How can oil and gas fuel tomorrow as well as today?

Authors

Deborah Byers

EY Americas Sector Leader, US Oil & Gas Leader

Energy sector veteran. Corporate finance and JV professional. Investment advisor. Mother, wife and amateur astronomer.

Rachel Everaard

EY Southwest People Advisory Services Leader, US Oil & Gas People Advisory Services Principal

Energy leader. Passionate proponent of women in business and leadership. Runner. Wife and mother.

5 minute read 18 Jul 2019

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EY research shows companies in the sector have a perception problem, especially when you talk to younger generations.

Americans value oil and gas for important reasons, but those motivations do not necessarily translate into support for the industry’s future, according to our US Oil and Gas Perceptions Survey, a poll in 2017 of 1,200 consumers and 100 industry executives in the US.

The findings pointed to a number of misperceptions, and the opportunity for increased communication between the industry and the public. At a time when energy abundance threatens a permanent oversupply and low prices, the oil and gas industry has a call to action to solve this perception problem for the sake of their future workforce and their success.

Public perceptions can impact the industry’s ability to recruit and retain talent, access capital necessary for growth, and pursue new projects.
Deborah Byers
EY Americas Sector Leader, US Oil & Gas Leader

Societal impacts

The full report on perceptions says that, although industry executives and consumers do not always see eye-to-eye on the traits and favorability of oil and gas, there are some important areas of agreement. Eighty percent of consumers agree that the industry is important to the US economy, and 79% see it as an important job creator. The energy industry as a whole has a supportive base to build on, with a +21% net-positive perception rating. Yet fewer than half of consumers trust the oil and gas industry or would welcome it in their community. Further, a majority (53%) of consumers assert the industry causes problems rather than solves them. More people believe the sector should be taxed more (33%) vs. taxed less (15%), results show.

When you look at younger generations, the results grow more troubling for the sector.

Half (52%) of teens believe oil and gas decision-makers are mostly interested in what’s best for people their age, while 49% believe the industry is not. In fact, from the Silent Generation (the oldest group in the survey) to Gen Z, there is a steady decline in agreement with the statement “Oil and gas is good for society.” A net 63% of the Silent Generation and 38% of Baby Boomers agree with this statement, while only a net 3% of millennials do. Gen Z was more likely to say oil and gas is bad for society.

Oil and gas primary source infographic

“Public perceptions can impact the industry’s ability to recruit and retain talent, access capital necessary for growth, and pursue new projects,” said Deborah Byers, US Energy Leader, Ernst & Young LLP. “They can also influence the regulatory and tax environment and, perhaps, even demand for oil and gas products. Americans’ views on oil and gas serve as a reminder that companies need to proactively demonstrate value and earn trust.”

The survey findings suggest that, while there are some existing misconceptions on both the part of consumers and executives, there are a number of issues where there is general agreement. This is especially true regarding the importance of protecting the environment and operating safely.

78% of executives say the industry should communicate better or connect with the public more effectively on climate change.

The war for talent

Oil and gas companies need smart, capable employees now and for as long as the industry exists. But younger generations’ perceptions of oil and gas are leading them elsewhere, our talent findings show.

While more than half of adults (51%) would be happy if their child chose a career in oil and gas, only 26% of Generation Z and 45% of millennials without a set career path find industry jobs appealing, survey results show. A majority from the younger generation also perceive oil and gas jobs as blue-collar, dangerous and physically demanding.

Talent

55%

of consumers cite a blue-collar role when asked what oil and gas job first comes to mind. But 87% of executives say such jobs are white collar.

There are a couple of contributing factors to these views including: a disconnect between what oil and gas executives think young people want from a career and what they actually want, a lack of awareness about the industry and the careers that power it, and a substantial gender gap. Only 24% of women between 16 and 35 find industry jobs appealing, while 54% of men in the same age range find them appealing.

Interestingly, younger generations actually hold fairly traditional career priorities. When asked which three considerations are the most important in selecting a future career, both Millennials and Generation Z, as whole, prioritized salary (56%), good work-life balance (49%), job stability (37%) and on-the-job happiness (37%).

In contrast, oil and gas executives expected the leading careers drivers for young people to be salary (72%), technology (43%), good work-life balance (38%), and the opportunity to try new roles (28%). They overestimated the allure of technology for young people while undervaluing work-life balance and stability.

Further, executives do not seem convinced of the industry’s ability to deliver on some of the leading factors that attract young people to a career. While 92% of executives agreed salary is a strength of the industry, 37% said good work-life balance is an industry weakness and 61% said job stability is an industry weakness.

“There are a number of changes companies can make to improve their ability to recruit and retain quality employees, but overcoming this perception challenge will require much more substantial transformation,” said Rachel Everaard, US Oil & Gas People Advisory Services Principal, Ernst & Young LLP. “Companies need to embrace the workforce of the future and evolve to better serve current and prospective employees.”

Technology will play a crucial role in revolutionizing the industry’s workforce, impacting both the number and type of employees needed. For example, companies can implement digital automation to do a range of repetitive tasks that currently require staff time. In turn, they can quickly and inexpensively adjust to a smaller hiring pool by focusing their recruiting efforts on qualified individuals for key roles.

Oil and gas executives are already adapting to this mindset. Eighty-one percent of executives surveyed said the industry will need to develop an educated, highly skilled workforce over the next 10 years.

Amid this rift between what consumers want, how they want it and the public’s understanding of the industry, oil and gas companies face a challenge for the future — one that may influence their interactions with prospective employees, communities, shareholders and even consumers. For forward-thinking companies, the time to counteract these opinions, is now.

Summary

Our survey results on oil and gas serve as a reminder that companies need to proactively demonstrate value and earn trust or risk damaging their interactions with prospective employees, communities, shareholders and even consumers.

About this article

Authors

Deborah Byers

EY Americas Sector Leader, US Oil & Gas Leader

Energy sector veteran. Corporate finance and JV professional. Investment advisor. Mother, wife and amateur astronomer.

Rachel Everaard

EY Southwest People Advisory Services Leader, US Oil & Gas People Advisory Services Principal

Energy leader. Passionate proponent of women in business and leadership. Runner. Wife and mother.