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Labour capacity stretched in the US Oil & Gas construction sector

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The stress on labor capacity across the global Oil & Gas construction markets is a cause for concern. It’s seriously impacting forecasted project costs. In fact, several mega capital projects have either been delayed or cancelled (For example: Shell’s Louisiana GTL plant) due to rising costs and uncertain long term profitability projections. - Jess Potts

The stress on labor capacity across the global Oil & Gas construction markets is a cause for concern. It’s seriously impacting forecasted project costs. In fact, several mega capital projects have either been delayed or cancelled (For example: Shell’s Louisiana GTL plant) due to rising costs and uncertain long term profitability projections. With demand continuing to expand exponentially due to a boom in LNG exports, construction firms are under tremendous pressure to retain and recruit talent. The infrastructure construction companies in the US must create a technically savvy talent pool to serve the sectors human resources requirements in the long term. For instance, in 2008, 3.8 % of the total construction work force was absorbed by the Oil & Gas construction segment; it grew to 6.4% by 2012. As per FMI’s projections, nearly 10% of the workforce in the US would have switched to this booming segment of the industry by 2017. Cut throat competition within the sector is forcing construction companies to reassess their human capital requirements, and develop strategies to maximize their ability to acquire and retain top notch talent. In other instances, the scarcity of labor is aggravated by the limited availability of specific technical expertise (Petroleum Engineers, Pipefitters, Welders, Controls Electricians, Supervisors and Managers would be in demand).

Between 2012 and 2017 the demand for key technical skills would be as follows:

Petroleum Engineers: 11,500
Pipefitters: 21,100
Welders: 13,600
Supervisors: 19,000

In the near future, the industry must fine tune its focus in terms of recruitment, training and retention. Any firm that doesn’t adapt to the changing scenarios would miss the growth opportunities. Thereby, exceptional human capital management would be the game changer in determining the industries bellwether.

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