A new salary survey documented within The Salary Guide reveals that contract day rates have increased by an average of 30% in the UK oil and gas industry, despite permanent staff salaries remaining subdued.
The guide, produced by Hays Oil and Gas and Oil and Gas Job Search, reveals that home grown UK oil and gas professionals can expect to receive average day rates of £500, up almost 30% from last year’s figure of £390.
An increase of this level signals a strong recovery for the industry: contractor day rates are a reliable indicator of the state of the job market as they are much more reactive to short term changes in demand for skills. However, the fact that the average permanent staff salary dropped marginally from last year’s figure of £58 727 to £55 537 reflects that there is still some way to go before the oil and gas labor market can feel that it is back to full health.
Furthermore, fears remain that this decrease in permanent staff salaries could damage the UK’s competitiveness with overseas countries. Australia, for example, which has the most pressing concerns for skills according to the survey, offers an average yearly wage of £89600, an increase on last year’s figure of £85168 for expatriate labor. Thus there is clear potential for leakage of local talent from the UK to countries such as Australia, Canada and the US, which offer substantially higher permanent salaries than the UK. The survey reveals that almost half of the UK’s oil and gas talent is working overseas.
However, the tangible risk of skill shortages in the UK oil and gas market suggests that pressure will be placed on salaries as employers compete for talent. Overall, the guide shows positive growth and sentiment towards salaries in the sector as the industry recaptures its vigour and confidence after a period of depression.
Cause for optimism.
The revelation that engineers with over 20 years experience in the oil and gas industry are enjoying salaries comfortably in excess of US$ 100 000 offers a further cause for optimism. Those with 10 – 20 years experience are also being well rewarded with salaries between US$ 70 000 and US$ 80 000. Drilling and subsea engineers registered the highest average wage of more than US$ 100 000.
These figures further evidence the positive growth and sentiment towards salaries in the industry. The oil and gas sector is showing notable signs of growth driven by the discovery of new fields, increasing oil prices, and strong consumption and investment levels. Oil and gas engineers promise to be in great demand over the next five years, but the industry has to make a concerted effort to attract talented individuals, including new graduates, to ensure that skills shortages do not hamper its growth over the coming decade.