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Tag Archives: retention

July 16, 2012

Rania Spooner

The Australian oil and gas sector needs about 90,000 additional workers over the next four years, according to the federal government.Energy-producing nations, including Australia, are competing fiercely for scarce labour. Photo: Bloomberg

AS HE pushes into his mid-60s, no one – least of all employers – could admonish Rob Anderson for some well-earned golfing or a caravan-mounted souvenir spoon collection. But instead of spending his days out on the links, the oil and gas veteran – a fixture on the scene for 40 years – opted to keep working full time on an offshore project in Papua New Guinea.

He still receives several job offers each week, as employers fight to keep his generation in the industry, prolonging an almost inevitable generational gap in experienced, skilled workers.

The Australian oil and gas sector needs about 90,000 additional workers over the next four years, according to the federal government.

The bolstered labour force would be needed to build and maintain seven big, additional liquefied natural gas projects worth more than $290 billion in Western Australia, Queensland and the Northern Territory.

And LNG is just one piece of the broader, growing Australian energy landscape.

To find those skilled workers, hungry gas-producing nations are competing fiercely for scarce labour and – according to global recruiters and academics – increasingly looking to people well into the usual retirement age, offering them big incentives to stay in the game.

In fact, demand for geologists, engineers, project managers and senior designers is at an all-time high, according to, the largest online energy job board in the world.

Australian universities and TAFEs produce about 9500 engineering graduates each year, compared with annual national demand of as high as 20,000 a year, according to the results of a Senate inquiry into engineering skills shortages released last Thursday.

And Australia must compete globally to retain these scarce graduates, with skills shortages being felt world-wide. figures show vacancies for engineers have increased by 71 per cent globally in the past year, while oil and gas job advertisements on the Australian site increased by a staggering 94 per cent.

”The demand that is there for oil and gas production globally outstrips the skills – and it’s as simple as that,” managing director Mark Guest said.

”The skills are retiring out of the industry and the only way you can stop them retiring is to increase their incentives to stay, which is usually financial, which pushes the whole cost base of the industry up.”

Curtin University department of petroleum engineering head Brian Evans said he knew of people still working in the industry past the age of 70, even though they could have retired more than comfortably at 50.

”I see many of the people who would normally retire take their superannuation and become consultants back in the industry,” Professor Evans said. ”Not every day of the week, though, they’re keeping one or two days open for their golf.”

Mr Guest said employers were left with little choice other than to lure back retirees because of the scarcity of the next generation of workers, who should be there to replace the skilled seniors now reaching their 60s and 70s.

It’s a global phenomenon known as ”the big crew change” and although it has been a concern for the oil and gas industry for more than 10 years, the effects of this generational gap are expected to be fully felt in the next five years as Mr Anderson’s generation goes into permanent retirement.

Mr Guest said hiring and training contractions had come in the late 1980s and early ’90s, when the price of oil dropped to $US10 ($A9.70) a barrel and made many projects unviable.

”In most cases, it was costing more than $US10 to just take it out of the ground,” he said. ”If you’re in that situation, you’re not going to invest in new installations or in production, and if the industry isn’t producing, skills aren’t required so people didn’t enter the industry, they went into other careers and that’s why you’ve got this big flat spot – the big crew change. There’s nobody there.”

Although Australia offers competitive salaries, the higher cost of living in Perth, for example, compared with Canada, the US and parts of Europe can work against employers seeking to lure or retain workers in Australia, Professor Evans said.

”The average 10-year-qualified petroleum engineering person in Perth is on about $250,000,” he said. ”And that’s the average, that’s nothing fancy; I know some of them are up around $300,000. But they’re not that impressed because it costs so much more to live in Perth than it does in the US.”

There has been a 50 per cent increase in the uptake for Curtin’s four-year petroleum engineering undergraduate program in the two years since the program was created, according to Professor Evans, but the numbers are still relatively low.

About 25 students enrolled in 2010; nearly 50 in 2012; and the demand for all of them from oil and gas graduate programs remained high.

”All of my present fourth-year students have got jobs,” Professor Evans said.

”All have job offers before even taking their final semester – they’re across the board with Chevron, Woodside, Halliburton and the service industry – the whole range of the industry.”

Professor Evans’ graduate students tend to start on $80,000 but could be bumped up by $30,000 within six months and could look forward to a salary of $160,000 by their second year out of university.

But these graduates would need years of on-the-job experience working with seasoned industry professionals before they could start to fill senior roles.

It is these seasoned industry professionals who are now considering retirement.

Mr Guest believes senior workers need to be imported. These workers would help train up the next generation of skilled Australian graduates.

He admits this would not be music to the ears of Western Australia’s unions, which have already campaigned hard against foreign labour on resource projects.

”But if you don’t bring these people in now, it won’t just be senior people you’ll have to bring in, it will be graduates from other countries as well,” he said.

”And I think that’s where your unions will be challenging it a bit more than they are now.

”If you don’t have the local talent, then it’s inevitable, because other countries are developing these people.”

The Senate inquiry’s findings suggest employers are of the same view as Mr Guest, with employee-sponsored 457 visas for engineers more than doubling in seven years to nearly 7000 in the 2010-11 financial year.

Mr Anderson said he had watched some of his counterparts retire, but many his age still worked full time.

”I’ve thought about it but I don’t think there are many people who have gotten so much enjoyment out of their work for 40 odd years,” he said.

”If companies took a long-term view, they could have been training them and keeping them multiskilled and then they are more useful when the upturn comes, because the upturn will always come.”

Read more:

April 15, 2009

About one-third of employees who leave their employers to start a new job weren’t even looking for one.

Research by UniSA’s Centre for Human Resource Management has found that 31 per cent of organisational leavers are lured away by an unexpected job offer.

“With those poaching rates, employers had started to think that high turnover rates were unavoidable,” said Co-Director of the Centre, Professor Carol Kulik. “However that would not be true for everyone.

“For about half of those poached leavers, the job offer was the only factor motivating their move. They had been happy with their current employer until an attractive alternative promising more responsibility or better pay had created an irresistible pull.

“For this group, turnover probably was unavoidable. However, these leavers maintained considerable goodwill towards their former employer and could be a valuable resource for spreading positive word of month.”

On the other hand, Professor Kulik and fellow researchers Dr Gerry Treuren and Professor Prashant Bordia, believe that for the other half of the poached leavers the turnover could have been avoided. In exit interviews, these employees described two things that motivated their move.

“The first was the job offer, creating a pull,” Dr Treuren explains. “They would have resisted the pull, except that it occurred in close proximity to some kind of push experience from inside the organisation such as a bad experience with their manager or the performance appraisal process.

“These leavers consistently said that if the organisation had only addressed that one specific problem, they would have stayed. So if the employer had acted promptly, they might have been able to keep 15 per cent of their leavers.”

The researchers studied exit interviews, in which employees explained their reasons for leaving. The study was prompted by the unprecedented mobility of employees during the past decade, caused by Australia’s skilled and unskilled labour shortage. This research project is just one of several at the Centre that is examining attraction and retention.

The researchers found five distinct groups of leavers. One group was the poached leavers. For a second group, the major reason for staff leaving the organisation was to pursue a plan that pre-dated their employment, for example, to go overseas once they had saved enough money, to start their own business, to move interstate, or to follow a life-long dream.

“For this 22 per cent, the decision to leave the organisation has little to do with their actual employment,” Prof Kulik said.

About 15 per cent experienced a push factor alone – something that made it impossible for them to continue working. Usually the push was something that occurred inside the organisation, but a small number left due to personal factors that caused them to not want to work any more, such as a family illness.

“Another 7 per cent had a bad experience at work, leading them to leave the job without another one to go to yet, while 25 per cent left because they were dissatisfied and had found a new job.

“In this study, just over half of the staff who left the organisation did so because of factors largely not related to their job. But that leaves a lot of other employees who left because of a bad experience such as being passed over for a promotion, or because of ongoing unresolved issues.”

Dr Treuren says that organisations could learn some valuable lessons by studying their own exit interview responses.

“Exit interviews are very useful for an organisation that is trying to understand its turnover. By identifying the incidents that lead to resignation, the employer can design appropriate intervention strategies.”

For more on this:

Email me (Gerry, at for a copy of the paper.
Download a presentation on reasons for turnover from:

Could HR practitioners be making bad decisions as well?
07 April 2009 6:53am

No matter how bad the economy seems, it’s always a mistake to accept poor-quality clients, says business coach Ric Willmot.

Willmot, the CEO of Executive Wisdom Consulting Group, says some “really bad decisions” are being made in the corporate arena right now – particularly in the professional and personal services sectors.

The mistakes he has witnessed recently include:

reducing or discounting fees;

pressuring the staff left after redundancies to accept increased workloads;

adopting pricing tactics such as adding credit card service and administrative fees; and

sending reminder notices and payment demand letters – or making abrupt telephone calls chasing payment – within 14 days of an invoice being sent.

Businesses will continue to succeed if they can deliver their service to clients in a way that reaches their objectives, Willmot says. “Make the client significantly better because they have you.”

He says businesses should:

Rid themselves of non-quality clients. “I call them X-class clients; those clients who are low value to you and your business. They consume your corporate capacity. Capacity that will be much better served invested in A-class clients who do appreciate your value, and do good, regular business with you, and refer good people to you.”

Be prudent with the new clients they accept. “You do not have to accept every prospect who comes to your door. A poor prospect never makes a good client. It’s not about more business in this economy, it’s about better business. The litmus test: if the economy couldn’t get any better… would you still want them as a client?”

Understand the difference between revenue and profitability. “They are frequently confused.”

Avoid indiscriminate cost cutting. “Now is the time you should be increasing some expenditure, by investing in innovation, product and service development, human talent and retention of staff and customers.”

Re-tool. “This is a term from the days of Frederick Winslow Taylor referring to plant and machinery. I use the term specifically referring to people.”

Build relationships with their clients. “Strong relationships.”

In addition to the above, Willmot says, leaders should realise that procrastination poses a bigger threat to their success than the economic situation does.

To help build business, he says, managers should:
send letters not email if you really want your client to read your correspondence;

speak at business networking functions to expand your reach;

initiate some low-cost PR measures;

reach out laterally to your existing customers by providing additional products and services;

attend a seminar or training course;

write a press release for the local media; and

whether you are travelling across town or across the nation, leverage the trip and arrange to meet other people who haven’t bought from you yet.

20 March 2009 8:22am

Employers that enforce hiring freezes during a downturn run the risk of anarchic recruitment systems and their costs spiralling out of control, says HR expert Steven Dahl.

Dahl, the founder and managing director of HR solutions provider Onetest, says it’s a “myth” that recruitment freezes protect an organisation from escalating recruitment costs.

“We have to remember and be realistic that even in a recession, people get sick, they have to leave work, they move interstate… Even during a freeze, organisations will be recruiting. The volume of the recruitment might not be as high as it has been in past years, but the critical roles will still need to be re-hired.

“Turnover will still occur even in a recession. When recruitment processes are put on ice, recruitment becomes ad hoc and inconsistent, [leading to] ‘recruitment anarchy’.”

In a webinar this week, he explained how during a time when HR teams might be downsizing or “busy trying to do more with less”, normal recruitment processes are put on ice. When a line manager needs to fill a business-critical role – quickly – they will bypass HR and send the job to an external agency rather than be “inundated” with applications, resulting in a cost between $10,000 and $15,000 (depending on the salary).

“Before too long other managers are following suit and… even though they were in the midst of a recruitment freeze designed to save money and cut costs, have ended up spending several hundred thousand dollars, just in replacement recruitment.”

Now is not the time to let recruitment systems and processes slip, Dahl says. “We know that ad hoc rec ultimately leads to higher costs and greater variability of people that we bring into the organisation.

“We also know from life experience that processes that are more consistent deliver results… And when processes aren’t clearly defined, and we have people who are busy, stressed or time-poor, they tend to do their own thing, and when they do their own thing they tend not to do it particularly well.”

An employer can “end up with as many different selection processes as they have line mangers recruiting, and this isn’t a good thing. If an organisation has right-sized or downsized or retrenched workers over the last six months, as we come out of this recession it has an enormous opportunity to actually recruit or refill its stocks of employees with more of the right people.”

Applications influx an opportunity, not a challenge
Dahl says that while some employers are now shutting down the recruitment pages of their websites due to overwhelming numbers of job applications, this is not the right strategy.

Instead, they should set up online systems to capture all the applications and create a “talent pool” for future recruitment needs.

“What we should be looking at doing is opening it up and getting as many applicants in as we possibly can, registering their interest for future job opportunities, and building that talent pool of five-, ten-, fifteen-thousand candidates which can be accessed for future recruitment needs.

“I can only stress too much to organisations that they don’t turn their back on collecting applications during what I know is a very tough time for business. Whilst you might not be recruiting as feverishly as you were in the last 12 months, you will need to recruit replacement roles; we will come out of the recession and when we do, and you need to recruit more people, this is a great low-cost way to tap in and get access to your very own ready-made talent pool.

“Building your talent pool is going to give you a huge commercial advantage over your competitors. It’s going to help you to fill roles faster, and significantly bring down your recruitment cost per hire.”

Keep the pool “warm”
Dahl warns that “talent pools do ‘go off'” so employers must ensure they stay in touch with the database on a regular basis.

“Send notifications about what’s happening in the organisation about new roles and opportunities that are coming up. You still need to communicate and engage with your talent pool to keep them interested, live and active. A good opportunity will always tempt or entice a jobseeker to take another look, so keep them warm and keep them engaged.”