Oil & Gas Industry Struggling to Recruit Young Talent
With recent headlines about increased oil prices and the UK’s approval of new North Sea licenses, it would seem oil and gas is booming again. But to the disappointment of baby boomers out there, Gen Z does not think the industry is one that meets the vibe check (translation: it’s not so cool).
US petroleum engineering graduates
Based on a survey conducted by Texas Tech of 25 different schools, the number of US students graduating with petroleum engineering has dropped by 75% since its 2017 peak.
- In just six years, the number of graduates fell from 2600+ to less than 700.
And graduation levels don’t look like they’ll be increasing any time soon – the trend in enrollment of students is also down.
Change in enrollment of petroleum engineering undergraduates
In the past, enrollment trended with oil price: as prices rose, more students want to go into oil and gas disciplines. But recently, although oil prices have increased, enrollment has continued to drop.
It’s not about the money
Petroleum graduates typically make 40% more than software grads, but the drop in enrollment is attributed to the focus on the energy transition.
- Students are increasingly concerned about ESG and the longevity of a career in oil and gas.
And it’s not just the youth: Companies are finding it more and more difficult to attract and retain new employees and contractors. Due to low oil prices and the COVID-19 pandemic, nearly 160,000 workers were laid off in 2020, but the recent spike in oil price hasn’t brought them back.
- In early 2020, there were 707,000 people employed in US oilfields. As of 2022, that number had dropped to 609,000 employees – 100k fewer than pre-pandemic levels.
Energy employment in energy sectors by region (2019)
thousands of employees
In 2019, according to the International Energy Agency, approximately half of the 65 million energy industry workers were employed in renewable energy. Recently however, more workers have shifted into renewable energy and this split is only expected to grow as governments implement more regulations and policies for a net-zero future.
And the IRA: The US Inflation Reduction Act poured billions of investments into the energy transition. As a result, the US Bureau of Labour anticipates there to be a growth of 8% over the next decade for petroleum engineers, which is still faster than average, but doesn’t compare to the growth for wind (44%) and solar technicians (27%).
Zoom out: If oil and gas companies want to ensure they have enough workers to supply the world with energy, they will need to update their recruitment efforts to attract the younger generation.