Falling price gives lift to wider economy
Oil jobs crisis helping other firms find skilled workers
Thousands of jobs are expected to go in the North Sea if the price continues to plummet, but rather than being thrown on the scrapheap many will return to firms they left to take up highly paid jobs in the oil industry.
Not only will this mitigate the number of people being put out of work, it will energise those firms finding it hard to attract quality people.
Oil prices have tumbled from $115 to $60 since June chiefly as a result of a glut in supply. It threatens to make many operations in the North Sea uneconomic prompting firms to cutback and mothball projects.
In an interview with Daily Business, Scott Black of FWB Park Brown in Edinburgh says this will work in favour of the many companies in Scotland which lost good staff or have been unable to hold on to them because they could not match the high salaries that lured them away to the oil industry.
“Many of those being tipped out of the oil sector have transferable skills so they will go into other companies which will now be able to afford to pay them at a level they can afford,” said Black.
He said many oil sector workers, including those in technical and health and safety work, will find jobs in infrastructure projects where spending is currently high.
“The oil industry has been soaking up a lot of the best people and many will just go back into the industries they came from.”
He also predicts a wave of mergers and acquisitions as bigger companies sell off assets and small firms see an opportunity to sell and realise value.
“Most of the private equity world will be interested in the opportunities created. They have a lot of cash.”
Guy Martin, of rival recruitment agency Eden Scott, said close to half the turnover of his business is in the oil and gas sector and agreed that the wider economy would benefit from the fall-out of jobs from the sector.
“Those guys will be hurting, but it will be good for the rest of the economy. There have been cuts in contractor rates, which is no bad thing as they have been high,” he said.
Black and Martin agreed that the speed of the oil price fall has been a particularly damaging factor as it gave the industry less time than it needed to adjust.
But both were also predicting a good year ahead as other companies in the economy took advantage of the lower commodity prices.
Black said confidence had returned across the board so that companies were willing to fill positions and create new ones which had been on hold for some time.