awards down considerably. This is particularly true of gas and LNG projects where demand is still running at very high levels. With refining it is the faltering margins, coupled with high capital costs which are leading to a number of cancellations or at best major sanction delays.
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