Economic Report 2016 - Oil & Gas UK

ECONOMIC REPORT 2016

7. Employment Over the last 12 months, employment in the industry has continued to fall, particularly onshore, due to depressed upstream activity in the current economic climate. Changes to equal time working rotas by a number of operators have also led to reductions in the offshore workforce as companies have targeted efficiency and productivity improvements and cut costs.

The industry has also been experiencing more turbulent industrial relations than has been the case for many years. In 2015, there was a threat of industrial action by construction and maintenance personnel as well as catering workers and, at the time of writing, there is industrial action taking place – the first offshore strike action for more than 25 years. Employers and trade unions recognise that morale is impacted both on and offshore and that engaging the workforce is key to achieving the goal of MER UK. Improving the international competitiveness of the UKCS is critical for the industry to be able to attract the capital required to sustain employment in the long term. The industry recognises that it must involve and engage with the people behind its success to help shape its future. The work of the Efficiency Task Force (see section 8), particularly the co-operation, culture and behaviours stream, is taking into account the imperative of improving workforce engagement by sharing success stories and good practice, and by developing understanding of the challenges facing the industry and the positive future that could lie ahead if the sector makes the necessary adjustments now. 7.1 Total Employment

The industry recognises that it must involve and engage with the people behind its success to help shape its future.

Across the UK, around 330,000 jobs are currently supported by the offshore oil and gas industry through direct employment 31 , indirect employment 32 and jobs that are induced by the sector’s wider economic contribution 33 .

Although the industry continues to support a significant level of employment across the UK, the 2016 estimate represents a 27 per cent reduction from peak employment of around 450,000 in 2014, when Brent crude was trading at over $100/bbl. The decline is made up of around 84,000 job losses in 2015 and a further 40,000 during 2016.

31 Those employed by companies operating in the extraction of oil and gas and associated services. 32 Employment as a result of supply chain effects caused by oil and gas sector activity. For these companies,

extraction of oil and gas and associated services will be one part of a wider business. 33 Employment supported by the redistribution of income from the oil and gas sector.

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