Labor is aÂ worker/ tradespersonÂ employed in the physicalÂ constructionÂ of theÂ built environmentÂ and itsÂ infrastructure. Based on the location they work, labor could be named as Onsite and Offshore Labor
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Around1400 offshore employees are demanding a better deal on employment, wages, and conditionsMarch 20, 2023
UK offshore workers are planning to go on a strike due to pay disputesMarch 14, 2023
There is a vote on strike action for about 70 of TotalEnergies SE's oil and gas employees in the North Sea have voted on strike actionApril 17, 2023
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Offshore Labor Industry Benchmarks
The average annual savings achieved in Offshore Labor category is 16.40%
The industry average payment terms in Offshore Labor category for the current quarter is 75.0 days
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Offshore Labor market report transcript
Global Market Outlook on Offshore Labor Market
The global offshore labor market is valued at $77.5 billion in 2023. It is expected to grow at a CAGR of 4.5 percent to reach $92.4 billion by the end of 2027. In 2022, the offshore oil and gas market across all the regions improved on yearly basis
The demand for offshore labor is driven primarily by E&P activities, majorly in APAC, followed by ME and Europe
Discovery of deep-water assets and offshore wind projects are expected to drive the demand in offshore labor job roles
Global Market Overview for Offshore Labor
The global oil and gas offshore labor market for 2023 is estimated to be $77.5 billion
By 2027, it is expected to reach a market value of $92.4 billion, with a CAGR of 4.51 percent
The offshore wind installation is expected to double over the next four years, reaching 1,300 newly commissioned turbines in 2026. The demand is coming from the Northwest Europe market as well as APAC and US regions, which, in turn, triggers the labor demand
The recruiters are among the most sought-after professionals right now, which reflects increasing recruitment volume in a context of low candidate availability. When it comes to engineers, overall hiring in the industry has been tempered in recent months. The top required positions are Mechanical Engineers, Design Engineers, Petroleum Engineers, Electrical Engineers, Reservoir Engineers, Pipeline Engineers
The primary growth factor behind the steady job gains is the oil price rebound, which is expected to motivate US operators to ramp up investments to more than $90 Billion annually by 2027
According to the Global Wind Energy Council, by 2023, almost one-third of the world’s energy requirement would be met through offshore wind generation.
Market Drivers and Constraints : Offshore Labor
The number of offshore labor is directly driven by the demand for offshore E&P activities globally. The E&P activities is set to rise in 2023 due to increase in global upstream spending
An offshore well continues to produce comparatively same volume of crude for 10–15 years, whereas onshore wells reach approx. 50–60 percent of production in the first year. This would ensure long demand for offshore labor compared to onshore
Nearly, 70 percent of the world’s oil & gas production comes from mature fields. This high number of maturing fields would demand production and related activities on offshore, to tap the maximum reserves, in order to meet the increased demand globally
New deep-water discoveries are expected to drive the demand for the offshore labor market
Offshore developments in wind farms are expected to demand more offshore labor in the near term
Talent supply in developed economies has been under severe pressure, due to an aging workforce, high youth unemployment, tighter labor markets, an increase in automation, etc.
Stringent regulatory policies, health and safety measures to be followed on offshore platform would limit the number of labor on platforms
Young graduates are increasingly hesitant to enter the oil and gas industries, preferring to work in renewables instead. According to estimates, the oil and gas sector will require an additional 8,000 petroleum engineers to capitalize on current high oil prices
Since labor has to stay in rigs for a longer duration, companies prefer to keep the crew to minimum, in order to bring down the expenses on accommodation, food, etc.
Recent developments in drilling, such as increased drilling speed (~100 times), would bring down the drilling time by 50 percent. This would bring down the labor count and requirement
Supply Trends and Insights : Offshore Labor Market
Geographic Penetration: The top global suppliers operate across the globe
Regional Perspective: The market is highly consolidated with few local and regional suppliers.
Most adopted sourcing models: Hybrid model, master vendor and vendor-neutral MSP
Why? The primary reasons for using the regional/local strategy are due to the highly fragmented market, supply variance and the various legal regulations in each country
Most adopted pricing model: Percentage of spend and Markup pricing
Supplier Management Trends
Organization are engaging with staffing agencies to support employees that were laid-off during the COVID situation.
Use of the following supplier management strategies was positively correlated with buyer size: VMS, MSP, programs to encourage the use of diversity/woman/minority staffing suppliers, and trying out new staffing suppliers
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