MORE oil and gas employees will receive a pay rise this year than last, but it will be a less significant increase than they hoped for
According to the FY 2019/20 Hays Salary Guide, 88% of oil & gas, mining, resources and energy industry employers will increase salaries in their next review, up from 81% who did so in their last review.
However, the value of these increases will fall. Almost two-thirds (63%) intend to raise salaries at the lower level of three per cent or less, up from 54% who did so in their last review. At the other end of the scale, just five per cent of employers, down from seven per cent, intend to grant pay increases of more than six per cent.
Professionals prioritise a salary increase
For their part, 34% of the oil and gas, mining, resources and energy professionals Hays also spoke to expect no increase whatsoever, while a further 48% expect three per cent or less. However, 12% expect between three and six per cent and the final six per cent expect a raise of six per cent or more.
More than half (57%) say a salary increase is their number one career priority this year. 46% intend to achieve this by asking for a pay rise, while others are looking elsewhere – 41% of jobseekers say their current uncompetitive salary provoked their job search.
“Tug of war over salaries”
“Evidently, the aggregate effect of several years of sedate salary increases is taking its toll and we’re now seeing a tug of war over salaries,” says Chris Kent, Regional Director of Hays Oil & Gas.
“On the one hand, we have professionals telling us they’ve prioritised a pay rise and are prepared to enter the job market to improve their earnings. On the other, employers tell us they are being impacted by skill shortages yet they plan to curtail salary increases for now.
“While a rising oil price has created a general pick up in the oil and gas sector in Australia, which will be good news for vacancy activity in 2019-20, several subdued years may prevent any real wage pressure.
“Having said this, some wage pressure may arise if employers need to compete with the mining sector for talent.
“We may also see some salary increases in South Australia if businesses are forced to match the higher salaries on offer in Queensland and Western Australia in order to attract candidates.
“In exploration in particular, Geologists, Drillers, Company Representatives and rig crews are in higher demand than in previous years but there is likely to be little wage pressure. Competition for talent may come from North America, the Middle East and Europe as a rising oil price generally results in all international markets increasing capital investment, with skill shortages surfacing as a result. As these shortages grow, salary increases will likely follow.
“For new projects, Project Engineers as well as Cost and Planning Engineers will remain in demand in most states as construction and upgrade projects commence and oil and gas employers compete with mining and construction companies for these transferrable skills. This may also result in wage pressure in some areas.”
In other key findings, the 2019/20 Hays Salary Guide found:
• 67% of organisations offer flexible salary packaging. Of these, the most common benefit is salary sacrifice, offered by 55% of employers to all employees. This is followed by above mandatory superannuation (offered by 37% of employers to all their employees), parking (33%), bonuses (27%) and private health insurance (26%);
• Of the benefits offered to a select few employees, private expenses tops the list, with 70% of employers offering it to a hand-picked number of employees;
• 68% of employers said business activity had increased over the past year, with 70% expecting it to increase in the next 12 months;
• 70% say skill shortages will impact the effective operation of their business or department in either a significant (28%) or minor (42%) way, up from 67% last year;
• 54% of employers are restructuring to keep up with changing business needs – the key driver of these restructures is a change in the required skill sets;
• In skill short areas, 57% of employers would consider employing or sponsoring a qualified overseas candidate