Nowhere is demand greatest than the cyclical oil and gas industry, which has suffered from a near 50% plunge in the price of crude oil, altered by a surge in US shale output. Other areas, such as renewables and technology, are also promising.
Jobs and spending have been slashed at energy majors like BP and Total, but a lack of seasoned oil managers has ensured recruitment demand remained during times of crisis. Jane Christopherson, managing partner at executive search firm Curzon Partnership, says: “It’s a market-driven product. Companies are still playing catch-up.”
A survey by Schlumberger Business Consulting, an arm of the world's largest oilfield services company, forecast that 22,000 senior professionals would leave the oil industry by 2015.
By 2016, the shortage of experienced oil professionals will reach 20% of the talent pool.
The North Sea is particularly exposed. The oil and gas sector is expected to create 8,000 new roles in the UK over the next two years, with 38% of companies naming skills shortages as their greatest challenge, according to recent research from Bank of Scotland.
Stuart White, a commercial banking director at the group, says that more firms are “looking to expand internationally and tap into the markets with the largest levels of recoverable reserves”.
Companies are increasingly fighting over a shrinking pool of experienced energy workers.
A recent oil and gas industry survey by Strathclyde University found that half of respondents said they had lost core staff in 2013 – and struggled to recruit for managerial and professional roles.
Business schools have taken note, as the energy industry seeks to replenish its ageing workforce to keep the lights on. David Elmes, head of the Global Energy MBA at Warwick Business School, says: “The energy industry of the future needs a new generation of managers and leaders.”
Top-tier business schools have developed myriad specialist energy courses to educate the next generation. Waves of new MBA programs focused on energy – from fracking to solar generation – are being launched.
The complexity of global energy means that careers are often diverse, drawing on multiple functions as well as offering geographical mobility. Western oil companies send staff to production sites as far afield as Alaska and Azerbaijan.
There is an abundance of fossil fuel and while demand may have peaked in developed countries it is still rising in emerging economies.
The International Energy Agency, the watchdog backed by developed nations, forecasts that global consumption will grow by more than a third by 2040. This will ultimately drive up employment, say experts.
George Andrews, associate dean of degree programs at Jones Graduate School of Business, says: “As the industry grows, we have seen an increasing demand for individuals who have the skills to understand the complexities of a large and expanding market and the effects on company dynamics.”
Unless there is a combined effort to tackle the threat of climate change, most of this added energy demand will be for fossil fuels.
But the industries which rely on fossil fuels are beginning to show signs of a skills shortage at the management level.
One example is the global mining market – an age-old industry that has grown rapidly but has suffered from talent scarcity and falling commodity prices.
Like oil’s wheel of fortune, the mining sector’s is turning again as a cohort of experienced managers are approaching retirement and cracks in the ceiling begin to show.
Rohan Hazelton, vice president of strategy at Goldcorp, the world’s largest gold miner by market capitalization, says: “Over the next five to ten years, many mining executives will be retiring. The industry needs a new wave of leadership.”
While talk in the global energy sector is about an age of abundance, there are longer-term trends that suggest resource constraints will re-emerge, as companies slash investment and cut production in response to falling prices.
The world’s most accessible reserves of oil are in the Middle East but the tensions in the region could easily disrupt suppliers. The US shale gas revolution has set off a wave of production however, driving down costs.
The location of the industry’s production is expected to shift further, due to be driven in-part from companies recruiting new managerial talent, according to Russell Williams, director of the University of Aberdeen’s MBA in Energy Management.
Hydraulic fracturing and horizontal drilling – fracking – has led to the creation of more than 200,000 jobs in US shale since 2007.
The boom has spread to other markets like the UK, which professional services firm EY estimates could create 64,000 jobs directly linked to shale exploration.
Ken Cronin, chief executive of UKOOG, the UK onshore oil and gas industry body, says the UK shale sector will bring benefits to other sectors and create sustainable, well-paid jobs. But he adds: “It is early days and we have a lot of work to.”
The international nature of the energy industry means managers typically have to spend time outside of their home countries. “Demand growth is predominantly international,” says John Butler, associate professor at the Energy Management and Innovation Center at McCombs School of Business.
Shale is changing this. It is easier for American graduates to stay closer to home and the big shale producers like ExxonMobil and ConocoPhillips require less international experience.
In Europe, a global background is seemingly more important. France’s Total, for instance, says that it hires 10,000 people each year – 67% of whom are recruited outside Europe.
Robyn Gleeson, director of the Career Development Centre at AGSM, says employers place more emphasis in graduates with strong decision making skills.
The big oil majors and services groups – including Baker Hughes, BP and BG Group – have also sought to hire locally in countries in which they operate. BP, for example, says it will try to lift its 2,800 local hires to 90% of its total.
Locals command lower salaries than expatriates. Many business graduates seek to develop international careers but enhanced competition is putting pressure on pay, according to recruitment firm Hays’ oil and gas report.
Still, managers can look forward to rich rewards: imported hires earn average salaries of $100,600, according to Hays’ survey.
With rising global energy demand, companies’ focuses are shifting to innovation.
Schneider Electric, the global specialist in energy management, invites MBA students to develop innovative energy solutions for cities each year.
Olivier Blum, chief human resources officer at Schneider, says that a new generation of future leaders care for the planet: “They are fully aware that the increased demand for energy will have to be balanced with social progress and environmental protection.”
One area that has generated investor interest is renewables. “The energy sector is at a crossroads as countries try to switch to a low-carbon economy,” says David at Warwick.
The need to reduce carbon emissions and ensure energy remains affordable is driving this focus at business schools.
Michael Pollitt, a professor at Cambridge Judge Business School who specializes in energy issues, says this is the result of higher taxes on carbon and higher final energy prices because of subsidies to low-carbon generation.
Subsidies have also benefited some of the service and product providers to the energy industry, according to Ravi Kiran, an AGSM MBA and industry solutions executive at a business of ABB, a leading provider of technology to energy companies.
While slower than expected, the number of people working in wave, wind and tidal energy was forecast to grow from about 34,500 in 2014 to around 52,500 by 2023, according to EU Skills, the energy sector’s skills body.
The solar industry already employs more than 145,000 people in the US, according to the Solar Energy Industries Association, a trade group. And ExxonMobil, the US energy group, expects demand for electricity to grow by 90% by 2040.
The oil price may have suffered a sharp drop but with these rates of growth coupled with an ageing workforce, demand for talented managers may be stronger than market sentiment.