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Insight: A brief history of RIF-ing

Friday, April 11, 2014

Once again, there is a lot of excited chatter about cost cutting in our industry. Oftentimes in the past, this has meant cutting great swathes of people (also known in better times as ‘our most valuable resource’) out of the team. Now I see it’s happening again – RIFs are in progress at, for example, BG and Weatherford to highlight just two.

Here’s something to think about: perhaps the only person you can trust to manage your career to your expectations is yourself, unless companies change their behaviour significantly!

So what is a RIF?

Please note I am not talking about a riff which I understand in music is a repeated chord progression, pattern, or melody, often played by rhythmic instruments.

No, I am talking about the tendency of folk in our industry (let’s blame HR, it’s easier that way!) to hide redundancies under a veneer of verbiage.

After all, ‘job cuts’ is too blatant and incomplete, ‘manpower reductions’ only slightly less so: so we get to terminology like ‘rightsizing the organisation’ and my favourite (which I learnt in the USA in the mid-1980’s) which is ‘RIF-ing’. RIF = Reduction in Force, you see. And it was accompanied by such delights as folks’ swipe cards not functioning when they arrived at work; Town Hall meetings in which everybody received an envelope on arrival, to be opened on command, those with a green slip being told to return to their desks etc etc.

All this was the part of the cost cutting wave of the second half of the 1980’s; there was another one in the second half of the 1990’s. The latter especially ‘benefitted’ from the synergies available from the various mergers of the time.

With the extreme benefit of hindsight, we can see that this bloodletting has had two profound effects on our industry, driven by the fact that:

  • Many experienced people were let go.
  • Graduate recruitment dried up to a trickle.

By 2005+, when our industry was back in better times, the realisation had dawned that this RIF-ing had resulted in:

  1. An ‘underweight’ generation of folk approaching 50, who were going to retire fairly soon, taking their knowledge with them. This was sometimes referred to as “The Great Crew Change”
  2. A real shortfall in the absolute number of petrotechnical staff available to fill the mushrooming number of jobs. CERA foresaw a 10% global shortage by 2010.

There was some wailing and gnashing of teeth, with various industry luminaries going so far as to blame the shortage of decent staff for the widespread failure of development projects to be delivered on time (though our Finding Petroleum Forums have revealed that there is in fact a different root cause). This presentation is a good example of the genre.

As I outline in my next article, the perception of a simple numerical shortfall has largely gone away, partly because graduate recruitment in general is way up, and partly because the Majors have found it both perfectly acceptable and desirable to hire Russian, Chinese, South East Asian, South American Petro-technical staff (actually emulating something Schlumberger have been doing for years).

The problem of many years of knowledge walking out of the door to play golf, go on a cruise or lie on a beach has not gone away, however.

And therefore the shortfall remains - of knowledgeable 20+ years’ experience petro-technical professionals.

Author: David Bamford
Company: Petromall

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