Human Resource Practices and Employee Retention Issues in Oil and Gas Sector of Pakistan

Abstract

The important role played by the Oil and Gas sector in modern economies cannot be over emphasized. The Oil and Gas sector assumes added importance for countries like Pakistan which are faced with the situation of rapidly depleting resources and a continuously increasing demand. In an attempt to bridge the demand and supply gap, Government of Pakistan has given special incentives to this sector due to which there has been an upsurge in the exploration for Oil and Gas in the country. At present the domestic Oil and Gas sector is characterized by the presence of many companies and the overall structure of the industry is fragmented and thus highly competitive. The competition among the existing players is not only about being able to take a larger share of the pie but also to acquire resources which includes technically qualified competent employees. The sector comprises three streams or business areas/segments. These areas are called the Upstream, the Midstream and the Downstream business segments of the industry. Three Pakistani companies selected for research are, Oil and Gas Development Company Limited (OGDCL), Mari Gas Company Limited (MCGL) and Pakistan Oilfields Limited (POL). All these companies are active participants in the Upstream segment of the industry. The companies operating in the upstream oil business engage in Exploration and Production of Oil and Gas. Besides the requirement of enormous financial and technological resources, success of these companies largely depends on the technical skills of their Geologists, Petroleum Engineers, Drilling specialists and Geophysists. These categories of employees after certain amount of specialized training and experience are highly valuable as both the operating companies and the services providers operating in the upstream industry segment are always on the lookout for competent technical employees. These categories of technical specialists have to perform highly specialized tasks under a set of tough field conditions. The nearly similar working conditions encountered by this category of employees while working for different companies makes them highly migratory. Companies in the Upstream segment of the industry have to adopt special measures to retain them as they are essential in helping their companies to achieve their business objectives. This research paper contains a literature review comprising extracts from the contemporary thought in the area of employee retention, an industry overview, in-depth study and analysis of the Human Resource practices followed by the three selected companies. Towards the end a linkage between the HR practices followed by various companies and the impact of these practices on the ability of respective companies to retain their competent technical employees has been established. A comparison of the HR practices followed by the three selected organizations and their voluntary turn over figures confirms that the better the HR practices of an organization the lower is its voluntary turnover rate and vice versa. The paper ends with company specific recommendations. These recommendations are based on conclusions drawn from the analysis and are aimed at addressing the weakness of the respective companies as identified during the course of research.