It’s never been this challenging to resource oil and gas projects and companies must act proactively on offers and rates to secure the skills they need to undertake work effectively.
The market for subsurface, well testing and drilling skills is in a perfect storm. On the one hand the COVID epidemic saw many businesses reduce headcount, people retire or leave the industry and, as a result, we have a higher competition for sourcing of skilled professionals. On the other hand, the Ukraine conflict, and the post covid bounce has driven up oil prices, increased projects globally and resulted in an increase in demand for skills and resources. A perfect storm which has meant that demand is hugely outstripping supply – and every company is having to compete for scarce skills. And as with any market where demand outstrips supply, rates are being driven up to secure skills needed.
Experienced consultants are being offered rates that are higher now than in 2019/2020/2021 and businesses that do not match increase rates are losing good quality people.
Edna Travers, Consultant Services Principal Consultant for OPC said “This is the third time since I joined the industry that I’ve seen such a high demand for skills. This time may be the most challenging as many rates were cut in 2020, and now the boom has driven up rates very quickly. I was talking to at least three consultants in the past month who have resigned from their projects having been approached by other companies offering 50-90% increase in their day rate.”
Companies need to show flexibility in rates to retain experienced staff. Many businesses took the opportunity to cut rates in 2020 and expected consultants to be flexible then. Now they need to react even quicker to retain and attract skills. Companies that do not increase the rates that they pay are now losing consultants.
“There are currently no experienced consultants without a contract – and many are getting approached every week with new opportunities. Companies have got to make themselves an attractive choice – and that means increasing rates and offering better benefits. It is refreshing and encouraging to see and hear consultants having more than one offer to consider and the common feedbacks received from experienced consultants these days are: “I am not available”, “not interested”, “I just signed up a new contract”, “rate is too low”.
“We’re seeing some companies re-introduce business class for flights over 4-5 hours again, offer some family benefits and allowances for residential contracts for consultants, and others are open to a hybrid working model. Hybrid working can reduce the overall cost as consultants spend less time on location in hotels and/or travelling. They are also more attractive to consultants with families.”
One additional challenge for resourcing is the immigration and visa restrictions in certain countries who will not issue visas for individuals above 60 years of age. This effectively rules out a good number of skilled consultants who are a perfect fit for the job.
“Companies that do not make themselves attractive to consultants will fall behind competition and be unable to take advantage of the current high oil price opportunity.”
Edna’s key tips are:
- Benchmark the rates you are paying (ask OPC if you cannot)
- Increase rates to reflect the market as much as you can
- Offer Long term contracts
- Include hybrid working options
- Improve your package by revising payable days strategies, travel policies, benefits, and allowances
“The key lesson to understand is that the power is in the consultant’s hands now. They often have several choices, and you need to think of how to attract them to your projects.”
Contact Edna for assistance in benchmarking your business and for more details on OPC’s consultant services.
Please contact Edna Travers for more information.
+44 20 7428 1111