Oil firms 'must pay for skills' North Sea
Scotland on Sunday - Business - Oil firms 'must pay for skills'
IAIN DEY
CITY EDITOR
NORTH Sea oil companies will have to pay over the odds for talented graduates in order to tackle the growing skills crisis, one of the oil industry's biggest employers has warned.
Petrofac chief executive Ayman Asfari, who made a personal fortune of more than £50m last week after floating the oil services group, says current salaries do not compensate for the "hardships" of working offshore - where the average age of the workforce is now over 50.
Although there has been a stream of engineering graduates from Britain's universities in recent years, Asfari said many were being lured into high-paid office jobs in the financial services industry.
He also said that the "prime motivation" for last week's £750m flotation was to allow the firm to create better share incentive schemes that would help retain senior staff - and that the company's growth had been hampered in recent years by the shortage of skilled staff in the industry.
His comments come amid increasing concerns in both the industry and government over the ageing North Sea workforce - a crisis that will worsen in the next five years as more engineers retire.
Asfari said: "This is not a problem that is going to be resolved over night. The fact that we have not been producing enough engineers for the past two decades is not going to be made up in a year. But it will have to take a concerted effort on the part of the industry, as well as the government.
"We need to make the industry an attractive place to employ young engineering graduates. There is absolutely no doubt that, over time, the wages will have to become more attractive.
"In many cases we're competing for the same talent as the financial services industry. Our industry is very unattractive for young people compared with the financial services industry. There is an element of hardship in our business that doesn't exist in other businesses, and people have to be compensated accordingly.
"There is no doubt that when a young graduate with an engineering degree looks at the money potential from financial services and looks at today's rewards in the oil business, the balance is not in favour of our industry.
"For young engineering talent, the choices are to go into the oil industry or go into other service industries where you do not have to fly offshore to go to work; you don't have to be away from your family for two weeks at a time, and you don't have to do all these other things that are part of our business."
Petrofac employs 3,000 in the North Sea, but most of them are employed on behalf of companies such as Total, Marathon, Tullow, Venture Production and Paladin Resources.
Asfari said the salaries and other terms and conditions he played his employees were dictated by the oil companies as part of their agreement.
As part of the efforts to make the industry more attractive, trade unions are pressurising oil companies to give employees three weeks leave for every two weeks offshore - a switch from the traditional two weeks on, two weeks off rota system used in the North Sea.
Although Asfari agreed this would make recruitment easier, he said it would do nothing to solve the skills problem, because less of the existing workforce would be offshore at any given time.
To help address the problem, he is also expanding Petrofac's training business. Although traditionally this business has run health and safety courses for offshore workers, it is now running training courses to boost the skills of the workforce.
Both Petrofac and industry trade body UKOOA are lobbying the government for additional subsidies to be made available for training.
Asfari added: "The skills shortage is a global problem, but in the UK it is worse. You can still attract young engineering talent in the Middle East and the former Soviet Union to the industry, because it is still a prodigious industry and they see it as an industry of growth.
"So in terms of access to younger engineering talent, it is easier overseas than it is in the UK. Having said that, we also need talented leadership, and that leadership is today in short supply.
"Had it not been for this issue, we could have grown the business a lot faster than we have."
IAIN DEY
CITY EDITOR
NORTH Sea oil companies will have to pay over the odds for talented graduates in order to tackle the growing skills crisis, one of the oil industry's biggest employers has warned.
Petrofac chief executive Ayman Asfari, who made a personal fortune of more than £50m last week after floating the oil services group, says current salaries do not compensate for the "hardships" of working offshore - where the average age of the workforce is now over 50.
Although there has been a stream of engineering graduates from Britain's universities in recent years, Asfari said many were being lured into high-paid office jobs in the financial services industry.
He also said that the "prime motivation" for last week's £750m flotation was to allow the firm to create better share incentive schemes that would help retain senior staff - and that the company's growth had been hampered in recent years by the shortage of skilled staff in the industry.
His comments come amid increasing concerns in both the industry and government over the ageing North Sea workforce - a crisis that will worsen in the next five years as more engineers retire.
Asfari said: "This is not a problem that is going to be resolved over night. The fact that we have not been producing enough engineers for the past two decades is not going to be made up in a year. But it will have to take a concerted effort on the part of the industry, as well as the government.
"We need to make the industry an attractive place to employ young engineering graduates. There is absolutely no doubt that, over time, the wages will have to become more attractive.
"In many cases we're competing for the same talent as the financial services industry. Our industry is very unattractive for young people compared with the financial services industry. There is an element of hardship in our business that doesn't exist in other businesses, and people have to be compensated accordingly.
"There is no doubt that when a young graduate with an engineering degree looks at the money potential from financial services and looks at today's rewards in the oil business, the balance is not in favour of our industry.
"For young engineering talent, the choices are to go into the oil industry or go into other service industries where you do not have to fly offshore to go to work; you don't have to be away from your family for two weeks at a time, and you don't have to do all these other things that are part of our business."
Petrofac employs 3,000 in the North Sea, but most of them are employed on behalf of companies such as Total, Marathon, Tullow, Venture Production and Paladin Resources.
Asfari said the salaries and other terms and conditions he played his employees were dictated by the oil companies as part of their agreement.
As part of the efforts to make the industry more attractive, trade unions are pressurising oil companies to give employees three weeks leave for every two weeks offshore - a switch from the traditional two weeks on, two weeks off rota system used in the North Sea.
Although Asfari agreed this would make recruitment easier, he said it would do nothing to solve the skills problem, because less of the existing workforce would be offshore at any given time.
To help address the problem, he is also expanding Petrofac's training business. Although traditionally this business has run health and safety courses for offshore workers, it is now running training courses to boost the skills of the workforce.
Both Petrofac and industry trade body UKOOA are lobbying the government for additional subsidies to be made available for training.
Asfari added: "The skills shortage is a global problem, but in the UK it is worse. You can still attract young engineering talent in the Middle East and the former Soviet Union to the industry, because it is still a prodigious industry and they see it as an industry of growth.
"So in terms of access to younger engineering talent, it is easier overseas than it is in the UK. Having said that, we also need talented leadership, and that leadership is today in short supply.
"Had it not been for this issue, we could have grown the business a lot faster than we have."
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