The two leading concerns facing the oil and gas industry are skills shortages and economic instability.i In 2013, when Hays published their salary guide for the oil and gas industry, oil prices were easily above the economic threshold of $80/bbl. The price of crude settled at $44.45/bbl last week—the lowest price in almost six years. The falling prices are hitting smaller producers. Baker Hughes reported a drop of 94 rigs last week alone. As these companies work to manage expenses, they’ll need to spend smarter and maximize productivity.

Second only to taxes, payroll costs average 22 percent of all operating costs in oil and gas companies in the United States.ii A salary of $70K will cost the employer approximately $88K, and to train a new staff member may take six to nine months. Managing payroll costs will be one way that companies will need to streamline. Each member of a team needs to produce efficiently and accurately, working to lower the costs and increase production. Below are a few ways to increase efficiency:

  • Utilize a time management program that records what is being produced
  • Analyze the activities and productivity
    • Identify training issues
    • Keep your eyes open for areas that can be automated or improved
    • Evaluate the quality of the work and its effect on business
  • Plan for productivity and utilization
    • Balance your resources
    • Compare planned timing against actual
  • Define the scope, risks, deliverables and priorities for both jobs and specific projects
  • Create a workplace where employees can share ideas and knowledge, limiting the impact of any absent resource

i Hays Salary Guide: Review of 2013 / Outlook for 2014