recruitment trends may 2005

8/12/2019 Recruitment Trends May 2005

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‘key jobs need key people’Copyright 2005: Worldwideworker Copyright 2005: Worldwideworker

Recruitment trendsRecruitment trends

TanjaTanja OldenzielOldenziel Dubai, May 25Dubai, May 25thth, 2005, 2005

Good evening ladies and gentlemen.



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Copyright 2005: Worldwideworker Copyright 2005: Worldwideworker ‘key jobs need key people’

OverviewOverview

IntroductionIntroduction

Salary trendsSalary trends

Discipline shortageDiscipline shortage

SummarySummary

In the next 20 minutes I will tell you about recruitment trend in the oil and gas

industry. I will show salary data and discuss the discipline shortage. We all know

and hear about this shortage. I will put some facts and figures to it. I will concludewith the status of the industry from a recruitment perspective. I first give you an

introduction on Worldwideworker and myself.



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Worldwideworker Worldwideworker

Recruitment for oil/gas industryRecruitment for oil/gas industry

Active job website Active job website

300300 oil&gasoil&gas jobs/month jobs/month

6000 hits/day6000 hits/day

130.000 oil/gas professionals130.000 oil/gas professionals

Dutch companyDutch company

Worldwideworker is the recruitment company in the oil and gas industry. Most of

our recruitment is online via our active job website and database. We place

around 300 oil and gas jobs every month, and we get around 6000 hits everyday,from companies and candidates. In our database there are close to 130.000 oil

and gas professionals; some directly looking for a job, some waiting for the ideal

opportunity. We are a Dutch company. Not that it really matters, we have an

international presence. For us, it does not matter if we source a German

company building a factory in Pakistan, or find a very skilled professional in the

Philipines for Shell to complement their team in South America. Worldwidewokrer

is there for companies to help them find the right people, and Worldwideworker is

there for the candidates to help them find jobs.



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TanjaTanja OldenzielOldenziel

Worldwideworker Worldwideworker

Upstream manpower (TEAM) & recruitmentUpstream manpower (TEAM) & recruitment

GeoscientistGeoscientist

“Time“Time--lapse seismic within reservoirlapse seismic within reservoir

engineering”engineering”

What do I do within Worldwideworker? I am in charge of upstream manpower,

called TEAM. With a very dedicated approach we place individual consultants or

a team of consultants. Before joining Worldwideworker, I used to work as ageoscientist on multi-disciplinary projects, mainly in reservoir characterization. I

have my MSc degree in Petroleum Engineering and did my PhD in “Time-lapse

seismic within reservoir engineering”.



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OverviewOverview




SummarySummary

Let’s have a look at the salary data. This is what all of you are interested in, what

am I earning compared to my colleague, is my salary industry standard. And for

the students among us, you can have in idea what you will be earning in thefuture. Before I continue, please be aware that I show average numbers and we

are talking about the base salary. It does not mention whether people also get a

housing allowance, a company car, or if school fees are paid.



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Regional SalaryRegional Salary

In this slide you see the average salary in the Middle East for few job titles. These

salaries are for people with more than 15 years of experience



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Regional SalaryRegional Salary

In this slide, the average salary for 15 years plus experience is given for different

regions compared to the Middle East: North America, Europe, Asia and North

Africa. People in North America and Europe are more expensive, while people in Asia and North Africa are willing to work for a lower salary. This is what you see

reflected in the industry. Companies with a very tight budget go looking for Asian

and people from the Middle East. While the companies who can afford to spend a

bit more, are willing to hire Americans and Europeans.



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Reservoir engineer Reservoir engineer

globally

UAE

Let’s look at what a reservoir is earning. You see a breakdown for the years of

experience. On average, they earn 6300 USD/month. The same overview is

given for the UAE as well. Just have a look at the numbers and see where youstand.



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Drilling engineer Drilling engineer

globally

UAE

A drilling engineer is earning the same 6300 USD/month on average.



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GeologistGeologist

globally

UAE

The geologist is earning a 5600 USD/month. I can continue to show these types

of slides for all the 900 job titles in our database. I will not bore you with that. I

know you rather digest food than numbers. When you register atWorldwideworker, which is free of charge, you can get these numbers yourself

via the salary checker, which is also free-of-charge. If you worried about your

details being out there, you can register confidentially. None of your details will

ever be revealed to any company unless you do so yourself.



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Salary increaseSalary increase

Do you get an increase in 2004?

Last February we did a survey among the candidates in the database. Some

5500 candidates replied. We asked them dozens of questions. One of which was

if they received a pay raise last year. About 70% received up to 5%. Of which40% did not receive any raise. So, count your blessings if you received more than

that. Or be one of the many.



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Salary increase cont’dSalary increase cont’d

Do you expect an increase in 2005?

We asked the same group if they expect a pay raise next year. I plotted the data

such, that it is sorted according to the raise they got last year. 70% of the people

that did not get a raise, do not expect one either next year. Same goes for themajority of the people receiving up to 5%, they expect the same this year. So

does the group up to 10% increase.



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OverviewOverview




SummarySummary

So far the salary data. We all know there will be a discipline shortage in the oil

industry. We have read about it in the newspaper, and technical magazines. In

the oil industry, the workforce is 10 years older on average, with not enoughyoung people getting in, and the activity is increasing. I will put some fact and

figures to the upcoming shortage.



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Demand Oil industryDemand Oil industry

globally

First I show you an overview of the jobs we have put on our website in the last

years. It is sorted per disciplines in the oil industry. The majority of the jobs are in

either Exploration and Production or Engineering and Construction. In the nextslides, I will focus on Exploration and Production, as this is what we are all

working in.



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Demand per job titleDemand per job title

globally

Let’s have a look at the breakdown per job title. I have chosen typical job titles in

the upstream part if the industry. Again you see a slow 2003, and from there in

increase in demand for most job titles. This is a global overview.



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Demand per job title in MEDemand per job title in ME

Middle East

Also for the Middle East, the demand is increasing for most job titles. Although for

some it is going down.



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Registration (global)Registration (global)

globally

Drilling Engineer 3300

Geologist 4300

Geophysicist 2800

Geoscientist 3500

Petroleum Engineer 5600

Petrophysicist 1300

Production Engineer 5100

Reservoir engineer 3500

On one hand Worldwideworker has an insight into the company demand. On the

other hand, we have our database of professionals. Over the last years we see

that the new registrations are decreasing. This graph shows the new registrationsglobally per year for the same job titles as shown previously in the demand

graphs. For most of the job titles you see that we are not getting as many new

candidates. This means we have to fill the increasing demand from the same pool

of people which is only growing slowly. It does not mean the amount of

candidates is decreasing. On average we have about 3000 to 4000 professionals

per job title.



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Registration (USA)Registration (USA)

USA

If we look at the new registrations for the USA, you see the amount of new

registrations is decreasing dramatically. In the US the discipline shortage is

already being felt greatly. And that also amount for the trend. These days,professionals are directly headhunted and do not need sites like Worldwideworker

so much anymore. In 2002 with the low oil price that was a different story. Many

were not secure of their job and wanted to make sure that were aware of other

job opportunities.



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Average age in oil industryAverage age in oil industry

SPE & all US Engineersage demographics

0

5

10

15

20

25

30

35

40

20-29 30-39 40-49 50-64 65+

Age range

%

SPE 1997

SPE 2002

US ENG 1999

Retirement wave in 5-10 years!

The average age in the industry is roughly 10 years higher than in other

engineering industries. This will cause a retirement wave. When asking the

candidates in the survey “When would you like to retire?”, it turns out that 50%will retire more than 10 years from now. In other words, 50% will retire within the

next 10 years!!! If people work about 40 years in their career, you only expect

25% retirement every 10 years.



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Company demand increasesCompany demand increases

Registration decreasesRegistration decreases

Retirement wave in 5Retirement wave in 5--10 years10 years

“Delegates were more concerned with finding“Delegates were more concerned with finding

people and supplies than in finding business”people and supplies than in finding business”

Eldon Ball (Editor, Offshore)Eldon Ball (Editor, Offshore)

So, there is increased activity in the industry which is reflected in an increased

demand. On the other hand, we see a decrease in new candidates registering on

our website. And 5-10 years a retirement wave will hit the industry. These days,every company seems to recruit and it is often easier to find business than to find

people to staff them.



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Talent poolTalent pool

Short termShort term

Global sourcingGlobal sourcing

SPE Membership regional split

0%

20%

40%

60%

80%

100%

20-29 30-39 40-49 50-64 65+

Age ran ge

Developing Regions

N-America & Europe

How can we increase the talent pool? On the short term, we need to benefit from

global sourcing. In Asia, Middle East and South America there a lot new people

joining the industry, and willing to work internationally. We should help thesepeople find a job. If you look at the breakdown of the SPE members in Europe/US

and developing region, you see that the younger generation sees a higher

representation from the developing regions.



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RetireesRetirees

Second we need to employ the people that have and soon will retire. When we

ask the candidates, are you willing to work in the industry after you have retired,

80% says yes! If they would work only 3-4 months a year, we increase our talentpool considerably. And why wouldn’t they be working? These days, you can

easily work from home for most jobs.



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After retirementAfter retirement

Do you plan to work as consultant?



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Global sourceGlobal source

RetireesRetirees

ConsultantsConsultants

. Thirdly, we need to use the consultant’s workforce more efficiently. At the

moment, they often have slow periods of a few months in between jobs. If we can

get them to start a new project faster, we will again increase the talent pool.



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RetireesRetirees

ConsultantsConsultants

Long termLong term

Attract people to oil industry Attract people to oil industry

Develop young talentDevelop young talent

Employees are a valuable resourceEmployees are a valuable resource

In the long run, we have to attract people to the industry, develop young talent

and start treating our employees as valuable resource.



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OverviewOverview




SummarySummary

This brings me to reflect on the current situation in the oil industry from a

recruitment perspective.



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Past 20 yearsPast 20 years

Industry has matured.Industry has matured.

Industry has consolidated.Industry has consolidated.

People force has shrunk.People force has shrunk.

The last twenty years the oil industry has matured and consolidated. We now

have the super majors, ExxonMobil, BPAmoco, TotalFineElf, and the huge

service companies Schlumberger, Halliburton, Baker Hughes. The workforce hasbeen reduced to half its size 20 years ago. A lot have people have been laid off in

different cycles. This has not done any good to the loyalty of employees. Either

they have been laid off themselves or they know about friends and colleagues

who have been. These days employees are looking for more in a company than

high salary, they look for trust, appreciation.



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Reason to change companyReason to change company

28% 27%

In the survey we asked what the reason would be to change jobs/companies.

Only 28% is motivated by a higher salary. People are concerned about job

security, are fed up with mismanagement of the current company, or want a moreinteresting job.



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Best Company to work for Best Company to work for

Retain peopleRetain people

Attract people Attract people

EthicsEthics

Companies are trying to retain their employees and attract new people. They

should be aware of what drives the people. A company is not an entity. It is made

up of the employees. A company does not fire somebody, a person does. Acompany does not spill oil, a company does. A company does not screw up the

books, a person does. If an employee is proud of his company, feels appreciated,

part of a family and is secure about his job, he or she is less likely to make these

type of missteps. Hence, business ethics directly affect the bottom line!

And it will be a major advantage in the war for talent.



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WegmansWegmans Food MarketFood Market

(30,000 employees, 3 billion revenue)(30,000 employees, 3 billion revenue)

WHAT MAKES IT SO GREAT?WHAT MAKES IT SO GREAT?

The unusual motto of this privatelyThe unusual motto of this privately

held grocery chain is "Employees first,held grocery chain is "Employees first,

customers second."customers second."

TheThe WegmanWegman family's rationale: Whenfamily's rationale: Whenemployees are happy, customers will be too.employees are happy, customers will be too.

Fortune Magazine 2005

Let’s have a look at what the best company is to work for. According to Fortune

Magazine, the best company to work for is Wegmans Food market. Why. They

have a simple motto: employees first, customers second. They reason that if theemployees are happy, customers will be too.



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Only one energy co. in US top 100Only one energy co. in US top 100

Valero Energy (16,000 employees)Valero Energy (16,000 employees)

WHAT MAKES IT SO GREAT?WHAT MAKES IT SO GREAT?

This 25This 25--year year --old oil refiner and gas retailerold oil refiner and gas retailer

has never laid off an employee. And when ithas never laid off an employee. And when it

comes to bonuses, the lower levels aren'tcomes to bonuses, the lower levels aren't

forgotten: Executives receive theirs only ifforgotten: Executives receive theirs only if

everyone else in the organization does.everyone else in the organization does.

Fortune Magazine 2005

In the US top100 there is only one energy company. It is not Shell, BP, Exxon, or

any of the independents. It is not Schlumberger, Baker or Halliburton. It is Valero

Energy. Ever heard of them? They never laid of one employee in the last 25years and when it comes to bonuses, they first give to their employees and then

to the managers, if any is left.

Both companies follow a different approach. This type of approach will probably

become rule rather than exception as people are the most difficult to find

resource in the years to come.



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Oil & Gas appealOil & Gas appeal

Few will switch industry

Many like Oil & Gas!

Before I conclude, I want to share with you that as an industry we are not doing

bad. When asked, 40% finds working in the industry fantastic and another 40-

50% good. Few will switch industries.



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ConclusionConclusion

Oil industry is used to downsizing, firingOil industry is used to downsizing, firing

people and having enough peoplepeople and having enough people

At the moment, oil industry is At the moment, oil industry is

fundamentally understaffedfundamentally understaffed

Talent is difficult to findTalent is difficult to find

Salaries are going upSalaries are going up Industry mindset will changeIndustry mindset will change

This brings me to my conclusion. In this lecture I have painted a picture of the

industry from a recruitment perspective. The oil industry has been used to

downsizing, firing and having enough people. At the moment, however, theindustry is fundamentally understaffed. Professionals are difficult to find and will

become even more so. We see salaries going up. But his will not be enough. The

mindset of the industry will change. Companies are changing or will be changing

soon in the way they treat their (future) employees. And that is good news to all of

us, isn’t it?



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The War for Talent has started!The War for Talent has started!

Leave me to say: The war for talent has started.




Worldwideworker Worldwideworker thanks youthanks you

for your time andfor your time and attentionattention

Thanks for your time and attention.

recruitment trends may 2005

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