LinkedIn’s latest Workforce Report for the US spotlights a phenomenon that’s shaking up the labor market in and around Texas, the nerve center of the American oil industry, where hiring has spiked in tandem with oil prices. Energy industry hiring rose 5.2 percent in the year to May 2018, compared to an average of 4.5 percent across all industries nationwide, LinkedIn found. Job growth has closely tracked the price of oil, with a dip in 2015-2016 followed by a boom as prices have risen steadily over the past two years. Hiring in Houston, the energy industry’s home base, grew 12.4 percent year-over-year, contributing to a reduction in the surplus of petroleum engineering, energy, and geology skills.
The energy industry is particularly sensitive to boom-bust cycles, and, so are cities like Odessa and Midland in west Texas, where the local economy is dominated by a single industry (in this case, oil), the report notes. In the current boom cycle, the migration of workers to the Odessa-Midland area is further tightening labor markets in Houston and other Texas cities:
With oil prices on the rise, talent inflows to this oil boom-town have picked up, particularly from the three largest Texas cities—Houston, Dallas, and Austin. Net movements to Odessa-Midland from these cities have grown significantly since September 2017, to 0.34 per 10,000 from Dallas (750%), 1.05 per 10,000 from Houston (44%), and 1.03 from Austin (255%). This impact can also be felt in the housing market—a recent report found that Odessa-Midland had the highest national rent increase in 2017, up 35.7% year-over-year.
Driving this boom is the rapid expansion of shale oil extraction in the Permian Basin, west Texas’s oil and natural gas producing region. High oil prices combined with advances in extraction technology have made shale extraction increasingly profitable, meaning oil companies have the incentive and the resources to lure talent with high pay. That’s great news for anyone working on an oil rig, but ancillary workers like truck drivers are also seeing huge signing bonuses and pay hikes, the Wall Street Journal reports, with some truckers in the Permian Basin earning over $100,000 a year, double the national average for long-haul truckers.
In one of the worst natural disasters in US history, Hurricane Harvey has dumped more than 11 trillion gallons of rain on the Houston metro area and other parts of southeast Texas, leading to catastrophic flooding throughout the region. While the city of Houston was not ordered to evacuate, most organizations in the city, including major employers like NASA’s Johnson Space Center, ConocoPhillips, and Waste Management, Inc., were closed on Monday and instructed employees to stay home, according to the Wall Street Journal. Some encouraged employees who were safe to work remotely from home. Many local businesses and national firms with a presence in the region, including major retail chains like Target and Walmart have closed their stores in the area and are participating in relief efforts by donating money or emergency supplies.
For organizations whose employees are affected by the hurricane, the first priority in the coming days and weeks is to communicate with employees about the status of their workplaces and projects, as well as benefits and resources available to them, as Amanda Eisenberg highlights at Employee Benefit News:
“The most important thing to communicate is what the employers are doing for the employees and the community,” says LuAnn Heinen, vice president of the National Business Group on Health. “First of all, that help is on the way.”
Employers also are going to have to be flexible, she says. Employees need to know if they are expected to come into the workplace, and if they can’t, whether they can work remotely. Schools are likely to be closed, and relatives might have been relocated from nursing homes or hospitals to shelters. Employees might need access to childcare or eldercare, and companies should be in constant communication to relay those benefits, Heinen explains.
In an open letter sent to Texas Governor Greg Abbott on Monday, 55 Houston-area business leaders urged the governor to reconsider his support for the “bathroom bill” currently being considered in the state legislature, which would require transgender people to use restrooms in public buildings, including public schools, corresponding to the sex listed on their birth certificates rather than their expressed gender.
The signatories to the letter represent businesses belonging to the Greater Houston Partnership, an economic development group serving Texas’s second-largest metropolitan area, and include presidents, CEOs, regional managers, and other senior executives at companies such as Accenture, Chevron, ConocoPhillips, Dow Chemical, Ernst & Young, ExxonMobil, Shell, and Siemens. In the letter, the business leaders state succinctly that they “support diversity and inclusion, and… believe that any such bill risks harming Texas’ reputation and impacting the state’s economic growth and ability to create new jobs”:
Innovative companies are driven by their people, and winning the talent recruitment battle is key. Any bill that harms our ability to attract top talent to Houston will inhibit our growth and continued success – and ultimately the success of our great state. We appreciate your leadership in Texas and urge you avoid any actions, including the passage of any “bathroom bill,” that would threaten our continued growth.