The number of new permanent jobs advertised in the North Sea oil and gas sector has fallen by a third in the past year, according to a leading recruitment agency.
Advance Global Recruitment, which specialises in the energy industry, says it has seen a 30% drop in permanent placements in the past 12 months.
The decrease reflects a change in priorities among the sector’s major employers following a significant drop in the global oil price in the past six months, according to AGR.
Instead oil and gas companies are focusing on shorter term projects, says the firm, which has seen a corresponding 35% growth in revenues generated by temporary contract placements.
The figures reflect a general trend of disinvestment and predicted job cuts in the sector.
Oversupply and a growing oil glut had hit crude prices hard in recent months, with the oil price falling from a peak of US$115/bbl in June to US$45 in January.
Stuart Hunter, director of AGR, said: “The reduction in the oil price has certainly had an effect on the industry as a whole with a lot of projects that were due to start being shelved, delayed or postponed until further notice and, at times, completely cancelled.
“It has caused a lot of uncertainty and, as we’ve seen in the media, people are losing their jobs. Our industry is naturally sensitive to the oil price - when it goes up or down the main players react quickly.
“When it was on a permanent upward curve over the last few years it was fantastic from AGR’s point of view - rates increased for personnel, which meant our fees increased accordingly.
“What goes up must come down however and, in the last few months, we’ve seen a reduction in the fees we’re able to command and fewer permanent placements being made.”
In the first quarter of 2014 (Q1), AGR recorded a 30% reduction in permanent placements, including surveyors, inspectors and drivers of remotely operated vehicles (ROVs).
Hunter said: “That’s to be expected and it makes complete sense. When the market is shrinking, the last thing companies want to do is add higher fixed costs to their bottom line.
“However where there’s been adversity, we’ve also been presented with great opportunities, particularly in the contract market.
“As a result we’ve become contract specialists and the large majority of our business is now focused on supplying freelance contractors and this is an area that has increased due to the downturn. Between Q1 of 2014 and the same period this year, we’ve seen a 35% increase in fees generated by contract placements.”
AGR’s work is principally focused on finding qualified staff to work in the hazardous subsea environment. Because their skills are at a premium, such professionals can command healthy salaries and AGR’s value is in placing the right people in the most appropriate positions.
While 60% of the firm’s business remains in the UK, its work with international clients is growing.
Adapted from a press release by David Bizley