Some people call it the Big Crew Change. Some people call it the Great Crew Change.
But after this interview with Paul Caplan, it was clear neither name did the event justice. Therefore, we give you:
THE GREAT BIG CREW CHANGE
50% of workers in the oil and gas industry are retiring in the next five years. For every three technical professionals retiring today, there is one college graduate to replace them. 75% of the workforce will be Gen Y by 2025.
These numbers are startling, to say the least. Thus far, the industry has done very little to evolve to the point that it can connect with these generations. However, we have put it off long enough.
President of Rigzone, Paul Caplan, stops by today to discuss the positive characteristics Gen Y and Millennials bring to the workforce. He gives practical tips on how to attract, retain, and manage members of this incredibly important demographic.
So, get ready for The Great Big Crew Change because, like it or not, it’s happening!
Episode 16 is dedicated to the 1982 Lincoln Continental, my first car! What was yours?
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By 2025, 75% of the workforce is going to be Gen Y. It’s a reality.
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Within the O&G industry the average time to fill most positions is around 62-65 days. (Click to Tweet)
Tell Gen Y and Millenials how they’re doing, and tell them often.
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- Ashley McNamee, Whiting Petroleum Corporation
- Stephanie Ignacio, @saignacio
- Bryan Tuck, Bryt Web Marketing
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Interview Transcript: Paul Caplan of Rigzone on the Great Big Crew Change
James Hahn II: Joining The Tribe on the podcast this week is Paul Caplan. He is the President of Rigzone. He joined the company in March 2012, and is responsible for leading the strategic direction of the company. Rigzone is a global online community serving the oil and gas industry with the best content, analysis, data, and career opportunities in the industry.
Paul has been working in business to business media since 1984. Before joining the company he was Senior Vice president of Digital Revenues at Cygnus Business Media where he served in a variety of leadership positions since 2004. Early in his career Paul worked in the energy publishing field publish at both the Oil Daily and Hart Energy. He earned his BA in economics from the University of Cincinnati, where we say Go Bengals! I can say that because I am a lowly Lions fan and I just need a team to root for. So thank you very much for joining us on the podcast, Paul.
Paul Caplan: Well thank you, James. I am very very glad to be here. And, yes, Go Bengals.
James Hahn II: Like I said, rough times always to be a Lions fan. Before we even got on, I was talking to you about the Redskins because I am just happy to see a Spartan (Kirk Cousins), or any team I can root for win. The Red Wings hockey season cannot come soon enough.
(We recorded this interview before the Giants crushed the Redskins on Thursday night, 45-12.)
But, we are not here to talk sports. We are here because at the North American Petroleum Expo, also known as a NAPE, at the Business Conference you gave an outstanding presentation I have been waiting to hear in this industry for a really long time. And you were specifically talking about the need for the industry to start to start to connect with Millennials and Gen Y. To speak their language so we can attract the talent we need to fill this gap with 50% of the industry retiring in the next five years.
Give us your thesis on that and we’ll go from there.
Paul Caplan: Okay great, James. I think the most important thing to set the stage is that we’ve talked about the talent gap in the oil and gas industry now for going on 10 years. And there’s good reason for it, especially in the US. Over the last 10 years, since 2004, the US oil and gas industry’s number of positions has doubled. We’ve gone from about 250,000 people in for in the industry to over 520,000 people employed by both the oil extraction companies, as well as the service and supply companies.
This increase in the demand for people in the industry is unprecedented. The interesting thing is that in previous recoveries. Let’s say the 1990’s recovery of the economy, or the early 2000s recovery. The growth in jobs in the industry itself pretty well mirrored the growth in jobs overall in the US economy. Since the 2009 recovery the growth in jobs in the industry has outpaced the overall growth in job creation in the US by a significant amount, and it doesn’t seem to be tailoring off.
So we’re in a situation that I think most people in the industry are aware of where. You’ve got the large group of professionals in the industry who are at retirement age, or are coming close to retirement age. And those you bowl have a lot of the knowledge, have a lot of the experience. And the companies to date haven’t really done a whole heck of a lot to try to keep them around. That’s a big mistake, and we’ll get into why that’s a big mistake in a couple minutes. The Gen X generation, which are people in their 30s going up until about 40 years old. There are a lot of characteristics that in some way mirrors their parent’s boomer generation.
James Hahn II: Like what? I’m curious. Because I’m one of these Gen Xers. What do we do that is like our baby boomer parents?
Paul Caplan: Xers tend to have a lot more of a comfortable feeling with a more structured workplace. They are a lot more comfortable with things like individual projects, as opposed to a team approach. There’s a little more of a respect for hierarchy that exists among Gen Xers.
They are well within the norms in terms of what the oil and gas industry perceives as good employees. Where things get really out of whack is how the oil and gas companies, which are run by boomers for the most part, their perception of what is the good workplace? What is the good employee? What is the way to motivate and encourage employees? It’s very very different then what the Gen Y generation expects.
The issue is there certainly aren’t enough Xers. They’re a smaller to generation compared to the boomers and compared to millennials. There just isn’t enough of them to be able to supply the industry with the necessary talent to continue on the pace that it’s going. So that leaves us with the issue of how do we attract and retain millennials from the generation Y?
It’s a unique challenge because the characteristics of how how they approach what they do, how they perceive success, how they perceive what the workplace should be, how their work is valued, it’s just very different than the generations that have come before them.
James Hahn II: One Point that comes to mind for me as well, as far as Gen X. You’re not really attracting new talent. The people in my generation have found their niche, hopefully. Some of my buddies are still DJing in bars, but we’ll leave that beside. Not everyone goes directly into a white collar career like we would like. I guess my point is with Gen X you’re past the time of being able to get them. They’ve already gone to college. They’ve already went out into the workforce. If anything, you’re not necessarily going to have very much luck trying to poach them from other professions as far, as I can tell. What are your thoughts about that?
Paul Caplan: Well, I think that it is a challenge. They’re pretty well-established in their careers. Those within the oil and gas industry, that’s probably where a lot of the poaching is going on right now, and there certainly is an increase in that.
In the surveys that we’ve done over the last several years at Rigzone talking to hiring managers. What we found from the surveys that we’ve done is that at this point there’s an increase in the number of people who are asking for more money than what they’re willing to give. There is an increase in the number of people who are turning down job offers than in the past. It’s taking longer to fill the positions that are open right now.
Within the oil and gas industry right now the average time to fill most positions is somewhere around 62-65 days. If you contrast that with the other US industries, and Dice who is our parent company has a lot of research a long those lines. The average time to fill across the board is around 40 days.
So, the oil and gas industry is about 50% above the norm, in terms of time to fill. Poaching is a major strategy that companies pursue right now. In surveys that we’ve done of the people that use Rigzone, fully 70%, seven our of ten have told us they have gotten a call from a recruiter at least in the last six-month period. It’s rampant.
But, yes, the generation X’s have found their professions. The hope for the industry, to a large extent, lands on the Gen Y’s. And being able to not only to attract them, but to retain them. And that’s where the chance is going to be.
James Hahn II: You touched on it briefly earlier when you were talking about Gen X, as far as comfortable with hierarchy, a lot more like the boomers and so forth. What makes this Gen Y and subsequent millennials so different?
Paul Caplan: There’s a saying that I’ve read in a lot of the different readings that I’ve done this. That is that Gen X lives to work and Gen Y works to live. The way that they have been taught and raised by their parents for the most part is different than how Gen Xers were raised.
The Gen Y’s were raised to know that their opinion matters. They were often consulted in decisions that were made by the family. Gen Y’s parents were very comfortable in talking about a wide range of things, from finances to personal issues in the family right in front of them. And so they’re used to that open discourse.
In their education. A lot of their education was based around working together in teams. And either bending rules that have have been established years before about things like grammar and things like spelling. Or changing the rules in terms of in terms of what was important.
So there’s a lot of things that went into how they were brought up, both in terms of their home life and in terms of their formal education that were different than the generations that came before them. And a lot of that is what has contributed to their perception of where they fit into, not only the workplace, but the world.
James Hahn II: I can vouch for the fact that just like boomers look down on subsequent generations and say, “They’re soft.” My Gen X friends, judging from Facebook and places like that. We really look down and say these kids are soft. Everybody got a trophy. Everything was all lovely for them. They didn’t really learn how to suck it up and do it on their own.
Having said that, what are the positive things. Because if we look at the statistics, and we know how many people are retiring. If we continue to look down on these characteristics and say, “This is a bad employee because Y”, I guess in this case. If we do that then we are going to be left with a perpetual shortage. So how can we look at these things in a positive lights, as opposed to saying these kids are just soft.
Paul Caplan: The first thing that you have to begin to value is the fact that they are very goal oriented. They believe in achieving the goal. They believe in doing it their own way, or as part of the team and the team way of doing it. So they’re not going to do it in a prescribed manner that is officially approved by the manager who’s supervising them. They need to find their own way of being able to solve it, but they will solve it. And they will do it as rapidly as possible.
So you have to be able to really value that. I think you have to value the fact that they believe in mentorship. They are looking to managers and looking to executives within the company to give them guidance. Now that’s a double edge sword because they also believe that their input is as valuable as anybody else’s input. And that they can have a say in how things should be run.
Companies have got to get comfortable with the fact that they want to be able to give there input at the drop of a hat. And they don’t have any compunction about walking into the CEOs office and telling the CEO where they think that things have gone awry, or where things can be improved. Companies have to get comfortable with that level of communication that most of these companies that we are talking about aren’t comfortable with that.
But, having said that, they are not afraid to voice their opinions. And their opinions matter because they are the ones out there doing things. And they are the one out there that are getting things done. So they have perception of what’s going on in the market that maybe a lot of companies have lost track of because they’ve relied on formal mechanisms for communicating that up the chain.
I think some other things that should be valued about this generation in terms of what motivates them is that they aren’t all about the money. Currently in the marketplace, one of the reasons why there has been a slowdown in exploration in the industry is because the costs have gotten just incredibly ridiculous.
The average hourly wage in the oil and gas industry since 2006 has gone up by 27%. A lot of it is because of the scarcity of talent. But realizing that millennials are not motivated simply by money and understanding the motivational point that they have should allow companies to be able to craft the types of career paths for people that actually may be less expensive than what they had originally had been budgeting for.
Consequently, I think that there are a lot of attributes that companies need to understand. And I think they need to figure out how to make that work within their company, and how to use these as ways of attracting people, retaining them, and promoting them.
James Hahn II: When you say that the first thing that comes to mind is there’s not a better on earth for a good “Why?”. By that I mean, I’m always paraphrasing Simon Sinek who says people don’t buy what you do they buy why you do it. And that might be a way to summarize how this generation sees the world. They want to do something that changes the world. And the beautiful thing about this industry is that you can literally change the world.
I remember one word that you said that really stood out in my mind, and it still does as we’re talking about this, and it’s empowerment. Can you talk to us from that angle? Because it sounds like to summarize what were talking about here. It sounds like you could summarize it by saying these guys need to be empowered and they need feedback.
Paul Caplan: Feedback’s really important. And we’ll get to that second. In terms of empowerment, they already feel like they’re empowered. It’s not something they feel they need to have granted to them. They feel that they’re smart. That they will work hard. And it’s something that they expect that they be given responsibility quickly. They expect that they’ll be able to have their voices heard.
That’s a little bit of a challenge for this industry because this industry doesn’t believe in giving people responsibility quickly. And there’s good reason for that. In a lot of the positions that were talking about, we’re talking about life critical situations out on a rig, or on a project. And we’re talking about billions of dollars of investments. So companies are going to be a little bit hesitant to rapidly promote people into positions that they’re not quite ready for. That’s a conflict that they’re going to have to work through. But in terms of giving them the voice and the opportunity to express themselves, you’re going to have to do that. Because they feel like it’s something that they already have. That’s important.
In terms of the other issue about feedback, we live in a culture where in most companies you get an annual review. In some companies maybe you get a semiannual review. In our company, for instance, we do reviews twice a year. The millennials live in a generation where they want instant feedback. They want to know how they’re doing, and they don’t care. You don’t have to candy coat it for them. They definitely want the truth, and they’re willing to a sort of a negative criticism as it’s constructive. That doesn’t bother them. You don’t have to sugarcoat anything for them.
But, they do expect to have constant feedback about their performance. The companies just aren’t geared for that right now. So, managers are going to have to come up with ways that they can more regularly communicate back to the people that they’re working with about how they’re doing. And what they could be doing better. And how their ideas are fitting into the overall scheme of things.
Without that feedback you’re going to have disillusioned employees relatively quickly. I tell the story about a good friend of ours, their oldest daughter. Who graduated a year and a half ago from University of Texas. She has a degree in well engineering. She got a job right out of college working for a major company. A major international oil company paying in the high $80K’s. And all of the benefits that in my generation it took a while before you got to that point.
Literally, within less than a year she was already casting about looking for another job because she just didn’t feel like people were telling her how she was doing. She didn’t know how her work fit into the grand strategy of things. She didn’t know what the value of her work was in terms of what it meant for the world. All of these things were very important to her, even though she was being paid and compensated at levels that my generation would have absolutely clawed to get to.
JH II: One worry that I have, knowing this industry and knowing the way that we think. We might just systematically go and say, okay, not twice a month, but we’ll do quarterly reviews or bimonthly reviews. But we’re not just talking about more paperwork and more meetings. We are talking about a cultural shift within the industry, are we not?
Paul Caplan: Yes we are. I think the smart companies will recognize it for what it is, and not try to put a structured process around it. If there’s one piece of advice that anyone should take about hiring and maintaining and retaining millennials is that you cannot operate under a one-size-fit-all. To some extent, this industry has the potential to do that. Because this is an engineering industry’s I’ll industry that’s a technical industry. It’s an industry that is all about problem-solving. And this is a problem. This is a problem that can be solved. There are way’s to do it. They just have to loosen the ties a little bit and take a real hard look at it. Certainly, there are a lot of people who are working with the industry to help them do that. But they just have to open their years a little bit.
James Hahn II: I was summarizing earlier with empowerment, and given everything that you’ve said now it sounds like we need to just hire them and get out of the way, but also tell them how they’re doing.
Paul Caplan: Yes. Yes. Tell them how they’re doing, and tell them often.
James Hahn II: Tell them often, pat them on the back, give them a trophy. Sorry, I can’t help but throw those in there. What does that look like practically? Because we have been sort of in the abstract saying these are the things that need to be done. And I did just talk about this cultural change and what needs to happen. But, practically speaking, so that we can head off the bimonthly reviews. What does that actually look like in the workplace? Do you have any examples that you can draw from?
Paul Caplan: I think there are some ideas that can be kicked around in terms of how do you respond to it and how do you create a work environment that’s more attuned to the needs of this generation. One of the things I think that’s really important too to understand, and then we can get to see some specifics.
One of the characteristics of Gen Y is they have a very very personal attachment to the companies they work for. They feel very devoted and loyal to the company and to the brand. Now, that’s a dual-edged sword because it allows a company to really bolster the loyalty and the motivation of their workforce. At the same time, if something happens to that company. And this is an industry that certainly has gone through that on more than a few occasions. If there’s something that happens to tarnish the reputation of the company, they take it very personal. And that’s a huge motivation for them to start looking elsewhere if they can no longer believe in the company. So that’s another thing I think that companies have to recognize about this group.
But it terms of practical things. First of all, look at the work environment. I think it’s a pretty well known thing that Gen Y doesn’t necessarily think that a 9 to 5 schedule is the optimal way for them to work. Companies have got to get comfortable with the idea that this is a group of people who if they want to work for 48 hours straight and then take the next 24 hours off, that’s how they want to do it. So companies need to come up with a much more flexible work schedule.
Also, in terms of where they work. This generation wants to, If they want to work from home and not come into the office on a record their basis that’s something that they’re going to value in terms of where they’re looking for opportunities.
The other thing is that you’re going to have to the work environment, and this is something I think that the industry does a fair amount of, and that is you want to make opportunities for social interaction among the group of people on a regular basis. I’ve observed a lot of that in this industry. This is a very social industry. But they do value that.
They want to have fun at work. They view the fact that the real world of being married and having children is going to happen at some point down the road, but for right now they want to have a good time. And it’s like I said, they work to live so that’s important to them.
I think that companies need to do a constant reinforcement about the way the company contributes to society. There has to be a lot of messaging on regular basis. I can think of some companies that do a fairly good job of that now, but I think most of it is focused externally, as they’re trying to win over public opinion. I think they probably need to start turning some of that communication more inwardly, reinforcing that message. I think that that’s important.
One of the things that is a real characteristic of millennials and Gen Y in particular is they want to have different experiences. They don’t want to be straitjacketed into a particular position for a long length of time in a certain place. They want the opportunity to learn new things and try different things. It’s a very internationally focus generation from the standpoint of they see a smaller world. So they want the opportunity to travel. They want the opportunity to experience other cultures. And that’s where this industry can really Excel.
I can think of no other industry that’s out there that in your career within that industry you could live in all five continents of the world. And be able to sample everything that the world has to offer as part of how these companies operate. You combine that with the message about the challenge of energy, and especially on the engineering side. The fact that in a very short period of time you could be working on a project where you’re finding you energy sources drilling down in 10,000 feet of water off of the coast of the South China Sea. There’s not a whole lot of industries that can actually do that.
James Hahn II: I can’t think of another one
Paul Caplan: No. I think that’s a really great opportunity for these companies to be able to publicize and use as a method of bringing people into the industry and keeping them.
In terms of things like motivation, my generation and probably your generation, paid time off is one of those things as a benefit that we look at it and say, “Well, when am I going to take the time off anyway? I’ve already got 40 hours already stored that I can’t use.” For Gen Y’s paid time off is a great motivation because they’re going to take that time. They’ll figure out how to work around it. They’ll work, like I said, 72 hours in a row in order to get a project done. But then they’re going to take that time off. So they’re going to value that paid time off.
Those are just some of the practical things that companies can do as they evolve in the workplace to make room. By 2025, 75% of the workforce is going to be Gen Y. It’s a reality. Companies, the workplace is going to have to change. And I believe that the oil and gas industry actually as challenging as it sounds because of what you and I know about how this industry is put together. It has a lot of great attributes that should make it a wonderful environment for this generation to work in.
James Hahn II: So, just in the same way that we as an industry are used to doing, you used the word external. Doing a lot of external marketing, whether that’s on television, in oil shale magazines, and all of these different places. We need to learn how to do internal marketing and communicate our “Why”, the reason we are doing this and how we are changing the world internally. We need to learn how to put that messaging together.
Also, build a culture within a company. I used to work for a company that was very good at that, which was Quicken Loans. Over and above the bedrock culture of the company, which I’ll link in the show notes. They call him there ISMS. And they still, oddly enough, drive a lot of activities that I do today because they were so thoroughly taught to me.
But the actual workplace itself at Quicken Loans is colorful. You can have a standup desk, sit down desk. There are some with cubicles. There are some work together areas. All of these different kinds of places to work. Where we are used to the standard of a bunch of cubicles in a gray room, I think even the physical nature of the office has to be conducive to this attitude that they bring to the workplace.
Paul Caplan: Absolutely. And again, they feel that going into an office is something that is a nice to do, it’s not a must do. If that’s the case, you need to have an office that’s conducive to being a good experience for them. Again, so much about what they do is based on team and collaboration that you have to have that kind of environment to have been functioning at a high-level
James Hahn II: Well, Paul we are at our time. I could talk to you about this for at least another few hours, but I thank you very much for taking so much of your time out of your busy schedule to speak to us today on the podcast. If people want to know more about you, to connect with you, or know more about Rigzone where would you send them?
Paul Caplan: Rigzone is at Rigzone.com. I don’t think we use the “www” anymore, I think that shows how old I am. We used to call it the information super highway.
You can reach me at [email protected], I’d be happy to speak with you. If you haven’t visited Rigzone, come by. We have news and data. We keep a pulse on what’s going on in the industry. And, of course, lots about the opportunities for careers in the industry, so please stop by if you haven’t.
James Hahn II: Alright, Paul. Thank you again so much, and I hope that your vision and mission connects far and wide across this industry. Thank you very much.
Paul Caplan: Thanks for the time, James. I really appreciate the conversation.