Manpower: ‘A shortage across the board’
Geologist Pay Reflects Demand
It has become a familiar story that began three years ago: Manpower needs in the upstream industry coupled with the need to find more resources are causing big rises in salaries for petroleum geologists.
Hold that thought. You’ll probably be hearing that again for a while.
The 2008 AAPG EXPLORER salary survey showed a weighted average increase of 9.45 percent in pay for geoscientists. Last year’s survey showed a 9.1 percent increase, following a 16 percent boost in 2005-06.
A 35 percent rise in salaries over three years is memorable – and it doesn’t look like there’s anything in the near future to slow the upward salary projectory.
The EXPLORER survey, conducted annually since 1981 by Mike Ayling of MLA Resources in Tulsa, showed the 6-9-year experience category charting the largest increase, with an 18.6 percent rise in salaries.
Closely behind with 17.7 percent in salary growth was the 3-5-year experienced geologist category, which showed an average annual salary of $107,800.
Ayling noted the large increases reflect the shortage of young professionals in those experience categories. Ah, the magic of supply and demand works again.
It also indicates the industry’s focus on reloading vacancies being created by retirements, and on retaining new and recent hires.
The almost negligible increase in salaries of new hires “is possibly skewed low by a few bachelor of science-degreed geologists employed by very small companies,” Ayling said. Also, cash bonuses are not calculated in the salary survey. A master’s degree for entry-level geologists has been the norm. But again, the demand is overwhelming the supply.
Is there a shortage of graduates available for new hires?
“There’s a shortage across the board – in all categories,” Ayling said, noting that the students who signed up due to the rising energy prices that took off in late 2004 are still matriculating through the educational system and are not yet having a major impact on the market.
Meanwhile, the demand for geoscientists continues to grow.
Part of the Picture
The annual salary survey is based on employed, salaried geoscientists and is based on salaries alone. It does not include bonuses, employee benefits, autos or other perquisites.
It does not attempt to include anyone whose compensation is in the form of consulting fees, retainers or overrides, which Ayling said are on the increase as well.
The purpose of the survey is to provide a yardstick for those interested in assessing their compensation, and Ayling strongly feels that compensation is often a secondary consideration when evaluating overall job satisfaction.
The survey also is based on U.S. salaries only, considered the “gold standard” for the industry. The measurement for international salaries for explorationists is virtually on a country-by-country, case-by-case basis, Ayling said, which makes statistical averaging non-productive beyond the boundaries of any specific country.
Ayling added that many ex-pats are paid U.S.-based salaries, while the national oil companies opt to pay compatriots on a different, lower scale.
Again in the 2008 survey, Ayling said over half of the salaries noted in the survey represent individuals with over 20 years of experience – the largest category of the working geologists. Those geologists entered the profession in the 1970s when prices caused a whopping growth spurt in numbers, followed by almost two decades of alternating layoffs and inconsistent hiring policies.
Many experienced people are seeing very attractive retention bonuses, participations and other incentives, Ayling said. This has mitigated a lot of job-hopping, with the “golden handcuffs” keeping performers from answering the lures of suitors. At least for a while. Those incentives are usually time-bound, and Ayling noted that once those time obligations are met, the shackles are off. Then, watch out, unless the workplace becomes “unleavable” due to professional satisfaction.
Ayling also said the salary figures are feeling more upward pressure this spring “as many smaller companies try to staff up to capitalize on $100-plus oil.”
|0-2||$ 95,000||$ 82,800||$ 58,000|
|0-2||$ 72,300||$ 86,600||$ 95,000|
|YEARS EXPERIENCE||AVERAGE SALARY|
|0-2||$ 59,700||$ 64,000||$ 65,000||$ 65,600||$ 67,800||$ 74,400||$ 82,200||$ 82,800|