Future skills needs of the Australian oil and gas industry: Identifying gaps & mismatches among skills demand and supply initiatives undertaken by key stakeholders

Importance and Key Contribution The oil and gas industry has vital importance to Australia due to its contribution to the economy and its role in supplying a component of the nation’s energy requirements. The resources... [ view full abstract ]

Importance and Key Contribution
The oil and gas industry has vital importance to Australia due to its contribution to the economy and its role in supplying a component of the nation’s energy requirements. The resources sector makes a significant contribution towards Australia’s prosperity in terms of national economic growth and regional development (Bahn & Cameron, 2013). An Access Economics (2011) report predicted very strong growth for oil and gas extraction/supply employment and predicted that the oil and gas extraction and supply sector will yield robust growth to the Australian economy by adding employment growth of approximately 9.4% annually to 2018, as major LNG (Liquefied Natural Gas) projects under construction move into their production phases (AWPA, 2013). The cost effective availability of required skills for successful execution and operations within the Australian oil and gas industry will guarantee the future success of projects of national interest. The Australian resources sector is continuously experiencing skills shortages and recruitment problems despite the current downturn in oil and commodity prices industry specific skill shortage issues still exist.
Aim of paper
The overall aim of the proposed study is to understand the future skill needs of the Australian oil and gas industry. The expected outcomes of the study are as follows: to examine current demand & supply for skills needed; to identify the critical skill needs by examining the gaps and mismatches between the demand and supply of skills; to measure the current level of engagement and coordination among key stakeholders and ; to develop and create an integrated system of coordination, strategic partnership and engagement among the key stakeholders to adequately address the issues of skills gaps and, mismatch in demand and supply of skills for the Australian oil & gas industry.
In this study, we aim to identify and explore new ways, sources and knowledge for employers as well as government policy makers and vocational training institutes and providers for effectively addressing the future skills needs of the Australian oil & gas industry. Furthermore, this proposed study will significantly contribute to the understanding of applying a mixed methods research design. It is argued that the best methodological choice for studying complex human capital development issues such skills shortages, mismatches and skill gaps is a mixed methods approach.
Theoretical framework
The oil and gas industry is a continuously expanding sector around the world and has faced many challenges in relation to attract, recruit and retain highly skilled employees ranging from technical rig workers to senior scientists and engineers (Parry, Davidson, Clark, & Guilford, 2006). In Australia, the resource sector which includes the oil & gas industry makes significant contributions towards Australian prosperity, additionally the sector operates within a highly competitive globalised environment and its future depends on its ability to remain internationally competitive and cost effective (Penny, Melanie, Stark & Sheales, 2012). Due to global competition, the critical challenge of human resource development and management of the Australian resources sector is not a onetime challenge, but is a continuous problem that needs a sustainable and continuous solution (Price Waterhouse Coopers, 2012). The resources sector is more prone to experiencing skills shortages and recruitment problems in comparison to other sectors because development projects are often in remote and regional areas of Australia and despite various initiatives by all stakeholders, employers in the resources sector have often found it difficult to fill certain positions in these remote and often isolated areas (Shah & Burke, 2005).
It is commented that in literature many good studies have addressed specific problems and somewhat solutions but comprehensive research of the problem is still needs be addressed in order to find sustainable solution involving all key stakeholders. Additionally, one solution to a problem if adopted separately and in isolation can further create problems in other contexts or areas. For instance, skilled migration has been viewed as an immediate solution to certain skill shortages; however it is also not without problems such as cultural adjustment of overseas workers etc. Therefore, there is a need for comprehensive research that can generate viable and sustainable solutions for the future skill needs of the Australian oil and gas sector. This study aims to involve all the stakeholders’ i.e., employers, education and training sector and levels of government. Our theoretical frame work for the study will be based on human capital theory (Tan, 2014) and stakeholder management theory (Freeman, 2010).
Research Questions and Methodology
The study is based on answering the following research questions (RQ):
RQ1: What skill gaps and mismatches currently exist in the Australian oil & gas industry?
RQ2: Are current initiatives sufficient to address the issues of skills gaps and mismatch and shortages in the Australian oil and gas industry?
RQ3: What are the future skill needs of the Australian oil & gas industry?
RQ4: How can key stakeholders in the Australian oil & gas industry work collaboratively to meet the future skill needs of the Australian oil & gas industry?
In order to explore the complete picture and gain in-depth understanding of the skills shortage problem, we will employ a mixed methods research methodological approach that goes beyond the simple combining of quantitative and qualitative methods (Tashakkori and Teddlie, 2010). In comparison to a single methodology, quantitative or qualitative, a mixed method research approach provides a better understanding of the research problem (Creswell, Hanson, Plano and Morales, 2007). The result of a study by Cameron (2011) into the utility of mixed methods research has supported the use of mixed methods in business, and management research.
An explanatory sequential mixed methods research design (Ivankova, Creswell, & Stick, 2006), in which the first phase is quantitative and followed with a qualitative phase, will be employed (Creswell, 2013). The first quantitative phase will involve data collected through an online survey. The online survey will be conducted by identifying representatives from key stakeholders groups such as human resource professionals, recruiters in oil & gas industry, government professionals working in government agencies responsible for policy issues related to skill planning, sourcing and development and officials of government & private vocational training institutes. The quantitative results will be used to construct effective questions for the qualitative phase which will employ semi-structured interviews. The semi-structured interviews will be conducted with at least 10 respondents from each of the key stakeholder groups. In the final stage, the results will be integrated to achieve results, recommendations, conclusions along with a proposed model for application in practice for the effective and sustainable solutions to future skilling. Figure 1 depicts the research design.
Figure 1: Research Design

Implications and contributions
The results of this research will significantly contribute to understanding the present skills shortage, skills gaps and demand- /supply gaps & mismatch issues in the resource sector and specifically the oil and gas industry in Australia.
The outcome of the research will suggest practical initiatives required to be taken by the key stakeholders (employers, government agencies and vocational/ training institutes and providers), in order to address these skill issues. Furthermore, the research will also help to understand the future skill needs of the Australian oil & gas industry.
The findings will provide evidence to the extent of suggested skills gaps, mismatches & shortage issues and whether a more robust coordination and strategic partnership among key stakeholders can improve the situation by shaping resources sector specific skills development programmes that will decrease dependencies on skill gap measures such as temporary skilled migration. To sum up, the intention of the study is to explore and recommend ideal strategic role required of key stakeholders in addressing the issues of skill gaps, mismatch in demand and supply of skills. The significance of the study is to suggest a viable alternative model and practice for meeting the future skill needs of the Australian oil and gas industry.
Key words: Skill mismatches, skill gaps, mixed methods, stakeholders, Australian oil and gas industry

Skill mismatches, skill gaps, mixed methods, stakeholders, Australian oil and gas industry [ view full abstract ]

Skill mismatches, skill gaps, mixed methods, stakeholders, Australian oil and gas industry