In these times of high oil prices, the words on the old bumper stickers echo in my brain, “Lord, give me one more boom. I promise not to waste it this time.” Do we have the right perspective and skills to avoid wasting the current boom? After almost 2 decades of a business environment in which we had surplus technical people and little money, do we know what to do when we have buckets of money and technical talent is scarce?
The majority of today’s managers honed their skills during the downturn that lasted from the mid-1980s until about 3 years ago. During those long, lean years, many managers were charged with harvesting existing assets. These individuals rose through the system tightly managing costs and pinching every penny.

For many years, the industry was contracting through endless rounds of “right-sizing.” Employee relations became human resources with an emphasis on serving management rather than responding to employee’s issues. A key human resources function was to ensure that layoffs complied with legal requirements with respect to not discriminating against a protected group.

People with oil-industry specific technical skills such as earth scientists and petroleum engineers had relatively few alternatives. In contrast, those with business skills had greater ability to switch to other industries. Thus, business skills were more highly valued and rewarded than technical skills. As a compensation expert told me, we don’t pay more just because the work is more difficult.

Now the job market has completely shifted. The technical experts, who just a few years ago had the fewest alternatives are now the most highly sought after. With skyrocketing rig rates, those with skills that directly impact rig time such as drillers and completion engineers command the highest premiums.

During the long lean years, those technical experts who stayed in our industry laid low, kept quiet and endured unpleasant treatment from supervisors just to survive. Many managers thought it was completely reasonable to expect mature technical employees to use their own time to maintain and enrich their skills. Surprisingly, I still hear from technical experts who even now have been denied permission to attend international conferences because of travel costs. US-based companies can no longer expect their technical people to acquire all the training they need at domestic conferences.

The non-technical people assigned to supervise technical employees sometimes fail to appreciate that continuing education is essential for technologists to stay competitive in their disciplines. I’ve heard some people complain that their bosses are much more willing to approve non-technical training than important technical training.

“Harvest mode” for personnel also meant that very few new graduates were hired. Recruiting functions became atrophied. Since there were more job applicants than jobs, human resources personnel were more worried about the cost and manpower required to process unsolicited resumes than proactively seeking qualified applicants.

Now companies are looking to their human resources departments to assist in recruiting a new generation of technical talent. Turning the human resources professionals who have long supported staff reduction activities into recruiters is like turning a drought control board into a flood control board. On one level the human resources staff members understand they are facing a new challenge, but on a gut level they don’t fully realize how many things have changed and don’t necessarily respond appropriately.

Across the industry, the small number of new hires meant that the market for introductory training courses was small. Now, in response to the large influx of inexperienced hires, companies and consortia are scrambling to develop new training programs and to find people to teach them.

Younger employees recognize the importance of training. However, some report that, even if funds have been included in the budget for training, job pressures result in their not being given the time to take the courses they need. I know some younger professionals who are looking for other positions because they have been denied time for training. Non-technical management doesn’t always grasp how critical ongoing technical training and conferences are for technologists.

In the old, tight-money environment of low oil prices, financial skills were more highly valued than technical skills. A legacy of this situation is accountants running technical functions. Can people who are trained to look for how to reduce costs identify and grow technical experts and new business opportunities in the current market?

As small companies expand, there is often a managerial turnover. Many entrepreneurs have been pushed out of the companies they founded because their boards believed that they did not have the skills to lead the more established company. Do managers who were promoted on their cost-cutting skills need retraining to continue to best serve their companies now that cost-cutting is not the most important skill? To build the next generation of technical experts, do we need more technical management?

The energy business has morphed into a new world. We must look beyond our old rules of thumb, definitions of competitors, and systems for managing people and evaluating projects. We need managerial and technical skills that are fit for purpose.