INSIGHT: Making US chemicals attractive as well as lucrative

02 April 2014 23:02 Source:ICIS News

By Nigel Davis

HOUSTON (ICIS)--The workforce issue in US petrochemicals is hot and can only get hotter.

Companies have struggled for years to attract not just the brightest and the best to an industry that does not have a great reputation and almost zero public image but also the very people it needs to run its plants and facilities.

Upstream petrochemical producers, excited by an abundance of riches in the form of natural gas liquids from shale, want to move fast and build, build, build. But they recognise that their labour costs could rise significantly if they all do so at the same time.

Even if construction of the new ethylene and derivatives plants is delayed, there is a need for technicians and gangs of construction workers to design and to build many more plants, and operators and others to run them.

Collectively, and individually, companies are working to tackle the potential overload. There will be some well paid jobs for craft as well as technical workers, for foremen and other managers. For some, an interesting and lucrative career beckons.

The problem is that companies have been forced into increasing efficiencies in recent years and have had, in some respects, the opposite problem – how to retain a core of talent in a shrinking industry. Older workers have been let go as the pool of employees has shrunk.

But with feedstocks in abundance the situation is reversed. Companies need to pre-empt labour shortages and cost increases. They have to open channels to the high schools and colleges that will produce the graduates they need. They realise that they have a lot of persuading to do.

This is a very recent phenomenon catalysed by the shale revolution and it is clear, particularly, that the shortage of crafts people will not go away soon. The industry faces a shortage of technical professionals as well and there is a potential leadership challenge as the pool of individuals available to head project and operator teams is diluted.

The industry is cyclical in its demands for labour as it is in its financial performance, but at least companies now recognise their workforce problems.

Speakers on a panel on this subject at the AFPM International Petrochemical Conference (IPC) on Tuesday highlighted the need for greater effort on the parts of companies individually and collectively on the workforce front.

There are messages to broadcast not just to high school and college students but to the unemployed and the under-employed that the industry needs them. There are suggestions that the sector can be more active in programmes to help employ former military personnel.

Chemical companies were present at a recent pre-job fair in Texas for eighth graders, which attracted 8,500 14 year olds. The message to them was why not consider a two year course, instead of four years in college, and a craft profession after which mechanical and instrument technicians can earn $50,000 a year and welders $70,000 a year. Currently, job prospects are good.

But there are no quick fixes here and one size does not fit all, either from a petrochemical producer, an engineering and construction firm, or from a young person’s point of view. The dilemma faced by the first two is one of image and understanding.

The manufacturing sector, chemicals included, has slipped far off the radar of employable young people. There are, on the face of it, more attractive occupations than foreman, safety officer, mechanic or instrument technician.

But the industry has its attractions too and now that pay rates are rising fast, it can argue strongly in favour of possibly steady and lucrative careers.

Companies will have to argue strongly on this issue, however, and focus on providing careers for their employees rather than one-time jobs.

It is also a matter of working collectively, not simply with other industry participants but with educational professionals and with government. As the shale revolution evolves, the labour issue becomes much more broadly based across manufacturing. It becomes one facing not simply petrochemicals

“The problem we need to think about is developing that labour pool of talent that can build, operate and maintain all the manufacturing infrastructure in this country for the next 20, 30, 40 years,” CP Chem CEO Peter Cella said on Tuesday. Cella was a member of the IPC panel of the American Fuel & Petrochemical Manufacturers (AFPM).

“It’s going to take a lot of partnerships, collaboration across industries, companies, governments, with educators and global municipalities so we can all get the message out to move that cultural, societal needle to re-attract the young students in this country to take a manufacturing-based career,” he said.

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By Nigel Davis