Recruitment Trends May 2005

Recruitment trends
Tanja Oldenziel
Dubai, May 25th, 2005
Copyright 2005: Worldwideworker
key jobs need key people
Good evening ladies and gentlemen.
Overview
Introduction Salary trends Discipline shortage Summary
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 conclude with the status of the industry from a recruitment perspective. I first give you an introduction on Worldwideworker and myself.
Worldwideworker
Recruitment for oil/gas industry Active job website
300 oil&gas jobs/month 6000 hits/day
130.000 oil/gas professionals Dutch 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.
Tanja Oldenziel
Worldwideworker
Upstream manpower (TEAM) & recruitment
Geoscientist Time-lapse seismic within reservoir 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 a geoscientist 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.
Overview
Lets 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 the future. 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.
Regional 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
Regional 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.
Reservoir engineer
globally
UAE
Lets 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 you stand.
Drilling engineer
globally
UAE
A drilling engineer is earning the same 6300 USD/month on average.
Geologist
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 at Worldwideworker, 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.
10
Salary 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 which 40% 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 contd

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 the majority 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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Overview
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 enough young 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 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 next slides, I will focus on Exploration and Production, as this is what we are all working in.
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E&P demand per region
The breakdown per regions shows the highest demand in the Middle East, North America and North Africa. You notice that 2003 is a slow year. This is due to the low oil price in 2001 and 2002. The oil industry always plans one year ahead, hence the delay in 2003. In 2004 the activity has picked up and we expect the trend to continue in 2005.
15
Demand per job title
globally
Lets 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.
16
Demand 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)
Drilling Engineer Geologist Geophysicist Geoscientist Petroleum Engineer Petrophysicist Production Engineer Reservoir engineer
3300 4300 2800 3500 5600 1300 5100 3500
globally
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 registrations globally 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.
18
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.
19
Average age in oil industry

SPE & all US Engineers age demographics
40 35 30 SPE 1997 SPE 2002 US ENG 1999 25 20 15 10 5 0
Retirement wave in 5-10 years!
20-29
30-39
40-49 Age range
50-64
65+
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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Discipline shortage Company demand increases Registration decreases Retirement wave in 5-10 years
Delegates were more concerned with finding people and supplies than in finding business 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.
21
Talent pool
Short term
Global sourcing
SPE Membership regional split
100% 80% 60% 40% 20% 0% 20-29 30-39 40-49 50-64 65+
Developing Regions N-America & Europe
Age range
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 these people 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.
22
Talent pool
Short term
Global sourcing Retirees
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 talent pool considerably. And why wouldnt they be working? These days, you can easily work from home for most jobs.
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After retirement
Do you plan to work as consultant?
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Talent pool
Short term
Global source Retirees Consultants
. Thirdly, we need to use the consultants 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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Talent pool
Short term
Global sourcing Retirees Consultants
Long term
Attract people to oil industry Develop young talent Employees are a valuable resource
Copyright 2005: Worldwideworker key jobs need key people
In the long run, we have to attract people to the industry, develop young talent and start treating our employees as valuable resource.
26
Overview
This brings me to reflect on the current situation in the oil industry from a recruitment perspective.
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Past 20 years
Industry has matured. Industry has consolidated. 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 has been 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 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 more interesting job.
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Best Company to work for

Retain people Attract people Ethics
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. A company 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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Fortune Magazine 2005
Wegmans Food Market

(30,000 employees, 3 billion revenue)
WHAT MAKES IT SO GREAT? The unusual motto of this privately held grocery chain is "Employees first, customers second." The Wegman family's rationale: When employees are happy, customers will be too.
Lets 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 the employees are happy, customers will be too.
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Fortune Magazine 2005
Only one energy co. in US top 100

Valero Energy (16,000 employees)
WHAT MAKES IT SO GREAT?

This 25-year-old oil refiner and gas retailer has never laid off an employee. And when it comes to bonuses, the lower levels aren't forgotten: Executives receive theirs only if everyone else in the organization does.
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 25 years 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 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 4050% good. Few will switch industries.
33
Conclusion
Oil industry is used to downsizing, firing people and having enough people At the moment, oil industry is fundamentally understaffed Talent is difficult to find Salaries are going up Industry 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, the industry 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, isnt it?
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The War for Talent has started!
Leave me to say:
The war for talent has started.
35
Worldwideworker thanks you for your time and attention
Thanks for your time and attention.
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Recruitment Trends May 2005

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Recruitment trends

Dubai, May 25th, 2005

Copyright 2005: Worldwideworker

key jobs need key people

Good evening ladies and gentlemen.

Copyright 2005: Worldwideworker

key jobs need key people

130.000 oil/gas professionals Dutch company

Copyright 2005: Worldwideworker

key jobs need key people

Geoscientist Time-lapse seismic within reservoir engineering

Copyright 2005: Worldwideworker

key jobs need key people

Copyright 2005: Worldwideworker

key jobs need key people

Copyright 2005: Worldwideworker

key jobs need key people

Copyright 2005: Worldwideworker

key jobs need key people

Copyright 2005: Worldwideworker

key jobs need key people

Copyright 2005: Worldwideworker

key jobs need key people

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

Copyright 2005: Worldwideworker

key jobs need key people

Copyright 2005: Worldwideworker

key jobs need key people

Salary increase contd

Copyright 2005: Worldwideworker

key jobs need key people

Copyright 2005: Worldwideworker

key jobs need key people

Demand Oil industry

Copyright 2005: Worldwideworker

key jobs need key people

E&P demand per region

Copyright 2005: Worldwideworker

key jobs need key people

Demand per job title

Copyright 2005: Worldwideworker

key jobs need key people

Demand per job title in ME

Copyright 2005: Worldwideworker

key jobs need key people

3300 4300 2800 3500 5600 1300 5100 3500

Copyright 2005: Worldwideworker

key jobs need key people

Copyright 2005: Worldwideworker

key jobs need key people

Average age in oil industry

Retirement wave in 5-10 years!

40-49 Age range

Copyright 2005: Worldwideworker

key jobs need key people

Copyright 2005: Worldwideworker

key jobs need key people

Developing Regions N-America & Europe

Copyright 2005: Worldwideworker

key jobs need key people

Copyright 2005: Worldwideworker

key jobs need key people

Copyright 2005: Worldwideworker