Using the Right Honey to Attract Sweet Local Talent

Forget millions-the billion-dollar question in the oil and gas industry over the next decade is: How to find the right local talent? With the Big Crew Change due to alter the structure of the industry, oil and gas companies must source qualified new talent who can create and implement new approaches needed to increase oil production in an increasingly complex and competitive industry. Ideally, this new talent will be local. Yet countries from across the MENA region-from the GCC to Egypt and even as far as Nigeria-are finding it increasingly difficult to recruit the top local talent. Rather than focusing on longer-term solutions, many companies are hiking salaries to unsustainable levels and poaching employees from competitors. Yet some voices in the industry are advocating for smarter, more cooperative approaches to attract, recruit, and retain local talent. The challenges are well known, and now the strategic solutions must be embraced.

How Does Egypt Fit into This Picture?
The Egyptian General Petroleum Corporation (EGPC) manages much of the upstream oil activities such as infrastructure, licensing, and production, as well as owning and operating most of the refining capacity in the country. Nevertheless, international oil companies (IOCs) do play a significant role in Egypt’s upstream sector. The main IOCs in Egypt are BP, Eni, BG, and Apache. The first three companies are primarily involved in offshore whereas Apache is involved onshore in the Western Desert. It is important to note that there are also several SMEs involved in oil exploration and production.

In the natural gas sector, the Egyptian Natural Gas Holding Company (EGAS) controls the development, production, and marketing of natural gas. The key companies in Egypt’s upstream natural gas sector are the same as those in the oil sector, with the addition of Shell. BG is responsible for approximately 40% of Egypt’s natural gas production, and BP hopes to increase output through discoveries in the Mediterranean Sea and Gulf of Suez.

EGPC, EGAS, and the IOCs operating in Egypt must focus on attracting the right talent over the next decade, and there are many reasons why local talent is preferable to expatriates. First and foremost, nationals usually possess a better understanding of their region than their expatriate counterparts. As a result, local talent often comes with the connections and wherewithal to get things done quickly and efficiently. This is especially true for private companies that must deal with slow, complicated government bureaucracies. Second, recruiting local talent is more sustainable and usually more cost effective in places like Egypt-although this is not always the case as best evidenced by industry examples in GCC countries. Finally, recruiting nationals is an excellent way for IOCs to demonstrate their interest in helping MENA countries achieve their country strategies by creating employment and private sector growth.

Big Crew Change as HR Opportunity
Recruiting top local talent is especially important given the impending challenges posed by the Big Crew Change, which has the potential to stall oil and gas exploration and production growth in Egypt. The Big Crew change is the term given to the shift in the demographic profile of employees in the oil and gas sector due to the exodus of a significant number of seasoned and skilled petrochemical professionals and the resultant reliance on younger and relatively inexperienced engineers. Experienced technical staff members, numbering 20,000, are predicted to retire and leave the sector over the next 10 years. Significant recruitment cutbacks in the 1980s resulted in a missing generation of geoscientists and petroleum engineers. Now, oil and gas majors and service companies are striving to fill this gap by hiring young talent, an issue often exacerbated by a limited supply of experienced local staff as well as nationalization considerations.

The good news is that many oil and gas majors and service companies are now thinking differently about how they hire, develop, and retain local talent. They’re paying closer attention to their employer brand, the employee “contract” in its broadest sense and how they create the infrastructure to manage a demographic increasingly skewed towards younger workforce. A central challenge is recruiting enough of the right talent for future succession, but then once in, how to manage this massive influx of young and relatively inexperienced talent so they are ready to take on a senior engineering role in five to 10 years?

Across the MENA region, career interest in the oil and gas industry is often low, and many companies are competing for the few qualified candidates who would consider working in the needed roles. In the UAE, for example, our research demonstrated that only 4% of Emirati students were “very interested” in the oil and gas industry.

To look at it from another angle, our research revealed that if you take 100 Emirati students, only 14 would graduate with relevant degrees in engineering. Of those 14 engineering students, 10 will want to work for the government, and only four will want to work for the private sector. From those four, only one would consider working outside of an office. Therefore, all of the private sector companies in the UAE are currently competing to recruit one eligible Emirati candidate out of a pool of 100 students. It is a hard job to say the least.

Perception Problems and Potential Solutions
Scarcity of talent pool issues can be resolved by the following three approaches: increase the pool, increase your section of the pool, and fish in a different pool. First, the oil and gas industry can cooperate to increase the overall talent pool by changing the perception of the oil and gas industry. Moreover, this cooperation must be between various IOCs as well as between the private and public sectors. This is entirely feasible in Egypt as EGPC already holds shares in operations through joint ventures with private companies.

How can the perception of the industry be changed for the better? Our studies show that students, especially in GCC countries, tend to think of the oil and gas industry as “dirty” and “gross”. While the perception is generally negative, the negative opinions about the industry are not based on an active, informed dislike but rather an absence of knowledge. This research demonstrates that IOCs can do more to transform negative, uninformed opinions into positive, informed perceptions about the various careers in the industry.

At the same time, IOCs should cooperate with the public sector to create a larger presence in academic institutions. Companies should establish math and science tutoring centers that help develop and hone the hard science skills needed for engineering roles. Companies should also offer more internships and graduate schemes to increase the pool of eligible candidates by the time they enter the job market. In countries like Egypt where foreign companies in the gas sector must dedicate a great deal of their production to the domestic market anyways, these companies should be looking at more ways to contribute to their respective countries. On the one hand, investing in human resources will create a more sustainable local talent pool. On the other hand, demonstrating a clear in-country value will be advantageous while seeking joint ventures with the government.

Second, companies can increase their share of the pool by attracting the right local talent. In order to accomplish this, companies must understand the motivations of young, potential candidates. Based on our research, companies in the oil and gas industry tend to do a poor job of identifying the professional motivations of youth in MENA countries. In the UAE, most employers believed that Emirati youth were motivated primarily by money. When we asked Emirati youth what motivates them, the top two responses were to “help the country” and to “contribute to society”.

Of course, youth motivations vary from country to country, and motivating factors in the UAE are likely different from those in countries like Egypt. For this reason, it is all the more important that oil and gas majors and service companies clearly understand what motivates young, potential employees in their respective countries. One uniform approach will not be successful across the MENA region. Rather, the companies armed with country specific information and a differentiated approach will be in a better position to not only attract the top local talent but also know how to bring them on board.

Third, companies can fish in a different pool by marketing to specific prospective talent. One way to accomplish this involves finding ways to employ under-utilized labor pools, such as female talent. The process is quite simple for employers: pick a niche, identify its specific needs, work out how to meet those needs and build an employer brand. Etihad Airways did precisely that with a call centre in al-Ain, UAE, staffed completely by non-graduate females. By allowing women to work near their home, with flexible hours and in an all-female environment, Etihad Airways not only enjoyed tremendous success finding Emirati nationals to staff the call centre, but they landed top awards at the Middle East Insights Awards. It is easy to see how this approach could be replicated in certain areas of the oil and gas industry, such as logistics and communications.

Attracting local talent in the oil and gas industry, especially considering the impending Big Crew Change, is certainly a challenge but by no means an insurmountable task. In a general sense, IOCs must cooperate more with the public sector to increase the overall talent pool. On a more specific level, individual companies must do more to better align their industry perception and individual brands with the motivations of potential employees. Yet in order to accomplish this in a country like Egypt, both private and public sector companies must be armed with nuanced information about what really motivates younger segments of the population. This research has yet to be conducted in Egypt, but we have seen similar research enjoy tremendous success in other parts of the MENA region.

By Robert Mogielnicki and William Scott-Jackson of Oxford Strategic Consulting, a British/ GCC consultancy with an enviable track record in helping to build human capital across the GCC and in Europe.
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