This month’s Global Talent Update looks at coverage of the workforce challenges facing the EMEA oil and gas industry; the critical need for more foreign workers in Japan; and the potential construction of a Tesla plant in Mexico.
There are simply not enough young people entering the oil and gas workforce in recent times, according to Neil Bradshaw, EMEA Head of Permanent Recruitment at Petroplan, adding that “it’s set to be a real potential challenge in upcoming years for companies within a global industry that has traditionally experienced challenges with skills shortages.” He cited a recent study, in which 58 percent of Millennials questioned said that they would avoid working in a particular sector solely because they believe it had a negative image, with oil and gas being regarded as the most unappealing globally.
Over the past five years, it is reported that the number of Petroleum Engineering graduates has dropped by 83 percent. In addition, the University of Calgary and Imperial College London both eliminated their oil and gas engineering majors last year. Three British Universities recently placed a ban on oil companies attending their recruitment events, which further hampers the ability of oil and gas companies to promote their space to the younger generation of candidates.
Japan needs about four times more foreign workers by 2040 to achieve the growth path the government has outlined in its economic forecast. The findings highlight Japan’s growing reliance on migrant labour to make up for a shrinking population, while its ability to attract overseas talent has been thrown into question by strict COVID-19 border controls that have shut out students and workers.
Japan must boost the number of foreign workers to 6.74 million to sustain average annual economic growth of 1.24%, based on a bullish “high-growth” scenario the government has set out in its long-term projection. The figure would be nearly 300% more than the current 1.72 million foreign workers, who make up about 2.5% of the workforce.
About half of Japan’s foreign workers come from Vietnam and China, but the number of immigrants from lower-income countries such as Cambodia and Myanmar is expected to rise quickly in the next two decades. The supply of migrant labour, however, will constantly fall short of demand under the current immigration system unless Japan considers more long-term visas.
Mexican President Andres Manuel Lopez Obrador announced that the electric car manufacturer Tesla will open a large plant in northern Mexico, marking an investment that could be worth up to $10bn for the region. Following a phone call with Tesla Chief Executive Elon Musk, Lopez Obrador revealed that the plant would be located in the industrial hub of Monterrey, the capital of the northeast state of Nuevo León.
The announcement is a reversal of course for Lopez Obrador, who had previously ruled out situating a Tesla plant in Nuevo León, citing water concerns. He said that Musk had been “very receptive” towards concerns about issues like water use in the parched region.
Mexico has pitched itself as an alternative to Asia for US-based companies looking to establish manufacturing operations, citing proximity as an advantage. Mexico is already home to one of the largest car manufacturing sectors in Latin America, second only to Brazil, hosting plants for US, European and Asian car companies.
The last year brought more foreign investment into the country than at any point in the last several years. The German manufacturer BMW announced earlier this month that it would invest about $870m to make electric cars in the Mexican state of San Luis Potosi.