The UK is among a growing number of countries where oil companies and their supply chain are trying to drive down employment costs by importing cheaper foreign labour.
Indeed the swing has been significant over the past year, according to Hays and Oil & Gas Jobsearch in their detailed new upstream oil and gas industry jobs market survey.
“The list of those countries importing skills at a lower cost to the local market rates have grown markedly since last year and now includes the UK, Norway, Netherlands, Saudi Arabia, Brunei, New Zealand, Canada, the United States and Brazil,” says the report.
“All sought to reduce their cost base by importing lower cost options from overseas.”
However, Hays/Jobsearch said that perhaps more interesting are the countries that have seen falling salaries and many are in North Africa and Europe.
“Both are a reminder that whilst the demand for energy remains high the industry is not immune to what is going on in the world around us on a regional basis, be it social conflict or economic pain.
“For those looking from the outside in, the situation in Europe is of most concern. At the time of writing, the situation continues to weigh heavily on equity markets and trading conditions within the wider global economy.
“The impact of this sentiment has been felt already with some recruitment markets softening in the last few months of 2011, and day rates struggling to maintain previous levels.”
However, the global salary trend was and remains upwards, especially among main contractors and operators.
“The most significant rises, however, came for those with the least experience within any of the company types, and reflected the increasing competition for entry level talent compared to the year before,” says the report.
“We also saw a rise for the most experienced end of the market as companies sought to put their increasing profits to good use, both in rewarding that talent, and also in attracting new strategic hires.”
But significant exceptions are recorded, notably general contractors and equipment manufacturers, both of which have a high level of local employees (as opposed to imported talent).
“In this respect both groups will be more aligned to local economies than any global forces and may explain the lack of growth.”
Another grouping to experience little salary movement in comparison to 2010 is the global super majors.
While this might seem surprising, Hays/Jobsearch attribute this to “the effects of localisation/nationalisation drives within the workforce, reducing average salaries”.
It was noted that there was an increase in local employees within the super-major grouping, from 47% in 2010 to approaching 55% in 2011.
Also, employers were shifting their employment mix away from contractors to a more permanent staff base, except in new frontier regions.
This reduced the overall requirement for temporary employment and was a result of the increasing confidence in the future.
Once again, skills shortages were experienced with the result that contractor rates soared in the most impacted countries, especially Australia and Brazil.
A major demographic gap in the oil and gas industry is the widespread lack of women, including in the UK. However, that is now changing. An increase to 7.8% was recorded for 2011, compared with 7.1% in 2010. But the pace of change was apparently not as quick as “most would like”.
The report warns: “Sadly, to achieve parity with the wider general workforce in terms of gender diversity will take over 30 years at the current rate of growth.”
As for average age, a small increase from 36.5 down to 35.5 years old is recorded.
Employer’s confidence in the current employment market has improved a lot since the last study . . . up to 26.7% compared with 9.7% last time.
“Whilst the majority of regions were experiencing solid growth this time last year, the Gulf of Mexico and the North Sea markets were still shaking off the effects of the recession, which consequently weighed down the overall average.
As the market continued to heat up so did concern for skill shortages. This has grown as a percentage of the overall 14,000-plus sample from 28% to over 30% and is now the biggest issue for the industry.
This is being felt most acutely in Australia and South America, the two hotspots where local resources are most stretched. North America and Europe are reported to be close behind.