As oil sector ages, firms tune culture to woo younger talent

Doug Pferdehirt, chief executive of the energy services company TechnipFMC, was speaking at the opening session of the Offshore Technology Conference in Houston, touting advances and innovations from shale drilling to liquefied natural gas exports, and urging the oil and gas industry to appeal to the next generation. Then, he looked at the crowd.

“If I’m honest with myself,” he said, “this is not the next generation.”

Pferdehirt raised what has become an increasingly urgent problem for the aging oil and gas sector as baby boomers begin to retire in waves and companies find it difficult to convince young workers who want to save the planet that their industry has afuture, both technologically and sustainably. The exploration and production side of the industry alone could face ashortage of as many as 40,000 engineers, geologists and other technical professionals by 2025, according to Accenture Strategy, a consulting firm.

Workers born between 1981 and 2000 will need to replace a majority of the jobs left open by retirements in the oil, natural gas and petrochemical industries, according to the American Petroleum Institute, a trade organization. But in a survey of science, technology, engineering and mathematics graduates around the world, commissioned by the Abu Dhabi National Oil Company, only 44 percent said they would be interested in careers in oil and gas, compared to 77 percent interested in a career in technology and 58 percent in life sciences and pharmaceuticals.

Talk tech first, oil later

At OTC, recruiting young talent appeared a primary objective for many firms. Holograms that depicted offshore rig technology and interactive touch-screen diagrams dominated the trade floor — as did espresso machines and open-floor-plan-style booths.

Companies, such as the Houston oilfield services company Baker Hughes, pitched themselves as being at the cutting edge of technology while trumpeting workplace cultures that allow employees to work from home and promote diversity and inclusion — all factors that appeal to millennials, the generation born between 1981 and 1996. The stakes are high: If oil and gas companies don’t adapt, young talent will continue flow to tech giants such as Google.

“If you’re a graduate with a digital software background, you have the whole universe of opportunity ahead of you,” said Taylor Shinn, the vice president of ventures and growth at Baker Hughes. “We compete every day against all forms of tech companies” for talent.

But, several technology firms that provide services to the oil and gas industry said companies, particularly large ones, are making the digital transition too slowly. Energy companies are losing engineers and software developers to health care, data analysis and other sectors that are moving much more quickly, said executives at FutureOn, a digital software company for the oil and gas industry.

“Two years ago this industry couldn’t say the word ‘digital,’” said Pål Roppen, FutureOn’s CEO. “But, if you hand a 25-year-old engineer a 25-page report, he’s not going to read it. Oil and gas companies need to figure out their digital strategy.”

Where engineers once may have been excited by innovations that increased oil and gas production, now they are excited by technology that reduces the environmental and climate impact of fossil fuels, industry executives said. Young talent is motivated by the opportunity to make a positive impact on the world, they said, perhaps more than older generations in the industry.

Phillippe Herve, the vice president of solutions at SparkCognition, an Austin company developing artificial intelligence systems for the oil and gas industry, said he’s seen clients stop referring to themselves as oil and gas companies, instead substituting the word “energy” to try to capture the imaginations of young technologists.

“Oil and gas is not a cool industry,” Herve said. “But we do things that are starting to excite younger generations like moving technology more into energy.”

Don’t use a dirty word

Changing the perception of the oil and gas industry is one of the toughest challenges in recruitment, several companies said. Many young people view both the technology and social conscience of the oil industry as stuck in the past.

Paul Coppinger, oil and gas division president for Weir, a services company, said that perception is inaccurate and one of the most difficult barriers he has to overcome when speaking to recent graduates. On the contrary, he said ,the oil and gas industry is interested in reducing risk to the environment because it saves regulatory costs and improves workplace safety.

“Some people are so emotional about (climate change) it’s hard for them to see that,” said Coppinger, who is based in Texas and focuses recruitment in Houston, Fort Worth and El Paso. “It’s an education process. You have to get over the initial negativity toward hydrocarbons.”

Joseph Groom, 29, a chemical engineer, started his career in oil and gas in 2013. He said his peers are polarized over climate change and the seeming conflict between renewable technologies, such as wind and solar energy, and fossil fuels. But, he added, many don’t realize that these competing energy sectors may work together as oil and gas companies, expecting tighter regulations and higher costs on greenhouse gas emissions, increasingly invest in clean technologies.

Groom, who works in sales for Siemens, an industrial conglomerate with operations in power and natural gas, said he believes that making the transition to a low- or no-carbon world will require the efforts of the entire energy sector, including oil and gas companies, to develop the necessary technology.

“I’d prefer to have a planet in a few years — obviously that is important — but it’s a complex issue,” Groom said. “That’s what draws me to energy. It’s a new challenge, and that’s the piece that makes renew-ables so interesting.”

Money isn’t everything

In addition to a more environmentally conscious workplace, young people said they also want a flexible, relaxed work environment in which they have more control over their time. At Baker Hughes, for example, young engineers asked for a less constricting environment, including more creative breaks in the work day and the option to work remotely. That led the company to add ping pong tables and relax dress codes.

Compensation has changed as well. Where once companies enticed workers with the promise of climbing up the ladder and attaining a high salary, now they emphasize benefits such as health care, vacation and flexible hours, and opportunities to move to different roles throughout the company to gain a diversity of experiences.

“A lot of them want to know that they are creating value and being valued,” said Shinn of Baker Hughes. “If they’re doing advanced computer stuff for long hours of the day, it’s not a big deal to have a 30-minute break to play ping pong. We need to be open to simple things that make a difference to them.”

Jordan Blum contributed to this report. erin.douglas@chron.com twitter.com/ erinmdouglas23