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Three Reasons Why Energy Employees are Gaining an “Unfair Advantage”

By Traci McCready

April 9, 2012

The Hays Oil & Gas Global Salary Guide 2012 quantifies what a lot of us in the Energy industry are feeling. When it comes to talent, it’s a seller’s market. Consider these findings from the responses of more than 14,400 employers and employees worldwide.

  • Over the next 12 months, one in three employees expect a salary increase of more than 10%. That’s on top of recent significant wage increases; 49.5% of employees had earned a salary increase of more than 5% in the last 12 months.
  • “Over a quarter of those employers surveyed expect an increase in staffing levels by 10% or more.” Another 25% expect that staffing levels will increase between 5 and 10%”
  • “In 2012, the pool of available talent has diminished significantly and this has led many companies to employ new talent and seek to retrain.”

Beyond the economic laws of supply and demand I think there are three factors contributing to a job market where employees often have the upper hand.

  1. Companies are competing on the wrong playing field — The price war is getting intense and companies are blowing through their talent budgets. We’ve all heard the stories of highly compensated hourly workers jumping to new opportunities for a dollar an hour increase, only to be lured back for another dollar. But, as the Hertzberg Motivation Theory contends, it’s not salary and benefits that drive high motivation; it is actually job satisfaction and commitment. Employers need to re-examine what employees really want and what they have to offer that differentiates them from their competitors.
  2. You can’t distinguish the players without a scorecard – Companies aren’t building any real differentiation that might attract the most sought-after employees. With a few notable exceptions, energy company employee value propositions (EVP) sound strikingly familiar. Most highlight their compensation and benefits packages but say nothing about the interesting and differentiating aspects of their organization. If you’ve been in the industry in Houston for some time, perhaps you can rely on the grapevine to know what’s going on at various companies. But the engineering graduate from Carnegie Mellon or a young driller who has spent the last two years on a rig in a regional drilling office needs more information to make informed career decisions.
  3. “Who’s on First?” The misalignment of strategy, organization and talent – HR departments are running on a talent treadmill, being asked by one department to add more contractors and by another to hire more full-time employees, running faster than ever without really knowing where they or the company are headed. Just like the old Abbott and Costello baseball comedy routine, the problem is a lack of communication and alignment. For the HR team – and the people they’re responsible for hiring — that means developing a clear understanding of how the company’s strategy is connected to their roles and the execution of their day to day work.

A small group of senior energy industry executives and I will be examining answers to these issues during the Offshore Technology Conference in a few weeks. Here are the details:

An Axiom Energy Roundtable

Unfair Advantage: Why the Talent Shortage Threatens Your Strategy, and What Energy Companies Can Do About IT

Tuesday, May 1st

8:00 am – Registration

8:30 am to 10:00 am — Breakfast and discussion

Hotel Zaza

5701 Main St., Houston (in the Museum District)

You can reserve your seat at this exclusive event by contacting my colleague, Ms. Anna Sobieski, (asobieski@axiomcp.com). Or call her at 312-523-2183.

We also invite you to complete our brief “Alignment Survey.” We will review the aggregate results at the breakfast meeting (individual results will remain confidential) to benchmark how energy companies are coping with the talent shortage.

What’s your perspective on the energy labor market these days?

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