de Vries – COO Energy, Brunel – Netherlands
Brunel’s global COO and head of the company’s energy business discusses the move from transaction to services in the staffing sector, and what can help to change the network-based oil and gas mindset when it comes to recruiting from the younger generations.
Brunel’s business runs in a certain way when the oil price is rising steadily and new projects are being announced weekly, and the oil and gas workforce expands along with them. I suppose this changes in the face of a low oil price that may remain that way for a period of years rather than months. What happens at Brunel in situations like this?
Thanks to today’s lower oil price, there is a lot of attention focused on cost saving, but perhaps this is the right time for it to happen: the levels of expansion that took place in the last five years were unprecedented, and the demand for specialists was so high in many areas that companies were happy just to have the staff for the projects they were planning, without having the time to worry about efficient processes. Now is a great time to review what happened during that last period and improve efficiencies, based on the idea of saving costs for clients. This is a great opportunity for us: we get to talk to our clients, build better relationships with them, and partner with them to help them realize those savings.
In the end though, these cost-saving discussions all come down to the quality of your offering: there is still a scarcity of the right specialists, and so what we can offer to the industry is still massively important: 30 years of experience, a global network, and a will to move from transaction to service relationships. Traditionally, oil and gas companies have approached hiring in a very reactive way: they need specialists and work with companies to hire them. We at Brunel want to think about this more proactively: find out what’s happening on our clients’ projects, find out what kind of resources they will need in the longer term, and find better solutions. This also ties in nicely with compliance and project financing issues, making the move from transaction to service a win-win for our clients.
In Q3 2014, Brunel’s oil and gas projects division grew at a rate of 12 percent. What does this mean for the strategy you just outlined?
Projects are a very good example of how Brunel’s move to services can work: with our customers ExxonMobil, Shell and Chevron, among others, we can act as a single supplier for specific projects: we tender for projects, completely source the staff for them, and act as the party responsible for logistics, travel and supply of engineering talent: because there is a good volume, we can offer a competitive price. Companies in the oil and gas industry are starting to see this as an interesting model. Back then there was so much scarcity, companies would use every agency they could, in tandem, to try to get all the people they needed for projects. In today’s context, companies are moving away from this model and selecting two or three key suppliers.
What do you see as the larger market trends governing the oil and gas industry’s recruitment strategies, apart from the move from transaction to service?
Another big trend is saving costs through more local content: expats can be very expensive, and increasingly, markets have their own local content regulations. In order to meet this challenge, we work through our 40 international branches to attract local content. This is possible in more and more countries each year, thanks to improving education and globalization. But we also work to train and provide education to local specialists through partner organizations.
How far down the value chain does the Brunel model apply? Is there a moment where Brunel specialists become Brunel employees? Is that something you want to aim for?
We don’t want to become responsible for the work product or turn into a EPC comapny, but other than that, I think it can go quite far. In the Netherlands, for example, we typically directly employ around 60 to 70 percent of our specialists, because of local labor laws but also as part of our country strategy: we believe that if we attract the right talent with the right package and our ambitions match – to be flexible, work on a project basis – then there is no barrier to employing them directly. We also see possibilities in the oil and gas industry, when it comes to employing people locally – we are not afraid to take risks like this. Working in this manner is typically Dutch: to spend five to ten years working on this basis, before moving to a permanent job with one of the clients you have worked for.
How much of a culture shift would be required to implement this way of working in the oil and gas sector?
A culture shift would definitely be needed in the oil and gas industry, but it needs one anyway: the experienced engineers that oil and gas companies prefer are retiring week by week, but are still being favored over younger talent. Companies need to invest time in the younger generations, to avoid a huge experience gap in the years to come.
Will this issue ever be solved?
I think that as with many problems, companies first need to feel the pain before they change, and they have not reached maximum pain levels. We have been discussing this issue for more than five years now, and still nothing has changed. As well as inertia, there is the fact that the oil and gas industry is really network-based: people like to work with their peers. But I believe that local content requirements will help to solve this issue to a certain extent, with training and development focused on reaching these targets around the world.
To what extent is the Netherlands a representative market for Brunel in oil and gas?
The Netherlands is of more a representative market for the way Brunel works and demonstrates its entrepreneurial edge. The staffing industry in the Netherlands is very advanced in global terms: companies want to arrange their staffing proactively, which leads to very good relationships with our clients at the highest level.
This is something we would love to introduce to our global oil and gas partners, but again, this is something that will require time and a shift of culture. If you wait until the final moment to reach out to the market for the resources you need, you will still find people that match the profiles you require, but they will not necessarily be as good as if you had been looking for people for three months previously, and will also be more expensive. Although we still need to get this mindset accepted in the world of oil and gas, when it comes to finance and engineering in the Netherlands, we share our pipeline of candidates with clients, who pick them based on their upcoming projects.
How does the Netherlands compare to other North Sea oil and gas markets for Brunel?
In Holland, Brunel’s work in the oil and gas industry is mainly focused on working with Shell in the upstream, Allseas and Heerema in the offshore market, but overall, Brunel also has a downstream and engineering focus. In the North Sea, Norway is our main market, thanks to a series of contracts with Statoil. It’s a slow market today, but we are very patient and continue to expect good things from Norway. The UK is a very competitive market for staffing companies, with very low margins, but you need to be present there despite this. In fact, two weeks ago, we opened a new branch of Brunel in Aberdeen.
You are the global COO of Brunel, but you have an energy role: how are the two sides of your job related?
I am the chief operating officer of the company, but most of this work is focused on the energy industry, while Brunel’s CEO focuses on the European business, so the two sides combine very easily. I moved to energy six years ago, after 12 years working on the Europe side.
What does your working week look like?
It’s typically one week in the Netherlands followed by one week abroad. When I’m here, I’m either in the Rotterdam office, or Brunel’s headquarters in Amsterdam. I travel as much as possible, because I am a strong believer in the benefit of meeting people face-to-face, both clients and employees. As a company based in so many locations, our work is based on trust, and having the right resources. I travel to give direction, motivate, and learn what support our branches need: to do my job, I need to understand what is going on in the markets where we work.
I also spend a lot of time working on ways to link our global network. While every country manager knows their part of the world intimately, we can generate value for our clients by offering services that cross boundaries, and one of my priorities is to find new ways to do that.
The potential for diversification in our business is currently occupying a large part of my time. Now we have time, we are speaking to companies outside the world of oil and gas, to see how the network we have established over the years can be used to help new industries. We can also offer these companies services outside of staffing: we can help them establish and run branches in new countries, using our knowledge and networks to mutual advantage. There is so much more that we can do with Brunel as a vehicle, for new clients and with new services.
Although we are a listed company, which helps us to be compliant, transparent and financially powerful, 60 percent of the company’s shares are in the hands of the primary shareholder. I like to think that this makes us a stock-listed, family-owned company: the best of both worlds. We can be really entrepreneurial here: we have our responsibility to the stock market but we can also develop long-term strategies that we believe in.
How is the Volvo Ocean Race helping to move Brunel’s energy branch forward, and how can it help improve perceptions of Brunel in the oil and gas industry?
This year is the third time we Brunel is part of the Volvo Ocean Race. It is in part related to our CEO’s enthusiasm for sailing, but it extends beyond this, because it helps us to brand Brunel in an incredible way: it’s unbelievable how many people, especially in the higher levels of companies, know this race and follow it each year. The fact that the race is global also links well to our company: we organize different events with our clients, make them part of it, and the good thing about sailing is there are so many metaphors you can use in business as well. It’s about strategy, teamwork, and being a winner.