Recently, a customer of mine who resides on the Gulf Coast (but is not an oil & gas or petrochemical company) approached me with a very interesting problem. He had lost all of his process engineers to other companies over the past three months, taking all of his process and control system knowledge with them. The company pay and benefits had been attractive enough to retain employees for years, but there has been quite a sudden sea change and he was at a loss on how to deal with it. He told me of his plans to hire or contract three engineers to replace what he had lost. Once we discussed it, I left him with a question that shook him to the core: “How will you keep the new engineers, once they become functional, from leaving you for greener pastures?”
We are just now beginning to see the resource impact of one of the most under-reported stories in the history of the United States. In November of 2012, several major news outlets reported that the U.S. would become the largest producer of oil in the world by the year 2020. This has been accompanied by the massive reserves of natural gas that are being tapped throughout the country, making the U.S. the low cost producer of oil and gas derivative products for years to come. This is resulting in a staggering amount of investment by most of the major petrochemical and oil & gas companies (PCOGs) in new capital projects; either in new production facilities or with retrofits of existing facilities. The latest capital project investment in the Middle East region is listed at $2 trillion (yes, with a “T”). The latest figures for investment here at home is projected (probably underestimated) at over $200 billion. That investment is expected to grow as more of the reserves get tapped and are added to distribution and manufacturing chains over the next 20 years.
The elephant in the room is that the companies associated with this industry are going to continue to seek out and hire as many experienced control resources as possible. Demand has been ratcheted up to a level that we have not seen in decades. This coincides with the impending decline in experienced controls engineering and technician resources, where we are estimated to lose 40 percent of the workforce to retirement over the next five years. Our engineering schools are not replacing these people fast enough. This is a classic supply/demand curve issue, driving the compensation scale up to an area that non-PCOGs will not be able to afford.
PCOGs see other companies as the breeding ground for acquiring talent. For the most part, this phenomena has been located primarily on the Gulf Coast, but as resources become more scarce, it is spreading. Another customer just contacted me worried about finding resources in the Northern Georgia region of the country. All of their old standbys had disappeared and were otherwise occupied.
Non-PCOGs are going to need to start thinking differently about how they will be able to support their operations from a controls viewpoint. A combination of tried-and-true practices and new and perhaps radical ideas about how to perform controls support may need to be considered, including:
- (T&T) Investing time and money into fully documenting existing processes. If your engineers leave, does your intellectual property as well? Has the knowledge that your operators have in their heads been captured in the control system or does it operate semi-automatically?
- (Radical) Companies facing decisions on control system replacement should strongly weight the availability of programming resources that a particular platform may offer. Riding a controls platform that has minimal support on a broad scale offers little possibility of finding support down the road if your resources disappear. The functionality of what many would consider PLC-based control has moved very close to the DCS capability and vice versa.
- (Radical) Choosing control equipment and implementation strategies based on external remote supportability. There are ways to accomplish this that will meet with recommended security guidelines that will not put a company at risk from external threats. This strategy is a flow down from the IT world, but cannot be handled in the same way as it has been with IT.
- (Radical) Placing freshly graduated engineering and technician resources into positions that offer them rapid knowledge gain. The reality of the modern engineering graduate is that the majority of them do not want to work in the same environment for the next 30 years. Times have changed. Co-sourcing, career variability and intellectual challenge will be the key to retaining these employees.
- (T&T) In the short term, companies may need to look at their total compensation for controls engineering and technician resources. What was acceptable yesterday is being pushed aside very quickly by market demands.
If you work in a non-PCOG company, this is an issue that you need to pay attention to before it reaches your door. I am sure that there are many other potential answers out there, and I would really enjoy hearing your feedback about this issue.
Paul has more than 20 years of experience in automation engineering and business development. Before MAVERICK, Paul spent five years as a business development manager for Tegron, and five years as an engineering manager at NASA Glenn Research Center. He earned his bachelor‘s degree in electrical engineering at the University of Dayton and received his MBA from Cleveland State University. Contact Paul at firstname.lastname@example.org.