Sourcing workers is downstream industry's most pressing challenge—execs

The U.S. energy and petrochemical industry has experienced incredible growth over the last decade. The extended period of profitability has caused another surge in downstream investment, but leaders from across the major energy companies have identified one of the most pressing issues as finding qualified and skilled workers vital to the success of future capital projects.

The skills gap has reached critical proportions among resourcing the craft labor jobs—technical jobs that require more education and training than a high school diploma, but less than a four-year college degree. Many of these jobs are in construction and manufacturing.

U.S. construction labor demand is expected to outpace labor supply over the next five years, with the total number of unfilled construction jobs growing from 200,000 in 2017 to 856,000 in 2021, according to the U.S. Bureau of Labor Statistics.

According to Forbes magazine, more than 350,000 manufacturing jobs are available now.

Petrochemical Update brought together a group of project management, business development, operations, maintenance, reliability, technology, procurement, and strategy experts from refining, petrochemical and liquified natural gas (LNG) sectors to discuss and debate the role of resourcing, recruitment and developing the next generation of workers in the industry.

BASF, SABIC, Fluor, Chevron, Ineos, DowDupont, Wood, Jacobs, Audobon, Kiewit, Bechtel, Sandpiper Chemicals, Covestro, Shell New Energies, and LyondellBasell, were among the executives brainstorming at the roundtable hosted by the Downstream 2019 Exhibition & Conference These executives make up the Downstream 2019 conference advisory board. 

“This group of major business leaders from across the spectrum of capital projects, reliability, maintenance, and process engineering have the unique opportunity to reflect on the challenges, share valuable insight and strategies, best practices and lessons learned together while meeting and planning the 2019 event,” said Jonny Witherspoon, Downstream Project Director.

With more than 80% of project and maintenance executives citing resourcing as their most immediate challenge, the Downstream 2019 team has decided to make workforce development the cornerstone of the 2019 program, and a central theme of the work of the full conference advisory board.

Top Downstream Industry Concerns –Engineering and Construction

Top Downstream Industry Concerns –Reliability, Maintenance and Turnaround Teams

Treating the problem

Glenn Johnson, Director of Workforce Development for BASF, says that if the industry wants to treat the issue, it must treat the symptom and communities must change thinking about these jobs.

“In this country we have allowed a narrative to develop that the “best” jobs are no longer in manufacturing, but in white-collar, office settings – although these jobs are also essential to manufacturing,” Johnson said.

“Simply put, the way everyone from actual parents and teachers to fictional characters portrayed in movies and television talk about certain careers has led to a lack of interest in these careers. Furthermore, we compound the problem by leaving information out during counseling,” Johnson added.

Industry Gaps

The U.S. workforce problem is a mix of demographic trends and awareness issues as an aging workforce retires every day. The first baby boomers turned 70 in 2016. 

Millennial workers are now replacing the Baby Boomers, who are retiring at the rate of 10,000 a day, according to the Pew Research Center. However, the millennial generation is less interested in jobs in the downstream industry in favor of what they consider more tech-savvy jobs.

“We are dealing with a people gap. Businesses can’t find the workers they need, when and where they need them,” said Peter Beard, Senior Vice President Regional Workforce Development for the Greater Houston Partnership.

“We are dealing with a skills gap. People lack the skills and credentials they need to compete for 21st century jobs,” Beard added.

Combined with record investments in the U.S. over the next decade, manufacturing will have 3.5 million job vacancies and the skills gap is expected to result in two million of those jobs being unfilled, according to Deloitte.

Additionally, every job in manufacturing creates another 2.5 jobs in local goods and services, according to the U.S. Department of Commerce. That is seven million jobs projected to go unfiled if the jobs gap is ignored.

Skills Gap

The industry is concerned about the quantity, but also the overall quality in the talent pipeline as well, Beard said.

UpSkills Houston, through Greater Houston Partnership, is one group that has put together a team to solve the skills problems before they become too big to handle projects.

A team, which consists of energy executives, educational institutions and community associations, has begun mapping competencies for priority industrial crafts to ensure career progression, stickability and transportability.

Competency maps for key craft jobs identify the related National Center for Construction Education and Research (NCCER) credentials for career progression.

“It is essential to develop an approach for performance verification—the ability to validate that a person can perform the task or tasks related to the credentials,” Beard said. “Performance verification is expected to improve overall quality.”

Competency Map by Skillset

(click to enlarge)

Image:, a coalition of the ECHMA, UpSkills Houston and JPMorgan Chase & Co.

Industry Initiatives

UpSkill Houston

UpSkill Houston consists of an active employer-led petrochemical sector council of ExxonMobil, Shell, LyondellBasell, Dow, BASF, and ChevronPhillips working in collaboration with the East Harris County Manufacturers Association (EHCMA) and Associated Builders and Contractors. 

Also participating: community-based organizations, the Community College Petrochemical Initiative (CCPI), and Gulf Coast Workforce Solutions. The council focuses on the skilled talent pipeline for plants coming on line soon.

The council has helped significantly increase enrollment in petrochemical courses at community colleges and raise completion rates for degrees and credit and non-credit certificates for technical programs.

Through these initiatives, UpSkill Houston is hoping to bridge both the skills gap and the people gap.

Fluor Craft Training Center

Energy, Procurement and Construction (EPC) service provider Fluor launched its Craft Education Initiative to invest resources in targeted colleges, schools and programs throughout the U.S. to get more students to pursue and complete high-value construction industry certifications. 

In addition to collaborations with colleges and contractor associations, Fluor offers free training programs for entry-level craft, welder upgrade training, craft certification and supervisory training.

Trainees receive industry-recognized entry-level credentials in the NCCER Core Curriculum in either electrical, instrumentation, millwright or pipefitting.

Fluor also offers 14-16-week, four-day-a-week welder training programs in Houston for experienced welders who want to hone their skills or advance to the next level.

Welders would train from Monday through Thursday and get paid to work on outages and other projects on weekends. 

Fluor has also opened a regional craft training center in La Porte, Texas, for both entry-level and welder upgrade training. 

By Heather Doyle