Posted on 12/15/2005 2:49:46 PM PST by Sonny M
HOUSTON - After only a year at CenterPoint Energy, Shelley Daniel has big plans for her career. In 20 years, she sees herself in the company's executive management ranks; by the time she retires, CEO.
This recent college grad, in other words, is exactly what the energy industry is looking for - not just because she's highly motivated, but because she wants to remain in the business.
For years, energy analysts have been warning that their industry will run out of employees faster than it runs out of oil or gas. By some estimates, half the workforce will retire in the next 10 years. But the biggest need, they say, is to replenish the ranks of senior management.
"The need for an infusion of new talent is a real dilemma right now - especially for energy executives," says Gene Morrissy, a senior consultant at RHR International, an executive development firm based in Wood Dale, Ill. "And it's incumbent on them to make sure, once they find that talent, that they are training them for those senior roles."
To be sure, industries of all types face the same demographic squeeze as 79 million baby boomers begin to retire, leaving too many positions open for 48 million Generation Xers to fill. RHR reports that America's 500 largest companies anticipate losing half their senior management in the next five to six years.
But nowhere is the need more acute than in energy, where two decades of boom and bust led to multiple rounds of downsizing and pushed some of the industry's best prospects to find work in more stable sectors. The effects are noticeable.
"I was the tail end of a hiring boom and what follows behind me is a huge gap," says Mat Castaneda, General Electric's vice president and general manager for North America. He says his company is prepared to promote him, but it can't because it can't find anyone qualified to take his current position.
Wanted: 450 different skills
"You cannot exaggerate the magnitude of the problem," says Matthew Simmons, chairman of Simmons & Co., a Houston-based energy investment bank. The industry is incredibly complicated and manpower intensive. This summer, for instance, British Petroleum hired 13 different headhunters to find individuals with one or more of 450 different skills by the end of the year, he adds.
Indeed, just as important as finding new talent is keeping it. The downsizing of the 1990s cleaned out middle management and created little loyalty.
"Every time prices collapsed, the industry downsized again," Mr. Simmons says. "And the new recruits were always the first casualties of the downsizing."
Enrollments fall to 1,500
After one or two layoffs, those recruits found steadier industries - and have not returned to the energy sector. In addition, the number of petroleum engineers graduating from US schools is nowhere near what the industry demands - to say nothing of the schools that have cut their programs altogether. Only 1,500 students are enrolled in petroleum-engineering programs this year, down 85 percent from 20 years ago, says Lane Sloan, chairman of the Global Energy Management Institute at the University of Houston and former CEO of Shell Chemical.
Recognizing the shortfall of top-ranked talent, the university launched this year the nation's first energy-specific executive MBA. The program aims to take those with high potential and significant technical skill and teach them the management and finance skills to advance to senior levels.
"We're not focusing on middle management," says P. David Shields, associate dean for graduate and professional programs at the university's business school. "We're focusing on ... the top guys, the upper echelons."
The first Global Energy MBA class is small - 11 students total - and industry officials point out that it will produce only a fraction of the talent needed. Companies must also play a strong role in recruiting, training, and retaining, Simmons points out.
Still, interest in the university program is building as the word gets out. Ms. Daniel and Mr. Castaneda are enrolled. So is Johnny Ramirez, a marine charter scheduler for Shell Trading. He says his company is well aware of the problem and is putting a lot of emphasis on grooming future management within the company.
Seven years into his career, Mr. Ramirez says he plans on staying with Shell and would like to work his way up to chief financial officer.
The next generation of senior managers may also have to be more well rounded. "A lot of the leaders in the energy industry tend to be technical people who don't really have the acumen to talk to the public," says Lane Sloan, chairman of the university's Global Energy Management Institute and former Shell Chemical CEO. "And on top of that, the only time they're talking to the public is when there is some sort of crisis. They need to get out in front of these things."
The new energy MBA promises just that, which is what drew Kirsten Kennedy to the program. She has a background in geology, but needed a better understanding of the entire industry to move up in her career at Shell Pipeline Company.
"I lacked the finance side of things, the marketing side," she says, preparing for a quiz in oil and gas accounting. "There is such a push for hiring new people right now. I have to set myself apart from the others."
As they used to say, the chair is always filled by a derriere. And there is no shortage of derrieres, neither now nor in the future.
I'm calling BS.
They fire you at the first sign of trouble, you have no job security and its not like they pay better then any other competitive industry in relation to the jobs.
i.e. you can work on wall street, in finance, or whatever, for the same pay, and still know you will have a job in 5 years.
The energy companies created their own problems with none of the top guys ever retiring, and everyone coming up through the ranks getting laid off, every few years.
The energy industry wrote the blueprint on how to screw itself over and make sure its an undesirable field to work in.
I have an MBA, I also have enough common sense to know that the risk to reward working for one of those companies is crap.
I am dealing with newly hired clown in a newly created Energy company using a new drilling company with newly hired hands.
Ping list for the discussion of the politics and social (and sometimes nostalgic) aspects that directly effects Generation Reagan / Generation-X (Those born from 1965-1981) including all the spending previous generations (i.e. The Baby Boomers) are doing that Gen-X and Y will end up paying for.
Freep mail me to be added or dropped. See my home page for details and previous articles.
Is this limited to the oil industry only or is it industry wide?
With government rules and regs who wants to work in any area where you know you will probably get the shaft, sooner rather than later.
In God We Trust.
MERRY CHRISTMAS!
Companies are starved for talent at a time when energy prices are creating a frenzy of activity. I've got three companies chasing me and I'll pick the highest bidder.
Are you on linkedin?
Companies are starved for talent at a time when energy prices are creating a frenzy of activity. I've got three companies chasing me and I'll pick the highest bidder.
The electric side of the equation is not different. There was a sudden awakening in the last 3 years that a lot of very well-trained and experienced people are going to retire very soon. And nobody is coming up in the ranks to replace them.
And of course, massive layoffs at my previous employer put them in a bit of a bind 3 years ago, not just due to a shortage of key employees but also due to apathy on the part of the remaining workforce. I left in 2001. I'm money ahead, a bit more eager, less stressed, and able to enjoy the fact that my present employer didn't cause a major blackout in the northeast. I can't quite say the same about the previous one. :)
Good for you, I and my partner just keep jacking our price up.
No, perhaps because I've never heard of it. What is it? Tell me it's not a designer drug. ;-)
Immigrants from India will fill the spots.
I can't imagine why. Companies dropped qualified people like bad habits when the bottom line moved. I wouldn't even consider working for a company in this day and age without a contract.
bump
Good for you. "The Pantry" seems like a nice place and you get free "Squishies" and roller hotdogs. If that's not your first choice, pick a gas station with a Krispy Kreme donut bin. Mmmmm! Good eatin'!
=)
Ya know.
With all the engineering backgrounds and whatnot.
That would actually make sense.
And amuse me greatly.
Exactly the same problem in the coal industry. My husband is not going back; he has found a new career and although he misses mining, we are not trading security for another round of broken promises.
I suppose neither is going to be confused with "health food", though.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.