For years, the oil and gas industry has warned of the “great crew change” as a generation of talent prepared to retire. In the face of projected talent shortages, salaries skyrocketed and talent poaching intensified. But, falling oil prices and mounting cost pressures over the past year have changed that conversation significantly. Instead of dealing with a petro-technical talent shortage, many oil and gas companies are now juggling a surplus of labor.

Compounding the issue is the fact that many existing human resource management systems are outdated and contain inconsistent and incomplete reporting on skills, job histories, and performance data. That makes it hard for managers to make an objective portfolio assessment of employee performance as well as their talent needs to see where they can reduce labor costs. In the absence of a robust, data-driven process to inform decisions, many oil and gas operators end up relying on blunt tools, such as across-the-board cuts, when they need to reduce headcount. These are quick to execute but can feel arbitrary and dehumanizing to employees and they often forfeit operating flexibility and momentum when oil prices eventually recover.

At the same time, some companies are seeking opportunities to high-grade their workforce, retaining and rewarding their best employees while also taking advantage of the current availability of talent to recruit externally to replace under-performers. The oil price fall is just one such event that has triggered the move to high-grade talent—other company-changing events such as mergers can also act as a trigger.

A rapid individual performance management system can both help oil and gas companies fairly and transparently address their near-term workforce needs while laying the groundwork for a more sustainable performance management system in the future. Through a combination of organizational forecasts, data mining, fact-based review, and transparent communication companies can make the most of a difficult situation and build a stronger organization.

By retaining the right talent and removing under-performers, oil and gas companies can significantly improve financial and operational performance. Research across industries has demonstrated that in high complexity jobs—like technical roles in oil and gas companies—high performers are 8 times as productive as average performers. Properly applied, a rapid individual performance management system can help oil and gas companies retain and reward their top performers even in the midst of industry-wide cuts.