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Why training doesn’t need to stop during the oil and gas downturn

The ship is still sinking

This time last year I was still marvelling at all the goodies I had collected at the Subsea Expo in Aberdeen. This year, I only took home one freebie, a stress boat. To be fair, it’s a pretty cool stress boat but it’s also a clear indication of how badly the oil and gas industry is still suffering.

Companies use freebies to entice visitors to their stands where sales teams or specialists eagerly await to lure you into conversation about products and services. The cooler the offerings, the more visitors they attract. But the lack of freebies, and lack of stands, isn’t really a surprise.

The price of the barrel fell below $30 in January (1) followed by the news BP is cutting another 7,000 jobs (2) and Shell reported an 87% collapse in annual profits (3). The International Energy Agency (IEA) also reported that any recovery in the oil and gas industry will be short lived, and the recent “rise in prices was a ‘false dawn’” (4).

No budget. No training. No nothing.

Sales people are used to hearing, “sorry, we don’t have the budget”. In different circumstances there are ways to get around this knock back, but with current oil and gas downturn it’s genuine – many companies don’t have any budgets for anything.

However, among them are companies with training budgets sitting ready to be used…

The annual spend you can’t avoid

The Engineering Construction Industry Training Board (ECITB) require companies on their register of leviable establishments to pay a mandatory levy at the start of each year. To see if your company are levy payers please click here.

The amount paid through the levy is relative to the size of a company, but all leviable members are “required by law to complete an annual Statutory Manpower and Payroll Return” (5). The information provided in the Return is then used to calculate the amount of levy to be paid.

The Statutory Manpower and Payroll Return relates to the previous year. This means 2016 levies are based on 2014-2015 statistics, and are not significantly different from previous years. However, 2015-2016 data will be used to calculate 2017 levies and so it is expected levies across the oil and gas supply chain will fall significantly.

The levy can only be claimed back through ECITB accredited training providers such as project management specialists 20|20 Business Insight. And it is important to understand that no matter how bad the recession, companies are legally bound to pay their levy.

The levy could therefore be described as a training budget out with a training budget. A budget that’s paid for and ready to be used.

There’s going to be no one left

This isn’t the first oil downturn, and there is a sense of déjà vu as the industry finds itself again at the mercy of an oil recession (6). However, this time there a chance to learn from past mistakes and plan for the eventual upturn.

Back in 2011 Schlumberger Business Consulting (SBC) conducted a survey exploring future skills shortages in the oil and gas industry. It found that “22,000 senior petrochemical professionals would quit the industry by 2015” and that the recruitment of graduates may offset staff levels but would not fill the experience gap (7). It later then noted that by 2016 the absence of experienced professionals within the oil industry would reach 20 per cent of the talent pool (8).

These finding are four years old, and the downturn wasn’t even considered as a mitigating factor. Since conducted, not only have thousands of jobs been cut – skilled, knowledgeable and talented workforces have been lost.

Key to success = successful projects

The general consensus from Subsea Expo was that any non-essential training was off the table for the foreseeable future. Non-essential training is essentially development. However, as Hydrogen Group argue, “continuous development of staff is critical for any industry to survive and can help create innovations solutions for the future” (9).

For those who pay the levy developmental training should be at the top of your list – because you have a massive advantage which must be exploited.

Project management training ought to be at the heart of training plans, as projects are fundamental to the oil and gas supply chain. The difference between a project running over budget and scale and being completed on time and to budget can lie in having trained project personnel.

Equipping staff with the knowledge, understanding and practical skills to keep projects on track can quite literally save companies millions in overspend.

Logical next step?

This is the time where ECITB levy payers should be looking over, or re-evaluating, training plans for 2016, and cross referencing what’s available through accredited training providers against training needs and personal development plans. And if your training needs include project management, 20|20 will work with you to find best solutions to staff training while utilising your levy to the fullest.

20|20 Business Insight are the UK’s leading providers of bespoke and specialised project management training and consultancy, and we won the ECITB Training Provider of the Year 2015. All of our Association for Project Management (APM) and ECITB courses can be claimed back through the levy and we are the only providers of the City & Guilds Certificate in Project Controls course in the world. For our APM and ECITB course range please click here.

And we all know training project personnel means you get to develop your staff, they gain internationally recognised qualifications, and when the industry begins to recover you have a competitive advantage.