The energy industry is no stranger to instability, but the “double pandemic” of the global COVID-19 crisis and oil price collapse has created an atmosphere of uncertainty that presents longer-term challenges. Our workforce is changing. Many oil and gas companies are in survival mode, with tighter budgets and more limited internal resources than ever before. The crisis-within-a-crisis has been a shock to the industry, presenting a host of financial and operational challenges in a dire economy.
Reducing overhead is a top priority, as profitability is challenged for the foreseeable future. Some companies are administering pay cuts to existing resources, while others are making staff cuts facing an extended down cycle. But there’s a third solution that helps preserve capital while maximizing resources—hiring consultants. Consultants offer the benefits of agility and expertise without the expense of full-time employees. We’ve defined five key benefits to adding a consultative partner to strategic areas of the business:
1. Less need for an expansive, centralized team
Sometimes, less is more. Experienced oil and gas professional talent isn’t particularly hard to find, but different assets often require knowledge of customized or proprietary operating models. With budget constraint due to the pandemic economy, it’s simply not profitable to keep specialized employees on staff who offer expertise only within a small range of projects. When companies need a specialist or specialized equipment, you’ll use less budget hiring a consultant for the course of that single project than it takes to train and retain a specialist full time.
2. Quick responses to business changes
Consultants are experienced industry professionals, so they don’t require extensive training. For businesses with gaps in staffing due to COVID-era downsizing, consultants bring their expertise to fill specific business needs without a time-consuming onboarding process. This allows for a smoother transition into working on a project, minimizing disruptions and increasing efficiency. Having connections to consultants allows a company to quickly respond to personnel or financial changes, filling staffing holes with experts who can step right in to short-term roles.
3. Experience to stay ahead of the competition
Consultants understand the industry well, so they’re able to help during planning and execution stages to ensure companies stay one step ahead of the markets. In an extremely competitive oil and gas industry, companies are in a race for every dollar and are focused on making the most of existing assets. Hired consultants have years of industry experience informing their work, giving businesses insight and agility at the most critical stages of project planning.
4. Responsiveness in the face of uncertainty
The oil and gas industry has always been volatile, but the global pandemic has destabilized it for the foreseeable future. Experts predict that COVID-19 and the economic fallout surrounding it will continue to affect the industry for years to come. No one knows what’s coming next, so having connections to industry experts is a valuable asset. If a company is experiencing high turnover, consultants can step in on short notice to assist in bringing a project to completion.
5. Project-based for budget savings
Consultants generally cost less than hiring full-time employees because their work is project-based. Although their hourly rates may be higher, companies are not typically responsible for contributing toward consultants’ taxes or other benefits, and the limited nature of the project keeps costs lower overall. Consultants make it easy to pull in only the necessary resources specific to each individual project, helping companies cut costs and increase ROI.
Amid strong economic uncertainty, oil and gas companies are making tough decisions every day. Hiring consultants to fill in for lost resources or employees requiring leaves of absence is a smart choice for maintaining project momentum and minimizing overhead.