The global fallout from the crash in the price of crude oil is set to provide a windfall in applications to some of the world’s top business schools.
The biggest energy groups are being hit by the plunge in Brent crude since last summer that has led to an estimated 70,000 job losses globally and caused $200 billion of spending to be shelved, according to the consultancy Wood Mackenzie.
Ravi Kiran, an executive at ABB, a leading provider of technology to energy companies, told BusinessBecause that with sustained low oil prices, a lot of expensive exploration and processing projects will be put on hold, “so that will impact employment growth”.
Yet business schools believe the plunge in the price of oil will push managers into their programs. They compare this trend to the flow of talent into finance programs in the immediate aftermath of the global financial crisis.
Joseph Doucet, dean of the University of Alberta School of Business in Canada, was quoted as saying he expects to have greater competition for places on the school’s MBA in response to the drop in oil price.
“There won’t be as many jobs,” he said. “But there is always hiring and there are always new needs — even when there is downsizing, rationalizing of investment portfolios and job cuts.”
Last week Royal Dutch Shell said it would cut 6,500 jobs in 2015 and Centrica, owner of British Gas, announced it would cut 6,000 jobs. Total and BG Group, two of Europe’s biggest energy groups, have previously said they would slash headcount in response to the fall in oil prices, from $115 in June last year to about $50 a barrel this month.
John Butler, associate professor at the Energy Management and Innovation Center at McCombs School of Business in Texas, said it is “too soon to tell” how the crude oil crash will impact applications. “That will be easier to gauge next fall,” he said.
The shale oil industry in the US has been hit particularly hard. “We’re starting to see some employer pushback as a result, which is why the energy industry is notorious for having large gaps in employee age — they halt hiring for periods of time in response to significant drops in oil price,” John said.
Robyn Gleeson, director of the Career Development Centre at AGSM in Australia, said industry contacts are telling him the global energy markets are “depressed”.
“It stands to reason, then, that the industry and services providers to the energy industry have limited opportunities available currently,” he said.
But he added that the Sydney based business school is seeing higher quality jobs available for MBA graduates, as opposed to a large quantity of jobs advertised.
The prospect of an inflow of applications has convinced some business schools to launch specialist MBA programs focused on the energy industry, completing with established courses such as at Jones Graduate School of Business, Duke’s Fuqua School, and Berkeley-Haas.
Since January this year, at least four business schools have launched modules focused on the energy industry: Kenan-Flagler Business School; Boston University; Louisiana’s Ourso College of Business; Texas’ Jindal School of Management.
Kenya’s National Oil Corporation also announced a program at Nairobi’s Strathmore University to expand the pool of oil and gas talent in Kenya for when the industry “takes off”, said National Oil chief executive Sumayya Hassan-Athman.
Michael Pollitt, a professor at the UK’s Cambridge Judge Business School who specializes in energy issues, declined to “speculate” on the impact of energy prices on business schools.
But he highlighted the opportunities in clean energy and renewables: “Renewables investment has created large numbers of jobs in the renewables sector,” he said. “However, changing energy prices simply shift jobs around well-functioning economies.”
David Elmes, head of Warwick Business School’s Global Energy MBA, said: “The turbulence and uncertainty we have seen recently doesn’t alter the challenges of providing sustainable energy that’s used efficiently across both mature markets and the developing economies, which are still growing at significant rates.
“So we will be looking at our future enrolment with interest to see how the mix of companies and countries will change.”