Oil and Gas Companies Should Double Down on Employee Safety and Retention

Oil and gas executives are grappling with the most challenging business environment in recent memory. With the plunge in oil prices and diminished cash flows, some exploration and production companies are limiting capital expenditures and reducing payroll, as they prepare for what could be a sustained downturn. While such course corrections are necessary to protect the bottom line, reducing a company’s commitment to safety and the well-being of its workforce should not become an unintended consequence. Prudent safety practices and talent retention efforts can go a long way toward easing the blow of challenging conditions.

Balancing Efficiency and Safety

The austere climate in the oil and gas industry will require companies to do more with less as they struggle to balance operational efficiency and worker safety. Even when expenditures are constrained, it is vital that executives keep in mind how hazardous the industry can be, and continue to prioritize employee safety.

The sharp increase in automation in oil and gas exploration and production also affects safety standards. Automated processes have helped reduce workers’ exposure to injury, but the inherent dangers of working in this business persist. Improvements in technology have created a new type of threat – complacency. Companies occasionally confuse a reduction in risk with immunity to risk and, as a result, may fail to monitor safety processes as closely as they should. Better technology cannot fully eliminate safety risks, whatever the economic conditions.

For these reasons, companies must remain diligent and should proactively pursue good safety practices. One low-intensity but high-yield option is to send more employees to safety education and training programs. As one of the leading insurers in the oil and gas industry, Travelers offers free programming in these areas. Tools like these can go a long way toward increasing awareness about safety and emphasizing its importance.

A Culture of Safety

Companies should aim to establish a ‘safety culture’ that promotes best-in-class safety practices during times of both feast and famine. Managers must demonstrate they are fully prepared to take ownership of communicating safety standards and guidelines to employees, and set a clear expectation that everyone be equally mindful of safety in the workplace. They should also take the time to assess potential risks that exist on the job, and create solutions to problems they identify.

Oil and gas companies can foster a healthy safety culture by planning ahead. Rather than just reacting when issues arise, companies should look at what risks exist and prepare for possible scenarios. This may be the best investment executives can make in the well-being of their staff. Preventive measures are essential tools for improving safety standards on a constricted budget. Any incidents that arise will almost certainly be far more costly than the actions that could have prevented a potential disaster.

Human Capital

Of course, spending time and money training employees and instilling a culture of safety makes no difference if a company can’t retain those employees. As the familiar adage goes, people are a company’s greatest asset. Retaining talent is therefore the key to achieving the highest value for your company. This industry, in particular, has struggled to find – and keep – skilled workers. Too often, valuable employees hop between competing companies, lured away by attractive wages. For this reason, it is important that management teams do not over-commit to physical assets at the expense of human assets.

There is no doubt that tough decisions will need to be made as costs may need to be cut. Yet companies should make every effort to develop and retain their best talent. Employee retention is one of the best ways to preserve and enhance productivity, efficiency, and safety – all at the same time.

When forced to make the tough calls – like deciding where to cut costs and figuring out how to make sound business decisions – it helps to have access to as much good advice as possible. Working with a skilled insurance agent and carrier that specializes in the oil and gas industry and understands how changing cycles affect business operations can greatly support a company’s efforts to maintain strong operations in the face of financial challenges. After all, the more informed a company is, the better decisions it will make.