Here in Oklahoma O&G has always been a strong industry with minor downturns over the past 40 years. The issue is when things are going well (and the companies are making record profits) they tend to increase hiring, business development and overall expansion. They fail to prepare for the downturn. The executives at the O&G companies are ineffective in their roles as they do not plan for the worst case scenario. Why do you need 40 people doing the same role? Why do you pay over market value for your employees? (Why pay a data analyst at CHK $120k when it should be $50-$60k?) Why do you provide lavish benefits for your employees that the company bares all of the expense? (Do you really need company logo bottled water? Free meals?) Most employees are happy with a 401k plan, good medical, dental and vision benefits and a solid vacation/PTO plan. Anyone who stays current with business news could see this coming back before it finally turned ugly. It is an easy out for the O&G companies to blame this on oil prices. Shame on them for setting their companies (and employees) up for failure. I don't see any of the executive leaders in these organizations taking any pay cuts, dissolving unnecessary benefits in order to maintain a solid financial hold at their company.
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It's the Arabs...and that pesky supply-and-demand thing...
You lost me at "minor downturns". 83-84 (gas) and 86-87 (oil). Not minor by any stretch. And a double whammy. Took years to recover, and recovery was slow.
Who is to blame ? Well go back to 2007 people - look at Wall Street and the money industry - giving mortgages to people who earned less than the monthly payment, credit cards to High School kids, wrapping up all those bad loans up into a bundle of an investment and then selling it as if it was worth money.
Bailing out Wall Street put the US into bankruptcy (although it is still well hidden) - it has rolled around the world and damaged all the big nations, Europe, India, China, the whole world is slowing down to a shuffle. Do not need oil when we are not zooming around like crazy. Yes agree - did not need to build big beautiful tower as a monument to EGO - Devon came up to Canada, left us alone for a while, all was good - then all of a sudden, started to interfere - OMG - we need a new version of the intranet, and then another one and then again - each time it was harder to find things and we had less useful information on it. Oh and then we had to start shredding every bit of paper - whether it was confidential or not. Crazy - paying for that - we already did shred confidential documents - now guess what - we are spending more. Then we had all kinds of people to handle career planning, changed processes for performance reviews, goal setting etc etc - it was a make work project. Sometimes you spent more time reporting than doing the work. And meetings about meetings.....
And then "they" complain we spend too much ! Hah. The problem is EGO....and "make work projects" The bosses should have been getting on with their work rather than inventing more hoops for us all to jump through.
Oh and by the way - despite my rant - the people were great, supervisors great, we all hated the hoops from OK.
Your example compares pay in Houston vs OKC. The example answers it self.
It's supply and demand. If the industry comes back, the salaries will be out of this world and they should be.
You saw this downturn coming! Those put options and shorts you purchased have probably skyrocketed in value. You must be living the dream right now. Good work on calling the market, yeah its unfortunate the shareholders and management didn't share the same foresight that you had.
Common Sense-I agree. The example I provided was a data analyst with 5 years experience and a BA degree (I worked in recruitment at the time and was helping this individual after their layoff from CHK). They were making $90k in Houston and was recruited by CHK for $120k in the same role. I personally received a job offer from CHK about 4 years ago for an HR management role and was offered $40k more than I was currently making in a similar role. While everyone wants to make more money it was odd that they paid so much more than the premium in this market.
I also take issue with the lucrative spending by these companies. Did Devon really need to spend $500 million for the downtown tower? I can think of many attractive office space locations around OKC that would have been perfect for a company of their size. The money to cover all of the lavish perks will eventually end and when that happens you must sell assets, reduce headcount or file bankruptcy or use a combination to survive.
I agree with overstaffing and some of the fringe benefits but pay is going to be based on skill set, experience and local job market. A data analyst in okc is going to get paid less than in bigger job markets such as Dallas and Houston.