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ECONOMIC REPORT
2016
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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
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.
The industry
recognises that it
must involve and
engage with the
people behind its
success to help
shape its future.