This Ain t Your Daddy s Oilfield Culture and Safety Change In the Patch Pete Flatten, CSP. Director EHS Gradiant Energy Services

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1 This Ain t Your Daddy s Oilfield Culture and Safety Change In the Patch Pete Flatten, CSP Director EHS Gradiant Energy Services

2 Remember the good ol days??

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6 Where Did The Old Oilfield Culture Come From? Prior to the 80 s the U.S. onshore industry was dominated by the majors With the crash the majors basically sold off U.S. assets and competence went with them Many jobs were contracted out, and with it the liability (!?) In the late 80 s incidents caused by contractors led to rethinking

7 Deaths per 100,000 workers Number and Rate of Fatal Work Injuries U.S. Oil & Gas Extraction Industry, Fatalities Number of Deaths Note: Fatality counts from BLS Census of Fatal Occupational Injuries. Worker Estimates from BLS Quarterly Census of Employment and Wages. Rate per 100,000 workers per year. Includes NAICS 211, , N=1,485

8 Rate of Fatal Work Injuries and U.S. Rotary Rig Count, ,500 Rate per 100,000 workers Fatality Rate5 Rotary Rig Count6 2,000 1,500 1, Rotary Rig Count Note: Fatality counts from BLS Census of Fatal Occupational Injuries. Worker Estimates from BLS Quarterly Census of Employment and Wages (2013). Rate per 100,000 workers per year. Includes NAICS 211, , Rotary Rig Count from Baker Hughes Rig Count.

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10 What Are The Big Reasons For Our Safety Success Over the Past 20 Years? OSHA s TRIR Contractor Management Drug and Alcohol Testing Training Automation JSA s BBS

11 Some Next Steps for Safety Success Changing the incident investigation focus 20 years ago: Lack of response Today: Over response Tomorrow: Proportional response There is a strong business case for safety, can you make it? Operators vet their contractors Do contractors vet their clients? Work on preparing for the next worker shortage

12 Will Your Future Workers Be Prepared For The Job? Over the next decade, only 30% of US 20 year/old's will obtain a college degree, but 2/3 s of new jobs will require a college degree Key skill sets will be in critically short supply: # students that declared their major in computer science has declined for past 4 years now 39% lower than in 2000 Other shortages: engineering, physical & biological sciences A growing number of high school dropouts Fewer high school graduates with vocational training Labor imports decreasing due to security restrictions and opportunities in rapidly developing countries Source: In part, The Seventh-Annual Workplace Report, Challenges Facing the American Workplace, Summary of Findings, Employment Policy Foundation, 2002; India Daily, October 12, 2005, citing McKinsey & Co. Research; Computing Research Association, March 2005; Information Week, August 16, 2004; Holding on to Global Talent: Foreign-born stars are heading home. How to keep them working for you by Anne Fisher, Fortune Magazine, October 19, Organization for Economic Co-operation and Development

13 2005 A Fairly Young World Percent 28.0 or more 21.0 to to to 13.9 Less than 7.0 World percent 2015: : 16.7 Sources: U.S. Census Bureau, 2013, 2014; International Data Base, U.S. population projections.

14 Getting Much Older by 2025! Percent 28.0 or more 21.0 to to to 13.9 Less than 7.0 World percent 2015: : 16.7 Sources: U.S. Census Bureau, 2013, 2014; International Data Base, U.S. population projections.

15 Today Who Are We Hiring? What skill level, sense of self esteem, and work ethic do most workers posses when they come to the job?

16 Consider Average age of new hire: 19 23? ~50% of marriages end in divorce ~80% of the time the children go with Mom* Socio economic level of the family falls Dad sees child for 4 8 hours every 2 weeks (or less) *Census Bureau 2013

17 Consider The average child spends an estimated 1 hour per day or less with Dad Between birth and 18 years, the average child watches 18,000 hours of TV Do males suffer from a lack of a significant male role model?

18 Consider CONFIDENCE Self esteem (sense of OKness) is determined on an unconscious level by age 5 COMPETENCE Skill level and work ethic are often limited

19 Another Way to Look At It A high school of 1,000 students 25% make up sports teams, clubs, organizations leaving % of the 750 have a job outside of school leaving 563 Where do they learn to be a WINNER? Where did they develop their WORK ETHIC? Where were they trained to care for EQUIPMENT?

20 So what skill level, sense of self esteem, and work ethic do they possess when they come to the job?

21 A Different Workforce For the first time we have 5 generations working side by side Traditionalists ( ) Baby Boomers ( ) Generation X ( ) Generation Y (Millennials) ( ) TBD (2004?)

22 Consider We ve discussed where our culture came from is it any wonder we re struggling with the generations? Each generation has its own value system, beliefs, attitudes, and work ethics do you understand them?

23 TRADITIONALISTS BABYBOOMERS GENERATION X MILLENNIALS COMMUNICATION -Face to Face -Formal Memo -In Person -Formal Memo - -Cell Phone -Text Messaging FEEDBACK No News is Good News! Once a year review with documentation Instant, Immediate feedback Individualized Feedback at the push of a button! REWARDS The satisfaction of a job well done Money, title, the corner office Freedom is the ultimate response Work that has meaning for me! BALANCE Balance? What balance? Help me balance everyone else & find meaning myself Balance now, not at 60! Flexibility so I can balance all my activities MOTIVATION Your experience is respected. You are valued. You are needed. Do it your way. Forget the rules. You will work with other creative/bright people.

24 Does This Impact Anything? Leadership Dealing with change Building teams Recruiting and retention Maintaining and increasing productivity Motivation

25 Why Are They Working For You? What is a typical workers true motivation for working? 74% of mature workers cite the need of a paycheck for staying at their job 60% cite the need for medical benefits What is it going to take to get them to stay? Source: Conference Board Study

26 Considering What We Know About Today's Workforce We must be adaptable to the various situations and people (generations) we work with We must keep a focus on improving safety Engagement is key as operations becomes more automated Our next worker problem is just around the corner

27 Growth in the Working Age Population 200% % 100% 50% 0% -50% Mexico Brazil India China South Korea Australia Canada US Netherlands Spain France UK Russia Italy Japan Germany Source: Deloitte Research/UN Population Division ( It s 2008: Do You Know Where Your Talent Is? Why Acquisition and Retention Strategies Don t Work, p.6

28 Millions of People Expected Labor Force and Labor Demand Labor Needed Labor Available Source: Employment Policy Foundation analysis and projections of Census/BLS and BEA data.

29 Takeaways Each generation says the same thing about the other They just don t get it They have it so much easier than we did Appreciate and understand where we ve come from and where we re headed We must understand the basic generational differences in order to help motivate employees to 1)work for us, and 2)stay with us