Air Energi Group, the global workforce solutions provider for the oil and gas industry, and the Queensland University of Technology (QUT), have published ground-breaking research providing extensive analysis of the potential workforce risks related to Australasia’s LNG sector, particularly involving a contingent workforce.
Entitled ‘Workforce Related Project Risks’, the report is based on in-depth interviews with a panel of industry experts drawn from a wide cross-section of perspectives, including operations, HR, project management, advisory functions, and contractors. A high level of rigour was applied to the process, with the use of QSR NVivo 10© software to identify, and analyse the key themes. The research was conducted by Karen Becker and Ms Michelle Smidt; QUT researchers with expertise in addressing workforce-related issues.
With an unprecedented level of LNG projects in the pipeline, there are concerns that workforce costs and continued personnel shortages could contribute to further project delays or cancellations. This will be critical to the future development of projects in Australasia, as well as those firms looking to benefit from the booming LNG markets of North America and East Africa.
“Engineering-based organisations have historically focused on technical risk and safety, whereas the people element has proved much harder to manage and quantify,” says Karen Becker, Senior Lecturer in the QUT Business School and lead researcher for the project. “The industry professionals we spoke to were cognizant of the fact that the people aspect of a project presents many potential risks, but also acknowledged how difficult it is to say which risks will be pertinent for a specific project. The findings of our report enable us to identify the highest risks that must be considered for any given project, providing real-world answers to a real-world problem.”
The report considers the impact of people-related issues on project schedules and costs in capital-intensive environments, and warns that time and cost overruns cascade through the supply chain. It also reinforces that the attraction and retention of talent has become a critical issue for the oil and gas industry at a time when the available pool of talent is shrinking due to high demand and an ageing workforce. With the major overarching risk of being unable to deliver a project on time and within budget, risks are broadly categorized into six core areas: project appeal, recruitment, on boarding and induction, retention, demobilization, and compliance.
“Despite increasing demand, the future growth of the industry remains uncertain,” states Matt Smith, Director – Global LNG Development, Air Energi. “The cost overruns and schedule delays being experienced in Australia’s LNG sector currently are just as applicable to any industry and region where projects have capital-intensive and highly-technical requirements. This is why it is so important that businesses take these lessons learned, and think differently about identifying and managing their people-related risks, particularly in large and complex projects. Our report findings have enabled the development of a comprehensive tool for identifying and analyzing the potential workforce-related risks for projects, and we will be making this tool available in Q2 of this year.”