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Oil and Gas Executives and Workers in Malaysia Urged to Brace for Impact of Industry Recession

  • Publish Date: Posted about 5 years ago

With profits in the oil and gas industry in Malaysia expected to take a massive hit this financial year on the back of a global slump in world energy prices, including a 60 percent drop in the price of oil over the last two years, jobs are being shed at a rapid rate. This is only set to be exacerbated as major oil and gas companies scale back or even halt projects. An expected efficiency drive by state-owned oil major Petronas alone, is targeting savings of as much as US$12 billion over what could be a painful four-year period. Executive recruitment company Monroe Consulting Group Malaysia reached out to two highly respected human resources (HR) executives in the oil and gas industry to discuss the turmoil confronting the sector and steps employees could take to mitigate against job losses. And in conclusion, two Monroe recruitment consultants share their views on how the redundancies could impact on the supply of manpower in competing industries.

What have been some of the biggest impacts on recruitment in the oil and gas industry since oil prices began to fall about two years ago?

Fadzilan Mohd Daud, former head of transformation of corporate human resources at Petronas: The obvious statement would be the huge cut in recruitment and the retrenchment of many positions. As the hiring trend is directly influenced by the drop in oil prices, low oil prices have resulted in a lower operational scale directly reducing the need for manpower. Organization within the industry has become more stringent in engaging the talent pool and this has had an impact on the ability to compete with other industries and therefore attract talent.

Nemala Madaven, former organisation effectiveness consultant with Shell: With the decline in oil prices, the obvious answer [to the impact on recruitment] is that those affected are likely to be from major or large oil and gas companies and major service providers. Additionally, there will be a spill-over impact on the wider jobs market, as oil and gas plays an important role in the economy. Many industries are dependent on this sector, including transportation and manufacturing, for example.

At this time, what sorts of positions are under threat in the oil and gas sector, and how can people affected by this mitigate against it?

Fadzilan: The obvious ones are technical positions that directly contribute toward operations. In a pyramid structure, the lower part of the hierarchy would be the first to face the axe, though this will have implications for the entire hierarchy. Therefore, any retrenchment process will be undertaken carefully and involve considerations such as the contribution of the individual personnel. Transparency should be carefully observed during this time to ensure a smooth transition.

Nemala: Technical roles will be affected and additionally other areas can also be impacted. It depends on the strategic direction a global oil and gas organisation takes to journey through the current challenging circumstances. For example, there could be structural changes in how support functions such as finance, human resources and information technology (IT) operate and provide services regionally or globally in the current market that could have implications on employees in this space. Employees should maintain a frame of mind that is ready to rise to whatever circumstances, keep oneself current of developments both within and outside the organisation and be open to learning new competencies to build breadth and depth in their work.

What steps can you recommend that oil and gas professionals take to ensure longevity in the industry?

Fadzilan: At this time, with less roles to be filled, the demands will be even tougher. Employees with any oil and gas company would be advised to improve their performances and reduce the chances of error. The next step would be to adjust their mind-sets … to take ownership of some of the company’s problems and the fortunes of the company. Wherever possible, they should play direct roles in any economically related reorganisation or development and help play the roles of caretakers.

Nemala: Employees should place a greater focus on personal mastery and development by increasing the depth and breadth of their respective areas of expertise. Personal mastery includes awareness to see and accept the situation as it is and less of whining about how it was in the good-old-days. This would be a time for professionals to ‘dig-in’ and stay focussed on productivity and performance whilst staying current on what is developing both within and outside the organisation. Professionalism also means watching one’s own mind and avoiding going on a downward spiral that contributes collectively to what one often called ‘low morale.’ Employers value professional conduct and results, staying focused, clear-minded and objective when the going gets tough versus energy drain through anxiety and worry. Employees need to be prepared to stretch themselves to take on more as well as continue to develop additional competencies, hence availing themselves to more opportunities or add more value in their current positions.

What are the options available to former oil and gas industry employees who are seeking new career opportunities and what realistic expectations should they set?

Fadzilan: First, to diversify their options and not be too selective with opportunities. Consider what is directly in front on them rather than thinking about what might appear in the future. Currently, it’s an employers’ market and not an employee market. Consider taking up roles outside of your previous experience and be flexible in diversifying a portfolio.

Nemala: All personnel should be ready to leave their comfort zone and be prepared to take on the challenge of working in organisations in the current economic climate. As organisations shift to stabilise and position themselves for operating and performing under the current circumstances, the nature of jobs can change. For example, three job positions might become two. This requires the incumbents to learn additional tasks or roles. Projects may start up to re-establish excellence, for example, and these are excellent opportunities in the midst of chaos for an able employee to also roll up one’s sleeves and jump-in to make it happen. Such employees will be valued. Career change can happen within the same organisation! The reality is a number of employers might choose to exit the organisation moving on to opportunities elsewhere or leave on redundancy. Keeping expectations realistic is key. One might be prepared to start on a lower rung in a different industry, for example, and give oneself time to re-establish oneself in a different organisation. Keeping updated with the evolving industry and being familiar with the modern jobs market would be beneficial. This includes E-commerce, which might draw on existing skills. For example, the process thinking of an engineer might be a right fit for a job in logistics or procurement.

What type of skilled professionals from the oil and gas industry can be used in other industries?

Fadzilan: For general engineering, technical skills are easily transferred into such things as manufacturing or construction, for example. Whereas for specific functions such as petroleum engineers and geologists, the options are limited. Therefore, it is important to be reskilled and relearn from the start. To ensure continuous growth, personnel have to be ready or open to gain experience in a new field and learning, even when it falls outside their traditional areas of expertise. By doing so, they will ensure they are trained to meet similar situations and therefore establish a safety net for themselves.

Nemala: This is a very broad question. The more generic and common professionals such as engineers, IT professionals or finance professionals can apply themselves to other industries in relevant jobs. The more specialist professionals like geologists need to be open to a broader scope when viewing opportunities. The vital competencies that are synonymous with oil and gas sector employees that they will bring with them when they go to any other industry is in the space of HSE [health, safety and environment], quality assurance, project management, regulatory compliance, etcetera. Applying this particular knowledge and culture in growing and improving other industries would be a selling point for oil and gas workers.

Avinash Kumar, executive recruitment consultant with Monroe Malaysia’s Industrial Division: The responses from Fadziland and Nemala, both respected industry human resources professionals, clearly highlight the need for oil and gas industry staff and executives to prepare themselves for upcoming waves of restructuring. Workers need to retool and retrain, as do executives, to adapt to the rapidly changing employment landscape. We are talking about a large talent pool here that could be tapped by other industries. These highly trained and experienced potential candidates could be great assets in a range of similar industries, manufacturing being just one. As an international award-winning recruitment company from Malaysia, we are receiving a number of applications and interest from leading companies, including multinational companies.

Michelle Chow, executive recruitment consultant with Monroe Malaysia’s Industrial Division: A key lesson for every oil and gas employee seeking to preserve their current job in the industry and for those actively seeking new career opportunities, the need to expand their horizons has become a necessity. Personnel in the industry have to demonstrate abilities to educate themselves and a willingness to be flexible in diversifying their portfolio to make them more desirable as employees. This serves as a safety net in the event of any further decline in the oil and gas industry. In addition, oil and gas talent could take this opportunity to diversify their skill-sets by earning new certifications or new skills during the current oversupply in the market. Generally, talent could also seek out overseas opportunities, as most Malaysians understand English and it’s a common business language.