The financial pressures caused by the low oil price has led to a significant increase in the number of job losses in the industry, at all levels in the contractual chain. Employment Partner, Heidi Watson, outlines her top 'legal tips' for managing your workforce in an unfamiliar environment.
Global oil price volatility survey - employment findings
Nine out of ten (92%) of those we surveyed said the slump in oil prices has affected the majority or the entirety of their business, and expectations of any significant price increase are muted.
Inevitably, for many businesses this means continued cost-cutting: reducing workforce numbers and cancelling or shelving projects as they look to become leaner and more efficient.
If, however, prices do rebound, what then? Making too many cuts may in turn create new problems, leaving some businesses facing skills shortages and capacity constraints which could severely curtail their ability to capitalise on the recovery.
Impact on business
Two-thirds (67%) of our survey respondents think that reducing headcount will be the most significant change in their businesses’ day-to-day operations over the next 12 months, as evidenced by recent announcements. Cancelling or putting on hold new projects is next on the list (55%), and existing projects are also at risk (41% think they will be frozen or cancelled). Half (50%) say there will be a change in their business processes to increase efficiency.
Changing business structures provide an excellent opportunity for businesses to address both employment issues and regulatory requirements, or changes which will be a priority for global businesses in the future. Focussing on the UK market for example, from April 2017 UK law will require gender pay reporting by larger companies (with 250+ employees) which will involve companies taking a snapshot of their gender pay statistics and reporting on this on a yearly basis. The restructuring process is a good time to audit pay practices and identify steps to redress.
To watch the previous video in the series, click here.