Bouncing back from a layoff in oil and gas is possible, but it’s harder than it used to be

Dallas Gara knows the feeling that tens of thousands of Albertans have experienced over the past several years.

In 2016, he joined the swelling ranks of the suddenly unemployed. His job as a geophysicist with Encana was cut, along with those of about 800 other people.

“Almost the entire team was laid off,” Gara said. “So it was a pretty shocking thing.”

After two decades of working in oil and gas, he was forced to look elsewhere for his next job, and settled on entrepreneurship. He and a friend invested in an industrial crating company. At the same time, he turned his woodworking hobby into another business: Garawood.

Seven months after being laid off, with these two ventures starting to get off the ground, he got an offer to return to the oil industry. It started out as contract work but eventually led to a permanent job with Seven Generations Energy. In less than a year, he went from having zero jobs to having three.

“I would literally work all day, come home, do a little bit of woodworking, eat, and then go crating until midnight,” he said.

He and his friend ended up selling the crating company, but he still does woodworking on the side.

Gara knows his experience isn’t universal, but a recent study from Statistics Canada suggests it’s far from unique. At the same time, it looks increasingly rare.

The data shows a significant portion of people who lost work in oil and gas prior to the 2015 downturn soon ended up earning more money. Three years later, a quarter of them were earning at least $33,000 more than they did the year before they were laid off.

At the same time, the study also found that “for many workers displaced from the oil and gas industry, job loss leads to substantial and persistent earnings declines.” For another quarter, their earnings were at least $22,000 less three years later.

It’s hard to pin down the reasons for the difference between these two groups. Labour-market experts highlight some key things that can help people transition to a new job, but there’s no singular blueprint for pulling off this challenging task. Those who have successfully bounced back say a combination of timing, adaptability, personal connections and luck all played a role.

The study also comes with a bit of a catch. It tracked oil-and-gas workers’ fortunes from as far back as 1995, but full data from the most recent downturn — the one that started in late 2014 and really set in the following year — is not yet available. The early indicators, however, look more ominous for those struggling with a layoff since 2015.

Oil and gas has gone through booms and busts in the past, yes, but this most recent downturn looks different from the rest.

The study

The study relies on Statistics Canada’s Longitudinal Worker File, a specialized database that allows researchers to track people over time as they change jobs, start businesses, retire or make other changes that affect their income.

Given the lag in some of this data, however, the study wasn’t able to offer a full picture of how people laid off in 2015 or later are faring a full five years later. But from the data that was available, things looked more grim for them.

Take, for instance, the proportion of workers who found a new job within a year of being laid off. Through past downturns, this hovered between 70 and 85 per cent.

But for those who lost jobs in oil and gas extraction in 2015 or 2016, it was more like 60 per cent. 

Those who lost work in related support activities fared a bit better, at around 75 per cent, but that was still worse than workers in this field had fared after losing jobs throughout the previous two decades.

That comes as no surprise to Carol Howes, who studies the labour market for the PetroLMI division of Energy Safety Canada. She says it’s clear from the employment figures she sees that the latest downturn in the oil industry doesn’t look like the previous ones.

“Generally, it was cyclical: the industry did come back, you started to see hiring again,” she said. “The difference we’re seeing this time around is that we’ve pretty much had a persistent downturn since late 2014, early 2015.”

‘A unicorn’

Jeff Forsyth has gone through more than one crash in the oil industry and has always managed to come through the other side.

But he knows his experience is not exactly typical.

Forsyth worked for a startup that moved to Calgary from the United Kingdom in 2008. Shortly after arriving, the market took a crash amid the global financial crisis. The company, which focused on heavy oil, managed to recover, but Forsyth left in 2013 for a job with Cenovus, where he set up a geochemistry department.

Then came the 2015 oil-price crash. He was laid off, amid company-wide downsizing.

He took some time to evaluate his next move and, through some contacts, connected with a new startup that just happened to be looking for a new CEO with the type of skill mix Forsyth had.

“The kind of phrase they used at the time was, ‘You’re a bit of a unicorn: you have technical and business skills,'” he said.

Jeffrey Forsyth, CEO of nFluids Inc., poses for a photo at the company’s laboratory in this file image from 2016. (Jeff Mcintosh/Canadian Press)

He’s been with nFluids ever since. The Calgary-based company develops industrial products based on nanoparticle technology that can be used in oil and gas drilling and exploration, as well as other applications.

Of course, not everyone can be a unicorn. And Forsyth knows a lot of people — colleagues and friends — who have struggled to find good work after a layoff in oil and gas.

“Some are definitely still unemployed,” he said.

“I think the hardest hit, in my opinion, were the younger engineers. You know, people that were just starting families and maybe hadn’t been on that gravy train with the high bonuses for a long period of time in the early parts of their careers.”

Jobs for engineers, geophysicists, and other positions that were in high-demand when companies were doing more exploration have largely dried up, he said, and many people who used to work in those fields have moved outside of Alberta in search of new opportunities.

Gara, of course, is an exception.

‘It almost comes down to who you know’

As a geophysicist who was laid off and then rehired with a new company, he counts his lucky stars.

“I really do love geophysics and I’m really happy to be in that industry,” Gara said.

He said it had a lot to do with being in the right place at the right time — and knowing the right people. 

“It almost comes down to who you know,” he said.

“And I hate to say that because it sounds very, very discouraging. But, yeah, for myself, I just have to say, I kind of got lucky by knowing somebody who offered me a job. And I’ve heard of a lot of that happening.”

Even in the past, not many people who were laid off from oil and gas jobs found work in the industry again within a year. Only about one in five managed this feat from 2005 to 2015, according to the Statistics Canada study.

Since 2015, it’s only gotten harder.

“Now, when people are being hired back, the skill requirements have changed, and that’s really being driven by the innovation in the technology that the industry is implementing,” said Howes, with PetroLMI.

“The expectations of workers who are looking at returning to the industry is that they might have to upskill or acquire new skills to be able to to meet the requirements of the new jobs.”

For many former oil workers, Howes said, it’s more feasible to look to other industries where some of their existing skills can transfer. She highlighted petrochemicals, agriculture, logistics and supply-chain management as a few examples.

To that end, PetroLMI provides online resources to see how oil and gas skills compare with other industries, as well as webinars for those looking to make a transition.

It’s easier said than done, of course, but Howes says those who are able to shift their skill set to a new type of work often have a few things in common.

Carol Howes with PetroLMI, which studies the oil and gas industry’s labour market, says the types of jobs that existed in the past won’t exist in the same numbers in the future. (Robson Fletcher/CBC)

“It’s really that agility, that versatility, that resilience, where they also view it as an opportunity,” she said. “And that’s a mindset. But it’s hard to do that when you’ve been laid off.”

As someone who shifted to a new industry and then came back to oil and gas, Gara agrees: it’s not easy, whichever way you slice it. And he’s seen others struggle to navigate this new reality, which looks so unlike what many had become accustomed to.

“My parents had been in oil and gas since 1976, so it was always kind of a staple for our family,” he said.

“There are people I know who have been looking for oil and gas jobs for three or four years now, and they’re just not coming up,” he added.

“It’s really, really hard.”

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