Most laid-off energy workers remain out of work, UH study says
Nearly 90 percent of oil and gas workers who lost jobs during the oil bust either remain unemployed or have left the sector for other industries, dramatically altering the size and shape of the global energy workforce, according to a study by University of Houston researchers.
The findings could be bad news for the companies that laid off employees by the tens of thousands in recent years. Roughly one in four laid-off energy workers have found jobs in other industries, and many more might follow and leave the industry for good, the survey of 720 respondents around the world concludes.
That means that oil and gas companies may face labor shortages as oil prices rise, slowing the pace of drilling as well as the recovery in the industry and regional economies such as Houston’s. More than 60 percent laid off in the past two years are still unemployed, and 55 percent said they’re considering giving up on oil and gas work entirely.
“A good number of people are lost to other industries,” said Christiane Spitzmuller, principal investigator with the Center for Applied Psychological Research at the University of Houston. “Oil and gas impacts just about everything here in all parts of our economy.”
215,000 jobs lost in U.S.
The oil bust began more than two years ago. After crude prices peaked near $107 a barrel in June 2014, they started to slide, plunging to a low of about $26 a barrel in February 2016.
More than 215,000 U.S. energy workers lost jobs – including about 100,000 in Texas – and many of those workers may never return to the industry. Only 13 percent of participants in the University of Houston’s study said they have found work again in oil and gas.
Two full-time positions
Joe Montague, 38, of Cypress, started his own company after losing two business development jobs with energy companies last year. He was laid off in February and, after landing a spot with a startup a few weeks later, he was out of the job again in August.
“I truly believe oil and gas is not going to be the same for a long time,” Montague said.
Montague decided to take matters into his own hands. A former University of Texas swimmer who left the sport after participating in the 2004 Olympic trials, he started a swim coaching service in October. A month later, he began working as a mortgage loan officer.
“I’m really working two full-time jobs that are straight commission,” he said. “I’m going to work equally hard at both of them and see where they go.”
The survey is part of an ongoing study by University of Houston researchers into the impact of the oil bust. Spitzmuller conducted the project with Caitlin Porter, assistant professor of psychology, and others.
The permanence of people leaving the industry translates into high recruitment and training costs for companies as they may be forced to hire workers with no energy experience, according to the researchers. Even before the recent downturn, the energy sector was still grappling with a generational skills gap that resulted from people avoiding the industry after the 1980s crash, as well as a recent wave of retirements.
“The cost in laying people off may be bigger than the benefit,” Porter said.
Effects on older workers
The workers over 50 years old who lost their jobs seemed the worst off, with fewer new job opportunities, according to the study. The median age of those surveyed was 53. Nearly 90 percent were male, and 87 percent were white. Almost 75 percent had college degrees.
About two-thirds of the study participants complained about the way their companies’ layoffs were handled. Many of them said that after years of working for a company, they were informed of their layoff with a curt phone call and almost immediately escorted out of the building by security.
The research results recommend better internal communication about how layoff decisions are made and how laid-off employees are treated.