Further staff cuts possible at 1/3 of oil and gas companies in 2016

A hiring and pay outlook survey shows that 35 per cent of oil and gas companies expect a deterioration of the business that could lead to further staff cuts.

The survey by Hays shows 63 per cent of respondents in the oil and gas industry were forced to make unexpected staff cuts this year because of low oil and gas prices, while only 13 per cent did any hiring.

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While the energy sector began the year with 70 per cent of employers believing they would grow, as the year went on and oil prices stayed low, about 75 per cent of those surveyed experienced a decline in business.

The Canadian Association of Petroleum Producers estimates that 35,000 oilpatch jobs have been cut this year.

There was deep pessimism among oil and gas company employers as they look to 2016, with almost 18 per cent saying they may lower pay during the year. About 42 per cent said salary increases are not likely.

Employers have weak economic confidence, and a very cautious outlook for business activity in 2016, Hays Canada president Rowan O'Grady said.

Poor morale and burnout

The survey found employers were noting declining morale and burnout among people who remain on the job.

Half of employers said they don't expect to hire in 2016.

Oil and gas companies remained concerned about skills shortages in the industry, saying they see many personnel leaving the sector and are worried about hiring in future.

But 2016 will not be the year they invest in recruiting or training, the survey seems to indicate.

"If the price of oil rises, we anticipate Alberta employers will charge full steam ahead, aiming to significantly increase business activity levels. The potential scramble for talent in an already short market should serve as a caution to other employers regardless of sector," O'Grady said.

Although oil woes have reverberated in other parts of the Canadian economy, businesses across most of the country were upbeat, with survey results suggesting that nearly 60 per cent of Canada's employers saying they will grow in 2016. 

In the next 12 months, more than half of Canadian employers will increase salaries by up to 3 per cent.

The Hays survey polled more than 3,300 employers and employees across Canada in October.