Editor Greg Ettling's "For Openers" column discusses the results of a salary and benefits surveyNational Drillerconducted

Drilling contractors need to charge the full value of their services.
There’s this guy who’s been a drilling contractor for 26 years. He runs a sole proprietorship with two drill rigs and seven employees. His salary is $55,000 this year, and there’s a decent chance that salary will increase – perhaps significantly – in 2004.

You probably know a guy just like him; you yourself might be just like him in those respects. And that would make sense because when you take a look at the numbers from a recent survey, that’s the typical scenario in this industry.

As promised on this page back in July, our inaugural “Drilling Contractor Salary/Benefits Survey” has been completed. Here we present some of the highlights of the study. A full report, which has been cross-tabulated and broken down eight ways to Sunday, is available for purchase; look to our Web site for details.

Forty-three percent of respondents expect to increase wages and salaries in 2004.

Titles and Salaries

Drilling contracting firm owners and presidents (interchangeable terms in most cases) both report a median salary of $50,000 for 2003. The mean salaries for owners and presidents are $61,762 and $60,724, respectively. Even the few who reported their incomes as an hourly wage were in line with those numbers. The median hourly wage for both owners and presidents, just like their salaries, were identical at $20 per hour.

When it comes to drillers and other service personnel, the mean salary is slightly more than $37,000, while the mean hourly wage is $15 an hour. When you divide that $37,000 mean salary by 2,000 hours, you get $18.53. It comes as no real surprise that the drillers and other service personnel with more experience are on salary, taking home more money in their paychecks than newly hired wage earners.

Other job titles and their mean salaries: vice president ($57,000), salesperson/estimator ($60,365), driller’s helper ($26,129) and office manager ($29,497).

Most contractors are sticking with their current benefits packages.

Employee Benefits

Over the past year, the vast majority of drilling contractors (79%) saw no changes in the benefits packages they offer to employees. Fourteen percent report that their benefits package increased (matching 401k contributions rule!) and a mere 7 percent said that their benefits package had shrunk. Softening that blow is the fact that many packages are being streamlined. A company can drop unused or underappreciated benefits with little negative backlash – few people will truly miss the free annual cholesterol screenings. So some of that decrease actually could be attributed to a more efficient or more pragmatic coverage package.

The outlook for next year is quite similar. Eighty-five percent of drilling contractors expect no change in their benefits packages for 2004. Eleven percent anticipate an increase in benefits and just 4 percent see a decrease coming.

A small boost in hiring is expected for next year.

On Hiring
And Firing

The employment situation has been relatively flat, but things are looking up. Three-fourths of respondents reported that they filled vacancies on their staff in the past year, but didn’t add any new positions. While 14 percent said they had added positions in the past 12 months, 12 percent had been forced to go ahead and eliminate positions.

Looking ahead to 2004, drilling contractors expect to see some increased action on the hiring front. Again, three-quarters of respondents tell us they will fill any vacancies they have, but won’t be adding staff. Nineteen percent say they are looking forward to creating new positions, and just 6 percent say that they will be eliminating positions within their firms.

Trends in Salaries

Overall, changes in average wages and salaries increased for 40 percent of respondents and decreased for 6 percent of respondents, with 54 percent reporting no change. When asked to look ahead, it was more of the same. Forty-three percent of respondents predict an increase in wages and salaries and 2 percent are looking at a decrease, with no change predicted by 55 percent.

So that’s mostly good news for the industry as a whole. Somewhat dampening the enthusiasm reflected by these numbers is the industry’s lamentable practice of contractors leaving too much money on the table during bids and negotiations. If contractors took that money and invested it in their employees, their operations would be that much stronger and their firms healthier.