Survey: Nearly One-Third of Oil, Gas Companies Expect Pay Freeze in 2016

Almost one-third (31 percent) of oil and gas companies expect to freeze pay for 2016, according to a survey released Dec. 17 by Aon Hewitt. The “2015-2016 Compensation Planning Research Update for the Oil and Gas Industry” surveyed more than 60 oil and gas organizations representing more than 315,000 industry employees across all segments in energy.

The survey found that 44 percent of respondents plan on freezing base pay for executives. Upstream organizations have scaled back on base pay increase levels, with 33 percent of respondents indicating a base pay freeze for 2016.

Additionally, 45 percent of respondents reported a funding estimate plan to be at or above target for variable pay funding, while 39 percent of respondents expect variable pay funding to be below target. Twenty-two percent of respondents are debating how long-term incentives will be used for 2016.

As far as 2016 salary budget decisions, 30 percent of respondents expect decisions to be finalized in January 2016, 25 percent are not sure when they will be finalized and 22 percent already have theirs finalized.

Thirty-eight percent of respondents have increased communication with executive leadership on cost considerations as an additional measure associated with the salary increase process, while 30 percent indicated an increase in employees who did not receive salary increases. Of the nearly 43 percent of respondents who plan to allocate additional money for field operations, 23.5 percent will allocate funds to the Eagle Ford basin and 23.5 percent will allocate funds to the Gulf of Mexico.


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