Do you have a strategic workforce development plan in place? If you don’t, you may be setting yourself up for serious challenges as the skilled labor gap grows and human resources go unreplaced — or are poorly replaced — as a result.
According to the EIA, U.S. refining capacity reached more than 18.8 million barrels earlier this year — the highest capacity on record. That’s an increase of more than 200,000 barrels a day compared to 2018.
Implement actions to meet projected headcounts and develop contingency plans to meet maximum hiring requirements.
Of course, growth means more jobs to fill, in addition to maintaining current positions. The Bureau of Labor Statistics reports expected employment growth of approximately 15 percent in the petrochemical sector over the next decade — a significant number, given that U.S. refineries support close to 2.5 million jobs today. A candidate pool that can’t keep up with the need for skilled craft labor stands to be among the top threats industry-wide.
Craft labor jobs are a unique segment that require specialized training and education but do not require a four-year degree. Top craft workers possess years of institutional knowledge that can be difficult to transfer, let alone replace. Such workers are often those who move through the ranks to obtain expertise. These are the go-to individuals who keep operations going, come hell or high water. We need more of these workers, and we need them faster. Longterm development is no longer sufficient to meet the growing skilled labor need.
According to the Interstate Oil and Gas Compact Commission, the average age of industry employees is between 46 and 49, and the average retirement age for petrochemical workers is just 55. This is a significant concern for high-priority occupations in particular.
A risk report on high-priority petrochemical occupations published by nonprofit research organization RAND Corp. revealed nearly a quarter of employers reported employing high-priority occupations that require a training program longer than 12 months. About half of employers surveyed reported employing high-priority occupations requiring between one and 12 months of training. An inability to backfill these positions can have devastating effects throughout a facility. Specifically, RAND found these effects include significant increases in key equipment failures, unscheduled maintenance and employee error rates.
A proactive approach is key for organizations that want to get ahead of the problem. Examining your current workforce to assess hiring and training needs is a crucial first step in developing a strategic plan for long-term and short-term resource management. Look at the timeframe and costs associated with recruiting, training and fully developing workers. Implement actions to meet projected headcounts and develop contingency plans to meet maximum hiring requirements. Pay particular attention to those craft labor skills that are typically among the hardest to hire. Many companies are also tapping into emerging programs to meet skilled-labor needs. Community colleges in high-impact regions like the Gulf Coast are capitalizing on the labor gap by offering professional certification courses taught by experienced industry employees to help fast-track the next wave of skilled petrochemical labor.
The existing job development pipeline can’t sustainably produce enough competent resources to make up for workforce attrition, which can cost operations dearly. Strategic planning is essential to mitigate the impact. Adopting high-priority workforce development and planning programs is critical to making necessary leaps in the speed and quality of hiring, skill development and knowledge transfer.