(It's not) all about the money

Inadequate monetary rewards may exacerbate the chronic talent shortage, but so does the lack of training and development

The majority of people were not clear on whether or not they will receive a pay raise in the future.
The majority of people were not clear on whether or not they will receive a pay raise in the future.
Less than 30% of respondents said they had a clear promotion structure at work.
Less than 30% of respondents said they had a clear promotion structure at work.
Does your current salary cause you to worry about your future?
Does your current salary cause you to worry about your future?

Overall, 43.8% of people said they were happy in their current job with 12.3% admitting they were ‘unhappy or ‘very unhappy’, while another 35% are considering changing jobs.

Everyone who took the survey said that if they were to leave the industry, “salary” would be their main reason.

“The timing of a counter offer and the attraction of a significantly higher salary can sometimes leave little doubt in a candidate’s mind to stay with their current employer,” said Richard Foulkes, Client Partner at Pedersen & Partners based in Dubai.

However, offering pay hikes over and above the market rate can have a negative outcome for employers and employees alike, Foulkes argued.

“For the employee who chooses to change companies every two years, the ability to increase skills and add real value to an organisation will be severely impacted.

In particular, for industries such as private equity the real rewards will only materialise over the longer term.

“For employers, it is unsustainable to continue increasing salaries without negatively impacting the profit and loss and creating internal conflicts.

The right way to achieve the desired levels of retention is to ensure each staff member understands their opportunities within the firm and the importance of development over the longer term.

“Loyalty programmes and bonus schemes can also be used to motivate retention.”

According to Foulkes, a number of measures can be taken to retain the best staff.

“Prevention is better than cure and providing a clear understanding of an employee’s career path together with the right level of training and development will help to decrease turnover.

“In order to continually upskill the promising junior Saudi employees, businesses should still look to place more experienced expatriate hires at a senior level to assist with the development of the Saudi teams.”

On the question if they received enough training for their role, respondents were fairly divided: 45.8% said they did, while 42.8% said they needed more training, with the remaining 11.3% answering they were unsure.

Foulkes added: “Training and development does not always need to be a technical or a team building exercise.

“Educating employees in regard to the longer-term benefits of remaining with a firm is also important. Ideally, this of course needs to be completed before an employee has already received an offer of employment from a competitor.”

Andy Gibbins, said: “Companies are making efforts to bring on new staff, including the necessary development programmes for local staff but it is essential to test the robustness of such programmes, bearing in mind that there will always be a certain drop-out rate and the fact that all sectors are chasing the very best graduates.

“In developing such training and development programmes, it is important to adapt the programmes to today’s youth. Multi-media solutions are required in addition to the traditional classroom and on-the-job training methods.”

“An immediate challenge comes from the fact that low crude prices have forced companies to cut costs, including training and development costs. This can be a risky strategy, given the future need for skills, which is looming fast,” Gibbins adds.

Dasha Lukiniha said: “It is such a turbulent time right now for the oil and gas sector.

“Before the drop in oil prices, I think international companies would have been in a very good position, with help from government training schemes and initiatives, they would have been in a very good position to offer training and skills development schemes.

“But now, companies are operating in such uncertain times their first thought is always going to be ‘how can we operate in the most efficient way possible?’ The margins are becoming very thin, so if there are existing professionals who already have the skills and can already deliver those, then they are going to look to these people first before training anyone else.

“I think there is too much uncertainty at the moment for companies to invest in training. This will be a turning point for the way that companies operate within the oil and gas sector – that includes different technology, different working relationships.

“Right now I would say that oil and gas companies are more concerned with the short term view, at least for the next 6-12 months, so they will be less inclined to look at long term career development.”

Another pressing issue for the oil and gas sector is its aging workforce. Adil Anwar, associate director at Morgan McKinely, said: “There is a big gap between the real experienced people and people with 25-30 years of experience.

“To overcome that gap I think what employers should do is they should use those guys (who have retired, or are about to retire) and they should bring them in as consultants to train and develop the mid-level and lower level engineers and managers.

Anwar continues: “I think employers can also look at other industries as well and other sectors and look at transferable skills.

“For example, for an electrical engineer, [they should] look at industries like the construction industry or the power industry.

“They are transferable skills so it all comes down to training and development.

“I think the emphasis needs to be on training, development and looking at the future workforce. And this is the case for nationals as well.”

Gibbins said: “Firstly, there is a large band of people in the 45-55 age range, which means that a lot of people will retire in waves.

“These people have considerable experience which is difficult to replace through training alone. It is essential that companies look closely at their age and retirement profiles and start planning now.

“This must include training and coaching programmes for new intakes at school-leaver age, as availability of experienced personnel will become tighter and staff will be more difficult to recruit.

Almost two thirds (64.6%) of those who participated in the survey agreed that there is no clear promotion structure in place at their work.

Barrett said that this particular finding is illustrative of a huge complaint that he has frequently seen himself when placing candidates with other companies. “They do not feel there is a clear and long-lasting career path,” he added.

The ‘no chance of promotion’ is an issue expressed more frequently by expat staff, who feel, in some organisations, that progression options are more limited, Gibbins noted, adding that “this is certainly always the case.”

“There does, however, have to be an understanding that for organisations to achieve required numbers of local staff, that certain fast-track programmes will be required.

“This is perfectly normal and has to be the case for oranisations to have the right staffing balance in the future.”

An overwhelming majority – 77.8% said they worked between 41 and 45 hours per week (33%) or 45 hours and above (44.8%).

“Many oil and gas companies have tried to implement flexible family-friendly working schedules, with working hours kept in the low 40s.

“It is unsurprising that 77.83% of respondents work 40+ hours per week, since quite a few companies now pay overtime to salaried individuals for each work hour over 40, although they do not require those employees to work these overtime hours routinely,” said Barrett.

This also raises the question of whether or not the industry is doing enough to encourage employees to have a healthy life-work balance.

Gibbins said: “This varies from company to company. The biggest issue tends to be amongst the shift workers, where overtime is often used to cover absences for training and sickness cover.

“In the US and Europe, companies are developing fatigue risk management for shift workers and are training shift workers in how to adapt to the needs of shift work.

“Much more should be done in this region in this regard.

“Another hot spot is in new projects. There is always pressure to complete to schedule, as in many cases contractual penalties can apply.

“To avoid excessive hours requires discipline on the part of the producer companies and on the part of the contractors supplying project labour.

“Guidelines should be set for maximum working hours, to limit fatigue, promote work-life balance and to reduce the numbers on incidents and injuries, which can be linked to fatigue.”

Almost half of the participants (47.98%) said their salary makes them very worried about their future, with a huge 40.9% of the survey-takers not saving for retirement at all.

Dr. Conrad Pramböck, said: “One of the most interesting aspects of the survey is that while 42.3% of the respondents consider their pay fair, almost a similar number – 37.1% – feel that their salaries do not adequately reflect their performance. These numbers can be explained by the fact that the respondents are comparing their own pay to unrealistic salaries expected to exist in other industries.

“Perhaps a ‘grass is always greener on the other side mentality’ is at play.

“This level of dissatisfaction – which, according to our own surveys, is found across most other industries – might also simply reflect the very human tendency to never be content with what you have. Data from other Pedersen & Partners surveys shows that the stagnation in compensation increases is affecting management and employees alike.

“A few years ago, for every 3% increase received by the regular employees, management would get double (6%).

“Nowadays, the executives get the same increases as the mid-tier employees, so this trend affects all levels,” Pramböck said.

Foulkes commented: “General satisfaction with the industry and interest in oil and gas jobs are expected to remain strong.

“The overwhelming majority of the survey respondents (90.15%) agree that the upstream oil and gas industry is a good sector to work in, and this only confirms that the industry will continue to be a desirable place to work.

“[It] is not going away, at least not for the next 5-10 years, although there will be constant efforts to augment the demand for energy with renewable options,” Foulkes concluded.


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