Global salary guide for oil & gas industry

The Oil & Gas Global Salary Guide 2011 comes after a long period of economic downturn

 


What does it reveal? Matt Underhill, managing director of Hays, one of the companies that partnered to produce the enormous survey, tells Vaughan O’Grady more about the figures and how they were collated.

Salaries and recruiting trends in oil and gas have long been talking points among industry professionals. However, they have rarely had detailed survey figures to refer to — so the Oil & Gas Global Salary Guide 2011, the second such survey from recruiting company Hays and job site Oil and Gas Job Search, will no doubt be welcome.
Surprisingly, this survey may be the biggest of its kind. However, as Matt Underhill, managing director of Hays Oil and Gas, tells ORA, “That was what we set out to achieve: we decided we wanted to create a survey that covered all corners of the world in oil and gas and compared countries with some level of experience. We also picked out the key disciplines within the oil and gas industries to compare those as well.”


And the results of the survey (available for free download at www.hays.co.uk and www.oilandgasjobsearch.com) are often fascinating. The overall annual salary average is US$75,813 — barely changed from last year. However, a closer look indicates that the recession has clearly affected oil and gas pay, but not all pay and not for the same amount of time.


There was an apparent fall in permanent salaries in the period covered by the survey (the figures were collated between September and October of 2010), for example. However, permanent salary trends tend to lag the economic state of the industry. In particular the effect of repatriating higher paid senior expat staff (“commonplace through any downturn” as the survey points out) is not quickly reversed. Contract staff, meanwhile, whose pay responds quicker to market forces, enjoyed the benefits of the economic upturn sooner.


Among many findings that may be seen as encouraging, especially to industry employees who are readers of ORA, are the impression of a growing importance of benefits and bonuses in company thinking and a positive feeling from respondents about economic outlook and staffing levels (although women and those under 25 are still underrepresented).


In addition, despite the continuing dominance of the Middle East, which will be a key focus for half the respondents over the next 12 months, Africa also makes a strong showing in future planning.
In many cases the survey tells us a lot we already suspect but adds real-world figures, figures that can often be surprising, even for an experienced industry observer like Underhill himself. Take the topic of tenure. Looking at the number of people in their job for less than a year between 2009 and 2010, he says, “There was an increase in the number of job movers that had less than one year’s tenure by about 8-9 per cent.


So it went from about 16 per cent to about 24-25 per cent. There was a huge flood of people moving jobs from September 2009 to September 2010 — and that was largely the wave of people moving post-recession. A quarter of the market that responded to us have moved jobs in the last year.”


Need for new blood


Another regular talking point is the need for new blood. Here the survey is equally revealing.


“Anyone with less than four years’ experience and less than one year’s tenure in their current role we classed as a newcomer to the industry,” explains Underhill. “We found that the figure [for these newcomers] went down from near to eight per cent in 2009 to about five per cent in 2010 — a massive drop-off in newcomers into the industry.


People just stopped hiring anyone new.


Graduate programmes were cut and there just wasn’t anyone new coming in. Now some 18 months on from that first set of figures in 2009 we’re faced with big skill shortages and a fairly hot market and it seems somewhat shortsighted.”


And women? “Clearly there are not enough and there’s a whole pool of potential candidates that this industry is missing out on.” In fact, Hays itself is actively addressing this issue. “A lot of our clients are very focused on getting more women into industry and we do quite a lot of campaigns where we’re specifically focused on hiring women into specific jobs.”


As well as diversity and experience, movement of workforce, the mix of permanent, part-time and contract, which countries’ oil and gas sectors rode the recession better or worse and, of course, various salary trends, are among the many other areas covered in the survey.


So what was the methodology behind this vast undertaking? The two companies used an online survey tool to poll some 400,000 candidates or professionals working in the oil and gas industry. “That’s essentially why we teamed up,” says Underhill. “Oil and Gas Job Search has one of the largest databases of individuals in the industry and we have the expertise in compiling such surveys.


“We’ve been doing this for a variety of different industries around the world [but] this is the first time we’ve attempted to do something global, and hence why we’ve got hold of a partner to try and achieve the scale that we needed. Instead of trying to base a global salary survey on a few hundred responses, it’s got to be thousands.” In this case the respondent numbers came close to 11,000. That’s how you achieve the numbers. How do you work out what you want to ask your repondents? “You’ve got to start with the headline goal you’re trying to achieve,” says Underhill. “We know that keeping it simple, not trying to get too much information about peoples’ salaries or benefits packages, is what we’re trying to achieve; we’re trying to get a headline figure from people. We are then interested in trends in the industry and people’s opinions about where the industry is going.


That’s what we’ve done with the survey.” The results, if the survey itself is carried out correctly, can then be genuinely useful and informative. And that’s what Underhill feels has been the   outcome. “The headline goals are the figures, obviously, but there’s a whole raft of information we’ve been able to present on where the industry is heading and how people are remunerated, what people are intending on doing, what their expectations are and forecasts for the industry in terms of staffing.”


Expect the Oil & Gas Global Salary Guide to be a fixture for the foreseeable future then, especially now that, after two years, the format is clearly defined. It’s unlikely now to need more than the occasional adjustment to reflect growing or declining territories or trends. It could be made more detailed, some might argue, but, as Underhill points out, “There’s always a trade-off: the more questions you ask people the less people can be bothered to contribute. So while we’d love to get as much detail as we can we have to be mindful that the numbers of responses are also very important.”
Not surprisingly, the interest in the second survey of its type from the two companies has been enormous. “Last year we had downloads of something approaching 30-35,000 collectively from both our own site and Oil and Gas Job Search; this year we’re hoping to double that,” Underhill says.


“Certainly the response so far implies that the two companies are on to something. “I don’t think people are ignorant of what people are getting paid,” he suggests, “but I don’t think there are many studies around that compare different countries.” And of course, as the survey moves into its third year and beyond, it means trends can be compared over ever longer time frames.


Trends a key concern


And trends are the key concern; this is categorically not a guide to designing a remuneration package, says Underhill. Still, it will no doubt be closely studied by those who do need to know about pay — including Hays itself. As Underhill says, “We’re quoting salaries as we’ve discovered them throughout our survey. It’s not opinions; it’s not subjective.


They are actual figures. We know for instance that salaries have increased in places like Australia, Russia, and a lot of the Far East countries. And we know therefore when we’re talking to clients that we can help them set their expectation on what they’re going to need to pay.”


But things move fast in this industry. For example, according to the survey, permanent salaries in the Middle East dropped where others rose — albeit mainly due to payroll headcount falls as highly paid staff left. Six months to a year on, figures indicate an upturn in the Middle East. The fast-changing nature of the industry is just one reason why all eyes will no doubt be on the trends of this and next year when the 2012 survey appears, especially given the likely greater response level.


“We were up 57 per cent this year on the year before,” says Underhill, “and I’ll never commit to any figure — but I’d be disappointed if we don’t get the same sort of increase in the following year.”

Alain Charles Publishing, University House, 11-13 Lower Grosvenor Place, London, SW1W 0EX, UK
T: +44 20 7834 7676, F: +44 20 7973 0076, W: www.alaincharles.com

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