April 19, 2017

Energy - North American Shale Hiring Accelerates

BHI, HAL, RES, SLB, SPN
By Jon Gates
North American shale hiring trends strengthened in 1Q17 with increases expected throughout 2017, as competition grows for field labor in response to increased completion activity in key basins.

Hiring Continues With High Demand in Field
Oil recruiters are prepared for increased hiring in 2017, as upstream producers and service companies search for company leadership, in-house engineers, drivers and field labor. In 1Q17, sources saw hiring growth averaging up 36% to 41% qq, which is stronger than expected in OTR Global’s Feb. 2 note. A Bakken executive recruiter said, "They are trying to get a lot of field guys more than anything. I haven’t seen a lot of engineering roles yet. The Bakken is picking up. The workover guys, the completion guys, the fracking guys and even the water haulers, they’re in a hiring frenzy."

For 2Q17, all sources expect current hiring trend momentum to be steady to stronger on a qq basis. Looking at full-year 2017 expectations, recruiters forecast a 29% to 34% yy growth rate, an increase from the 19% to 24% yy average growth anticipated in OTR Global’s Feb. 2 North American Shale Hiring update.

Recent hires are for positions including accounting, land, drilling, geology, reservoir/production engineering and tech positions. A demand for drivers and field crews in response to completions activity is growing competitive in certain basins. “I know one company in North Dakota -- they do a lot of fracking -- they wanted to hire 65 people in the next two months. There was another company in the Bakken, they were looking to hire 60 people before May," said a Bakken-based executive recruiter. The Permian, Bakken and STACK/SCOOP were mentioned as difficult areas to staff drivers and field crews, where wages are pressured, “For these companies, it’s easier to pay another $1 an hour than to find another person. In places like Midland, there are very few really good people available,” said an executive recruiter in the Mid-Con. Sources recognized Pioneer Natural Resources, Encana Corp., Parsley Energy Inc., Apache Corp., Diamondback Energy Inc., and Oasis Petroleum Inc. for actively hiring.

Salary Inflation Edges Up
For engineering and management positions, compensation packages trended flat to up slightly in 2Q17 yy. Sources said salaries haven’t returned to pre-2015 levels. "We’ve seen the heyday of 15 to 20 percent reset on salaries. A reservoir engineer that might have been making $205,000 to $210,000 in Houston with 20 years experience, now it’s a $185,000 base salary," said the president of an oil and gas/technical search firm. Sources expect compensation packages to continue trending flat to slightly up into early 3Q17. "Yeah, I think salaries are going to go up; it's going to be more competitive. We’ve had a counter offer in every single deal. We are not there yet for candidates getting a 10 percent increase. In upstream these guys should get close to 10 to 20 percent,” said the partner of a C-level oil and gas search firm.

Quotes:
"We have a CFO search up north for a services company. They expanded in two basins; they are going from 350 to 425 employees." Partner, C-level oil and gas search firm

"I heard that Pioneer here in town just hired a bunch of interns full time. That’s usually where they get their new hires; that’s a change from the last few years I believe." Texas-based senior search consultant

"I was talking to a guy who used to work for BJ Services, and I asked him if he was going back now that BJ is a company again; a big issue they are having is they don’t have any staff. They went from like 60-something rig fleets down to two, and you know they’re trying to get the company rolling again and nobody who has any experience with fracking is still around. It sounds like they are having difficulty." Texas-based senior search consultant

What is an OTR Snapshot?

OTR Snapshots are direct feeds from our editors expressing their views on key issues and events in their industries, within and beyond our core coverage. Snapshots feature industry insights, source commentary, and general observations.