Forecasting critical skills needs

In the coming years, operators will be on the lookout for pipeline integrity engineers, project engineers/managers, and construction managers.

A study conducted for the INGAA Foundation has taken an in-depth look into the positions and functions required by the natural gas transmission industry.

The study, entitled Critical Skills Forecast for the Natural Gas Transmission Industry, identified positions, skills, and knowledge that may be in short supply in the future. It also examined critical functions in the design, construction, operation and maintenance of pipelines.

As a key point of interest, the study located the largest risk “intersections” of workforce and tasks, and thus provides the industry with a place to focus efforts to enhance skill development methods and materials for these vital positions.

Workforce supply forecast

In the short-term, the declining economy has eased the competition for new entrants into the workforce. Additionally, retention is not as significant a risk because of delayed retirements and workers’ concerns for their job security after changing employers.

In the medium to long-term, the construction industry, especially non-residential construction, will be the largest competitor for the workforce needed by the natural gas industry. In the past, the manufacturing industry has been a major competitor for skilled trades and engineering. Manufacturing now is a declining industry in the U.S., and is expected to continue losing employment over the next decade.

The Department of Labor also predicts declining employment for operations positions in the natural gas industry due to mergers and increasing automation. Still, the Department of Labor cites retirement attrition without suitable replacement candidates as a major reason for an increase in the industry’s use of automation.

Areas of lowest risk are positions with significant employment in the manufacturing industry, such as machinists, CNC operators, and first-line supervisors.

Areas of moderate to higher-risk are positions involved in the design and construction of natural gas pipelines, facilities, and distribution infrastructure, such as surveyors, entry-level civil engineers and environmental compliance inspectors, that are in common with the construction industry. Also included in this category are operations positions, such as gas controllers, gas compressor and gas pumping station operators.

Areas of greatest risk are positions that require significant industry experience and that would be at risk from a shrinking industry workforce pool due to attrition, such as pipeline integrity engineers, project engineers/managers, and construction managers.

Critical industry positions and functions

Executives in the industry have found that the recent weakened economy has both workforce attrition and increased supplies of skilled job applicants. Still, these effects are expected to last only until the economy recovers. A larger problem may be created by an unprecedented level of attrition at that time.

The INGAA Foundation study determined that the skills and knowledge required for the design and construction job functions are at the highest risk for present and future supply shortages. These high-risk positions are:

Design and construction:

• Pipeline Integrity Engineer
• Architect
• Civil engineer
• Electrical engineer.  

Construction:

• Construction manager
• Surveyor, surveyor technician, pipeline mapper
• Environmental compliance inspector
• Electrician.  

The critical functions that these positions perform were identified by assessing the functions’ business value, use of resources, skill level requirements, and cost for poor performance. The most critical functions identified by respondents are:

Design:  

• Pipeline structural analysis
• Pipeline design for corrosion control
• Pipeline design for compliance
• Design of measurement systems.  

Construction:  

• Project management
• Drilling/boring planning and performance
• Quality inspections for new systems and stations.  

Maintenance:  

• Pipeline integrity
• Management of compliance requirements.  

Industry personnel most often commented that superintendents, construction managers, project managers, and specialized natural gas engineers were difficult positions to hire for three reasons:

1. The industry experience required

2. The difficulty in transferring knowledge because of the complexity of the job functions

3. The limited availability of documentation or training materials.

Risks to industry capability

The study found that complacency now has the potential to have significant impacts in the medium to long term. Although retention is not a significant concern today, companies that ignore the risk factors for attrition (e.g., employee satisfaction, compensation benchmarking, and career development) will be at greater risk as the economy recovers.

1. The expected bubble in retirement and non-retirement attrition poses a risk that skills and knowledge will be lost by companies that are not maintaining effective skill development and knowledge management practices.
2. At the highest risk of supply shortages are specialized areas of the industry in which there are a limited numbers of practitioners and limited external training resources.  These specialized areas include pipeline integrity engineers, reservoir engineers, project engineers/managers, and construction managers.  

The study also found that relying on previous practices may not be sufficient. In the past, the natural gas industry often has maintained expertise in design and construction by growing employees through the ranks. Increasing the speed and quality of skill development will be required to avoid unfilled positions and/or the consequences of poor job performance in the event that there is either a bubble of deferred attrition or increased competition from the construction or electric power generation industries.

Study methodology for identifying critical skills, functions, and positions needed by the natural gas transmission industry.

Recommended actions

The study offered a number of recommended actions for members of the INGAA Foundation:

Identify and manage key skills

 Look to those employees who have key skills and knowledge to ensure those talents are captured and perpetuated within the company. Each company should begin the evaluation process today to ensure that they maintain the intellectual assets that will enable them to succeed in the future.

Develop a plan for managing attrition

Continue activities that increase employee satisfaction and engagement. Consider strategies for delaying retirements that can be implemented quickly if attrition exceeds the planned level.

Develop a median and a worst-case attrition model for workforce planning. Determine the likely level of attrition by year over the next five years. Also determine the worst-case attrition scenario in which all eligible employees retire as a group and non-retirement attrition doubles from the historical level.

Assess the present capability to bring on board and train replacements for the number of employees who are likely to retire or change companies after the economy recovers. Put in place plans to meet expected attrition levels. Also, develop contingency plans for reducing attrition, improving skill development capability and effectiveness, managing headcount requirements (e.g., maintenance service from equipment manufacturers, overtime) and managing demand (e.g., flexible project schedules, subcontracting), to guard against the worst case in which the in-house ability to recruit, retain or develop employees falls short of requirements.

Develop a pool of employees with critical skills

The present method of hiring experienced employees is unsustainable in light of expected growth in the industry and current demographics. To ensure that industry-specific skills and knowledge are readily available for the development of new employees, the industry should collaborate on detailed specifications for skills and knowledge required for key positions in which it is expected there will be shortages.

These specifications can form the basis for capturing the knowledge of experts and developing training materials. As part of this, companies should consider existing materials, the desired training lead-time, and the type of information or skills. The complex nature of these positions may require innovative training methods, such as tactical decision games or simulations, in addition to the standard methods of process or procedure documentation.

The pipeline industry should collaborate with local or national educational institutions to convey the industry’s needs for critical positions. The industry also shoud expand its efforts to communicate both the schools and to students the benefits of a career in the natural gas industry.

Conclusion

Now is the time for an investment in workforce planning, knowledge management and skill development. There may not be enough time after the attrition bubble has burst for the industry to develop and implement plans that will avoid the consequences of lost knowledge and excessive lead-time for training, as well as the consequences of increased attrition and compensation inflation as companies compete for competent workers in a diminished industry workforce pool.