PESA HR/ Supply Chain Roundtable

Current state of the labormarket and implications for O&G industry

May 23, 2017

PwC

Labor trends- the big picture

PwC

Per PwC’s 20th Global CEO Survey, 64% of Oil & Gas CEOs are worried about key skills shortages.

3

PwC

71% said that Leadership was the most difficult skill to find

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PwC

Other factors to consider

50%Increase in mobile employees by 2020

20%+Workforce 2020 will

be comprised of contingent workers

65%Employees want to

work for organization with a social conscience

PwC – Talent Mobility 2020

PwC – Future of Work, the Journey to 2022

PwC – Women in Workforce Index 2013

25%+Female labor force participation rate expected to climb

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PwC

Current state of the labor market and implications for O&G companies

PwC

2.3%

3.6%

3.7%

4.6%

6.5%

0% 2% 4% 6% 8%

Bachelor's degree or higher

Total

Some college or assoc.degree

High school only

No high school diploma

Unemployment Rate by Educational

April 2017

2005-06average

The US labor market is tightening

80%

81%

82%

83%

84%

85%

2001 2003 2005 2007 2009 2011 2013 2015 2017

Labor Force Participation

Source: Bureau of Labor Statistics and PwC Calculations

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PwC

Tight labor market and increased drilling activity

Goldman Sachs estimates 80,000- 100,000 new jobs will be created in the next 2.5 years, absorbing 8-11% of the unemployed population in energy-producing states

The tightening in labor markets, increased drilling activity, and the past 3-4 years are creating a feeling of distrust and uncertainty in the industry

Re-deployable skillsets are moving into other industries, with high competition from technology and other industries

However, a recent survey by Reinsvold & Associates suggests:

o 60% of the executives believe that their industry will perform better in 2017

o 66% believe their own companies will perform better

o 34% expect their companies to increase their headcount

Sources: CNBC, Goldman Sachs, Raymond James, Reinsvold & Associates Oil & Gas Executive Outlook 20178

PwC

Distrust in the industry is a real concern

Source: 2016 Edelman Trust Barometer

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74%

64%

61%60% 60%

58%

53%

51%

40%

45%

50%

55%

60%

65%

70%

75%

80%

Technology Food & Beverage Consumer Goods Telecom Automotive Energy Pharma Financial Services

Level of trust by sector(2016)

PwC

Oil and gas job market: 2014 vs 2016

Sources: Indeed

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-86% +144%

-86% +140%

-83% +86%

-79% +6%

-40% +31%

-57% +31%

-71% +44%

-51% +16%

Postings (share of all posting)

Searches (share of all searches)

PwC

Postsecondary enrollment trending down

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

Sources: National Center for Education Statistics

11

PwC

US petroleum engineering enrolment trends

Source: U.S. Association of Petroleum Department Heads

12

PwC

Potential worker shortage

Sources: BLS, 2022 occupation projections for oil and gas industry (CNBC)

13

PwC

Companies that align talent strategy with business strategy realize performance gains

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85% stronger financial performance

77% better strategy implementation

75% higher revenue growth

PwC, Project Management Institute, Talent Management – State of the Market November 2014

Thank You

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