It wasn’t long ago that the major employment problem facing the U.S. oil and gas industry was simply finding enough people to do all the work.
In exploration and production hotbeds like Williston, North Dakota jobs were so plentiful that the small town struggled to accommodate all the workers. Indeed, so many people flocked there that the average one-bedroom apartment in town rented for considerably more than a similar place in New York or Los Angeles last year.
Obviously, much has changed in a year. Thanks to the precipitous drop in oil prices, unemployment in the American oil and gas industry has risen from 2.5 percent last June to six percent in January, according to data compiled by the Bureau of Labor Statistics.
In January alone, the unemployment rate in the industry spiked by a startling 3.2 percent.
Clearly, the current employment picture is a source of stress and worry for workers in the oil and gas business. And employers need to be exceptionally careful about how they handle job cuts, making sure to offer comprehensive outplacement services to those they have to let go. In fact, how companies handle layoffs now will go a long way towards determining their future success and profitability.
Relationships Still Matter
What do layoffs have to do with future success? In an industry like oil and gas, the short answer is: everything.
That’s because the oil and gas business is so cyclical, driven as it is by the always rising and falling price of a barrel of oil. What goes up does actually come down, and then rises yet again. These fluctuations in the price of oil have always wreaked havoc on job numbers, bringing the industry’s unemployment rate down to as low as 1.5 percent in the summer of 2008 and as high as 16.1 percent in the spring of 2009.
What this rollercoaster ride means for employers is that they need the talented workers who help them seize opportunities in good times to think and speak well of them even after they’re let go.
How Comprehensive Outplacement Keeps Talent Close
How does that happen? It starts with a smart approach to outplacement services. This can include a large suite of services tailored to the employee’s position and experience, including everything from job placement to career counseling to severance pay to one-on-one, personal help from a career coach.
Proactive employers who help laid off workers transition into new jobs will be rewarded both immediately and when economic conditions brighten. Employees treated well will be less likely to pursue legal action or speak negatively of the company in the short term, and more likely to report their positive experience to others in the industry and help cement the sort of solid reputation a company needs when it has to attract top talent in a burst of new hiring. This positive employer branding has a two-fold effect on future hiring: attracting new potential candidates to the talent pool while also creating potential rehire opportunities with key alumni.
Treating your exiting employees well can also generate goodwill among the employees who remain – folks you will need to be as productive as possible – who will examine how you treat their friends and colleagues for hints about how they might be treated if they are let go. Vigorous outplacement services will also aid your bottom line by helping you avoid extended and expensive unemployment insurance payments.
While many organizations will view the current economic downturn and subsequent job loss with a negative attitude, the approach you take to your own reductions in force can create many opportunities for long-term positive gain—for both you and your employees. By treating employees with respect and providing them with the outplacement services they need you will be well-positioned to rebound quickly when the price of oil starts its inevitable climb back upwards.