Most laidoff energy workers have new jobs, and they may be gone for good.
Many laid-off oil workers have new jobs and say they won’t be returning
Many of the laid-off mechanics and roustabouts that ran drilling rigs during the oil boom have found new jobs in construction, retail and other sectors, and they may not come back even if the industry recovers.
A survey by research firm Evercore ISI showed that more than half of a group of laid-off energy service workers have found work in other industries, and four out of five say they wouldn’t take a job in the oil patch again — even if they could get their old jobs, or better ones, back.
That is potentially a big problem for oil and gas companies looking to ramp up production if oil prices continue their rise. Arecent analysis by the New York investment bank Goldman Sachs projected that the number of drilling rigs in operation could more than double by the end of next year, to about 900, but oil companies may not be able to find enough workers to operate them.
Oil producers and energy services companies, according Goldman Sachs, would have to bring back 80,000 to 100,000 workers in energyrich states to get shale fields pumping greater volumes of oil again, which could prove difficult in a tight U.S. labor market where unemployment is falling and most sectors outside energy are growing. U.S. unemployment stayed below 5 percent in June as employers added 287,000 jobs.
“Labor constraints will be an ongoing bottleneck that will slow and prolong the North American recovery” in drilling, James West, an oil field analyst at Evercore, said in a note to clients.
The two-year oil bust left nearly 150,000 U.S. energy workers out of work. Nearly 80 percent of the workers in Evercore’s survey of 40 former energy industry employees have found work in sectors such as construction (11 percent), engineering consulting (11 percent), chemicals (8 percent) and retail (6 percent). Another 22 percent got jobs in agriculture, technology, financial services and other sectors.
“The result is a massive age and experience disparity between retirement-ready individuals and the recurring waves of ‘green hat’ new hires,” West said.
In the past, it hasn’t taken long for the higher salaries and good benefits of oil field jobs to lure people back to the industry, said Chad Hesters, director of the Houston office of talent consultant Korn Ferry. It’s a mobile workforce, accustomed to pursuing better opportunities as they arise across the state or the country.
But the prolonged nature of this downturn has oil companies worried that they might have to offer even richer packages to get people back when business returns.
“The real reason service companies are worried right now is that when that occurs,” Hesters said, “it makes every project that they’re working on dramatically more expensive.”