Just 27% of US oil and gas firms plan to freeze salaries in 2017 compared with more than half of those firms doing so in 2016, according to a survey from Aon Hewitt, a provider of human capital and management consulting services.
Forty-nine organizations spanning the downstream, upstream, midstream, and oil field services and equipment segments were surveyed to gauge the impact of the recent operating environment on their compensation budgeting process for 2016 and into 2017.
Base pay increases within the oil and gas industry in 2017 are projected to rise modestly year-over-year to 2.6% from 2.4%, the lowest among all US industries in 2016. The national average among all industries for 2017 is projected to rise to 3% from 2.8% in 2016.
Variable pay (bonuses) budgets for oil and gas firms in 2017 are projected to decrease slightly year-over-year to 18.6% of current payroll from 21.7%, the highest among all US industries in 2016. Altogether, US industries averaged 12.8% in 2016 and are projected to average the same in 2017.
Some relief also is seen in 2017 for the beleaguered oil field services and equipment segment, three quarters of which is expected to budget for base pay increases. The segment was most likely to freeze pay in 2016.
Upstream firms, the least likely to freeze pay in 2016, are expected to reduce pay budgets more sharply in 2017.