This situation contrasts sharply with the employment situation just a few short years ago.  When the economy crashed in 2008, many oil and gas workers were asked to take a lower pay rate – or risk losing their jobs altogether.  Many of these workers are still being paid the same rate, even though the average worldwide pay for skilled workers in the energy industry has gone up 6.1% in the last year.

If you’re an experienced oil and gas professional, it’s time to ask, “Am I being paid enough?”  And, “Is my company a good fit for my goals and lifestyle?”  When you’re ready to answer those questions, keep the following information in mind.

Finding Your Fit

Even if you’re happy with your current salary, there might be a job out there that’s a better fit for your lifestyle – whether you need more time to spend with family, help going back to school, or just want to live closer to work.  Many oil and gas companies are offering extra incentives to keep their employees from being recruited by another company or headhunter.  While vacation time, healthcare plans, and travel allowances have become industry standards, many companies are going above and beyond, offering incentives like:

• Four or more weeks of vacation per year
• Stock options
• Educational assistance
• Wellness benefits, such as gym or spa memberships

Some companies have built offices closer to residential areas to offer a shorter commute.  One known company even has an incentive program that awards all qualifying employees a six-figure bonus if the company’s production rate and value doubles in the next four years.

Your Bargaining Power

Oil and gas companies across the industry are under pressure to solve staffing issues. (See the 2010 SBC Oil and Gas HR Benchmark figure below)  This situation provides a unique opportunity for experienced oil and gas personnel to ask for a few perks.

Evaluating Your Compensation

If you’re a seasoned professional in oil and gas, 2012 is a good time to bargain for a raise.  The Hays Oil and Gas Global Salary Guide 2011 reported that over half of respondents received a pay increase last year.  The biggest jumps in pay were rewarded to workers with 20 or more years of experience.

Before you ask for more money, you’ll need to know how your salary matches up against other workers in your area who have similar job titles and years of experience.  Plus, you’ll need to factor in the intangible benefits that your company adds to your wages.

A headhunter or staffing agency familiar with your industry can help you get an accurate picture of where your compensation stands in the current market.  Some headhunting companies will perform free evaluations for subject matter experts with a certain level of technical expertise.  Even if you’re not in the market for a new job, evaluating your compensation once a year is invaluable information to bring to a review with your employer.

Year of Opportunity

More than 60,000 oil and gas jobs were added in 2011, but as the baby boomers retire, the number of experienced professionals available to fill these jobs will sharply decline.  As a result, companies are offering extra incentives and higher pay to keep their seasoned employees, who are being heavily recruited by headhunters.  So if you’ve been thinking about asking for a raise – or finding a company with benefits that match your lifestyle – 2012 is the year to do it.

If you need help evaluating your overall compensation, contact Ron Nickelson at ron.nickelson@clovergs.com  and ask if you qualify for a free consultation.

But there’s one problem:  The low oil prices from the 1980s through the mid-1990s resulted in a low demand for engineers.  So, few petroleum engineers graduated during this time period – leaving most companies with a 15-year age gap in their workforce.  This situation is called the Great Crew Change, and it is causing two prominent issues:

• The baby boomers are retiring, and there are an insufficient number of experienced workers able to replace them on projects.
• Many companies fear that it will result in a sudden loss of tribal knowledge – no matter how hard they work to recruit new employees.

However, Ron Nickelson, Director Global Recruitment at Clover Global Solutions, LP in Houston, TX, says that the Great Crew Change isn’t as alarming as it sounds – companies just need to prepare by following these guidelines:

Transfer Tribal Knowledge

To sidestep the issues that come with the Great Crew Change, oil and gas companies must successfully transfer tribal knowledge from retiring workers to the younger generation.  Many oil and gas companies are establishing a strong mentorship program that matches new engineers with experienced workers.  Companies are also taking steps to ensure that tribal knowledge is available long after employees retire.  For example, Chevron requires that all written papers be scanned into a computer on a monthly basis for record-keeping and training purposes.

Keep Experienced Workers Involved in Projects

Oil and gas companies will still be affected by the mass retirement of the baby boomers – no matter how well they train the next generation.  An annuitant program can keep experienced employees involved with company projects.  Offer experienced workers an alternative to full retirement:  Many experienced workers will jump at the chance to become a contractor and work fewer hours instead of leaving altogether.  An annuitant program can also be offered to retired company alumni, who may be ready to start working again on a smaller scale.

Use Intangible Benefits to Attract In-Demand Candidates

The Great Crew Change has created a special situation:  Only 75-85% of industry jobs can be filled with the skill set of the existing workforce.  This means that companies have to work harder than ever to keep skilled contractors.  The highly experienced are already highly compensated in any oil and gas company – so competing for in-demand contractors means focusing on the intangible benefits that raise their quality of life instead of simply offering them more money.  For example, Marathon Oil offers four weeks of vacation and spa benefits.  Other companies might promise more interesting assignments, or recruit in a city where they can offer a shorter commute to work.

A Great Opportunity

The age gap in our industry presents a unique recruiting problem.  However, oil and gas companies can use it as an opportunity to train new talent and transfer tribal knowledge to an eager and younger generation.  They can reengage alumni who might return to work with a new enthusiasm, and experienced contractors can take advantage by finding a company that pays them well and offers benefits that change their quality of life.

How is your company preparing for the Great Crew Change?

To learn more about how Clover Global Solution services can help you meet your Direct Hire & Contract Workforce requirements, contact Ron Nickelson at ron.nickelson@clovergs.com

• Freelancers
• Independent Professionals
• Temporary Contract Workers
• Independent contractors
• Project-Based Workers
• Consultants

2. Contingent Workforce Management is the strategic approach to managing an organization’s contingent workforce in a way that it reduces the company’s cost in the management of contingent employees and mitigates the company’s risk in employing them.

3. There is near unanimous agreement among contingent staffing buyers that the use of Contingent Labor saves money – 92% reported so.*

4. On average over the last two years, the median estimated savings due to the use of contingent labor has been in the range of 9%-14% across almost all categories of buyers grouped by skills purchased, industry and company size.*

5. The average large company has 12% of its’ Workforce as Contingent Workers.*

6. A Master Service Provider (MSP) tends to be the most popular primary Contingent Management Model across Buyer categories. (*Staffing Industry Analyst)

7. Since the global recession began, companies cut back substantially on the use of Contingent Labor, however as the economy has improved, companies are now re-evaluating their staffing strategies seeking to have a more formal, optimized program in place for the use of the Contingent Workforce.**

8. Mergers and Acquisitions have forced companies to look for ways to better understand what they are spending across the entire organization including across Contingent Labor spend, and has resulted in a trend of corporate initiatives for Supplier consolidation and having preferred relationships.**

9. For companies that have had a first-generation Vendor Management System (VMS) in place to manage Contingent Labor, Statement-of-Work (SOW) or project-based services are driving new technology requirements not supported in the traditional VMS. (**Forrester)

10. The average mix of Contingents in the Fortune 100 is 20-30% of the workforce. This can be estimated to increase to 50-50% by 2020, at which point it would make sense for companies to establish the role of the Contingent Workforce Officer (CWO) as a C-Level Executive. The CWO would focus on using workforce mix modeling to get the right ratio of Temp vs. Perm in meeting Stakeholder objectives. (Staffing Industry Analyst –The Future of Staffing)

11. Internal Revenue Service (IRS) mandated 1099 Independent Contractor Compliance has evolved beyond the “20- Point Checklist” to Services Procurement, the Statement-of-Work (SOW) and SOW Management.

Clover clients enjoy the following benefits:

• Client-identified contractors are quickly onboarded through Clover’s Payrolling Services.
• Vacancies are filled with Clover’s Staffing and Agency Services.
• Contractor Management Services allow project teams to focus on core competencies by handing off vendor management responsibility to Clover as a managing agency.
• Contractor wages are validated and best managed through Clover Salary Benchmarking.
• Retirees and annuitants can be safely re-engaged through Clovers Re-engagement Services.
• Global Mobilization supports your entire contractor workforce with SOS, logistics and immigration services.