Study: Most laid-off energy workers remain out of work

Nearly 90 percent of surveyed workers who lost their jobs during the oil bust either remain unemployed or opted to leave the oil and gas sector entirely, according to an ongoing study being conducted by University of Houston researchers.

Roughly a quarter of laid-off energy who participated in the study — out of 720 respondents thus far — found work outside of the oil and gas industry, while more than 60 percent of them remain out of work. Only 13 percent of them have found new jobs within the industry.

The two-year oil bust resulted in more than 215,000 U.S. jobs lost — including about 100,000 in Texas — and many of those workers may never return to the industry. More than 70 percent of the study participants said they’re nervous about the industry’s future and about 55 percent said they’re considering giving up on the sector entirely. About two-thirds of them complained about the way their companies’ layoffs were handled.

That could make it harder to find good job candidates as hiring ticks back up with the rebounding oil price, said Christiane Spitzmuller, principal investigator with the Center for Applied Psychological Research at the University of Houston.

“A good number of people are lost to other industries,” she said. “Oil and gas impacts just about everything here in all parts of our economy.”

The permanence of many leaving the industry will translate into high recruitment and training costs for new hires, who may not have had prior energy industry jobs, Spitzmuller added.

She conducted the project with Caitlin Porter, assistant professor of psychology, doctoral student Zachary Roberts and industry consultant Bob Newhouse.

“People see the industry as having low job security,” Porter said.

Even before the oil bust, the energy sector was still grappling with a skills gap that resulted from people avoiding the industry after the 1980s oil crash, as well as a recent wave of retirements.

The study focused on energy workers who lost their jobs within the last two years. The research results recommend better internal communication about how downsizing decisions are made and and how the impacted people are treated. The benefits of corporate layoffs for company are delayed for months because of associated severance payments and restructuring costs.

“The cost in laying people off may be bigger than the benefit,” Porter added.