Despite a push to accelerate the development and implementation of renewable energy sources, fossil fuels dominate the American energy market. According to the US Energy Information Administration, renewable and nuclear energy only accounted for 18% of the energy produced in 2023. The remaining 82% came from fossil fuels–petroleum, natural gas, and coal. With the US highly reliant on these fossil fuels, oil and gas companies play a critical component in the energy market. However, these companies could also benefit from a reliable HRO partner to streamline HR functions so HR departments can focus on core competencies instead of redundant administrative work. 

Factors Influencing Oil and Gas Production

In the United States, oil and gas production is often highly politicized. Depending on the current administration, policies could be more restrictive or supportive of oil drilling and pipeline creation. At the same, international relations are continually evolving, shifting dynamics within the industry. Let’s explore the impact that key factors have on companies operating in this space. 

  • Conflict in the Middle East: After the onset of the Israel-Hamas war, gas prices were cheaper than before the attack. Although there was a concern that violence would escalate in the Middle East and disrupt oil supplies, the stability of the oil market has been largely in part to American oil suppliers. As of 2023’s final quarter, the US was producing more oil than any country in history. Thus, oil and gas producers have been able to dampen the shocks of the Middle East conflict. 
  • Competition From Latin America: Another challenge facing oil producers is growing competition from Latin American countries like Brazil and Argentina. Brazil ranks as the eighth-largest oil-producing country in the world and is anticipated to produce 50% of the world’s offshore oil by 2040. 
  • US Politics: In recent news, President Biden issued two Presidential Memoranda designed to protect offshore areas along the Atlantic and Pacific coasts against offshore oil and gas drilling. According to the Associated Press, this action would likely be difficult for President Trump to reverse after his inauguration. However, Trump has expressed a desire to undo these memoranda and increase domestic oil and gas production. 
  • War in Russia and Embargos: The impact of Russia’s invasion of Ukraine and the following embargoes were felt across the world. Immediately following the invasion, the price of crude oil skyrocketed. Some regions, like the European Union, felt this particularly hard as a majority of its oil supplies came from Russia. At the same time, gas and energy pricing increased dramatically for US consumers. As a result, the Biden administration dug into the Strategic Petroleum Reserves to combat this price increase. In 2025, the US Energy Information Administration anticipates that domestic crude oil production will continue to increase in the year ahead. 
  • Fossil Fuels VS. Renewable Energy: Rather than seeing renewable energy as an adversary, some diversified oil and gas companies are embracing the potential of renewables. According to the Kleinman Center for Energy Policy at the University of Pennsylvania, some companies like BP and Shell have begun to invest in renewable resources believing it to be important to the companies’ future, building wind and solar businesses. Other companies like ExxonMobil and Chevron have been reluctant, citing their competitive advantages as being in oil and gas. 

How Oil and Gas Companies Can Leverage HR Outsourcing

Oil and gas companies should outsource their HR functions to an HRO to achieve greater efficiencies in their operations. For growing energy companies, especially those trying to navigate the complexities, uncertainties, and fluctuations of the oil and gas market, there are many business functions to juggle. From managing strategic initiatives to overseeing employees, it can be difficult to focus on strategic decisions when much of day-to-day operations are spent dealing with HR. 

Outsourcing HR functions, especially for a company with 75 to 6,000 employees, often is a great way to realize greater operational efficiency and get back to focusing on the core business priorities. Relying on an HRO can:

  • Control HR costs
  • Improve accuracy
  • Increase efficiency
  • Enhance compliance
  • Free up valuable time
  • Improve employee experiences

However, not all HROs are created equal. An HRO partner should understand the challenges uniquely facing the oil and gas industry. For example, an HRO should be able to help their oil and gas clients:

  1. Navigate the labor market and identify solutions to deal with slow hiring times
  2. Minimize the impact retiring employees will have on the company
  3. Address skills gaps that have arisen from new technologies in the industry
  4. Improve the employee experience to attract and retain great talent. 
  5. Diversify their workforce by recruiting female talent.

An experienced HRO should be able to identify these challenges and more, working with their client to overcome these obstacles. Fortunately, Corban OneSource has more than two decades of experience, making us well-equipped to address any HR challenge facing our oil and gas clients. Working with companies that have between 75 and 6,000 employees, our expert HR professionals are well-versed in compliance, benefits administration, payroll, and more.

If you’re ready to explore more reasons why outsourcing HR is a good idea for oil and gas companies, contact the team at Corban OneSource today.Â