The Hays Oil & Gas Global Job Index has revealed a strong third quarter result despite some economic and seasonal headwinds for the industry.
The Index, which charts the number of jobs posted on nine oil and gas portals around the world, stood at 1.60 in September – a shade off the all-time peak in May 2012 of 1.63. The Index was established in October 2010 when it was set at 1. All subsequent months are then compared to this base.
The steady job postings were amidst the Northern Hemisphere’s summer vacation period, which typically stalls job postings in quarter three. This was reflected in the number of job postings being flat through July and August, and only starting to rise in September, once the holiday period had passed.
“While European debt worries continue to weigh on markets, it is the relative slow pace of growth in China that’s had the biggest impact,” says Matt Underhill, Managing Director of Hays Oil & Gas.
“But at this stage, the main impact has been an easing of the acute skill shortages that existed coming into the quarter. The fall of other commodity prices has also taken the edge off many skills shortages.
“The Index remained at a positive level, a shade off its all time peak in May 2012, which is welcome news, and a positive indication of recruitment activity for the remainder of the year,” says Matt.
“Also boosting confidence and driving jobs postings in the quarter ahead will be the approach of the Northern Hemisphere’s winter, which will see built up stocks diminish, bolstering the oil price and driving confidence. There will also be a leadership change in China, which is widely thought to bring with it new economic investment.”
According to Matt, the European debt concerns will continue to weigh on confidence in the oil markets, however, without any major downgrades it will remain in the background for the time being.
Trends by region
As well as a global perspective, the Hays Oil & Gas Global Job Index also provides a measure of month-to-month jobs posted by region. The figures from October to December 2012 reveal:
EUROPE
Job postings in Europe followed global demand, and thus we saw a plateau in July and August followed by a rise in September back to peak levels. Despite reducing oil and gas production in the UK, confidence in the oil and gas employment market is still generally high in the region, with job postings pushing the Index back over 2.00.
Europe’s recruitment activity is heavily driven by online portals and this is reflected in significant job postings in comparison to other continents. The competition for talent in Europe is also fierce, with many vacancies advertised multiple times. In line with the North American market, there is also an aging workforce issue, which will see a high proportion of talent retire over the next 10 to 15 years. These factors contribute to the high Index as employers compete for a diminishing talent pool.
AFRICA
Despite returning poor June figures, Africa’s Index came back strongly this quarter hitting 1.78 in July and maintaining a similar level since.
Offshore developments in West Africa continue to drive growth along with the move to nationalise the workforce in many of these countries. East Africa is starting to emerge as a hiring hub with discoveries in Mozambique, Tanzania and Kenya. The markets in North Africa are slowly but steadily recovering after the social unrest of 2011.
RUSSIA & CIS
Following strong growth last quarter, this quarter saw job postings ease only slightly. Russia’s recruitment market has been buoyant following a quieter year in 2011 and competition for the small pool of well qualified, experienced local professionals in the industry is acute.
The projects going on in the Yamal region are driving vacancy numbers in particular in Russia. In the CIS countries hiring is steady with localisation driving volume postings.
MIDDLE EAST
The EID festival fell in August this year; consequently the region had a quiet month in terms of online job postings. However, September rebounded strongly with the Index hitting 1.50, an all time high since we started logging the job posting numbers.
In October we saw the release of budgets for 2013 by many of the region’s operators and this gave impetus to a long-awaited new round of hiring. In particular, demand was highest for those individuals with EOR experience and those with a track record in non-conventional fields.
ASIA
Job postings came off the 1.86 high of the previous quarter, although the Index still maintained a very positive average of 1.63. This reflects a somewhat calmer market than we have recently seen, as employers awaits new project start dates.
Malaysia has been actively promoting itself as a regional hub for oil field services, and is therefore growing both upstream production and downstream process capability.
AUSTRALASIA
With the majority of mega projects in Australia’s burgeoning LNG market now through FID, vacancy activity continues to roll from one project to another. The major development this year has seen several new projects come to construction in Queensland and this has seen recruitment activity on the East Coast rise to match the elevated levels seen in the West over the last few years. Consequently the local Index has maintained its level above 1.5 for six consecutive months. The Index over the quarter from July to September fluctuated between 1.57 and 1.69, reflecting high demand.
Project execution staff are in most demand as EPCM’s ramp up their headcount for the construction phase.
NORTH AMERICA
In July the Index in North America fell slightly from its high in the previous quarter, although it rallied through August and September to climb back to a peak over 1.80. Exploration continues to drive activity with those in geo-sciences and reservoir engineering in shortest supply. Non-conventional projects are also prevalent and these are pulling skills outside of the more traditional ‘oil towns’ of Houston and Calgary. A number of LNG projects are also now starting to materialise, although we are some way from these requiring large scale hiring.
SOUTH AMERICA
In the North of the continent, Colombia continues to drive activity and offset any falls in Venezuela. There are a flood of new businesses entering Bogota and hiring staff.
South America has been a relatively slow adopter to online job postings; however, Colombia is bucking the trend with relatively high levels of activity.
In Brazil we had the welcome news of the first oil license auctions since 2008. Whilst the project development market had remained busy (driven by subsea activity in the main) we are now expecting an increase in E&P vacancies as a consequence of these auctions.