Increasingly, it is described as the biggest challenge facing companies in the Permian Basin. Recruitment and retention of qualified personnel is high on everyone’s list. High on energy companies’ lists and—because of that boom—high on the list of all other industries and services across the Basin regions of Texas and New Mexico. Here’s how to compete and win in the task of… getting and keeping people.
By Lana Cunningham
“Hiring contract. Experienced oil and gas landman. You MUST have experience. No training available. Lodging is NOT provided nor reimbursed.” So reads one of many job postings on Craigslist.
The front pages of West Texas newspapers often display colorful sticky notes advertising hiring events at various local hotels by petroleum industry companies seeking people for such positions as roughneck, well tester, and laborer, just to mention a few. In addition to newspaper ads, signs in front of companies stating “Hiring Here,” or social media sources such as LinkedIn and Career Builder, human resources personnel are resorting to every outlet possible to find people to fill the hundreds of positions in West Texas. And then there’s the oldest resource in the business that still proves very successful—word of mouth.
Month after month, Midland and Odessa rank in the top 10 nationwide with the lowest unemployment rates. Compared to many other parts of the country, this is great news. But it’s a headache for human resources people trying to fill all the open slots with qualified people. And once a position is filled, the HR staff battles the constant onslaught of inquiries from headhunters trying to lure away professional employees.
West Texas employers are trying to operate in an environment filled with a conundrum of problems: not enough qualified people to hire; people who jump ship to another employer for more money; a lack of low-cost housing; and a high cost of living.
Three people talked about the situation from different angles: Jane Williams who operates Snelling Staffing Services; David Meek with Concho Resources; and Vicki Byars, who has found her niche of operating as a consulting HR company.
“Challenging” is the phrase many hiring professionals use to describe the employment climate.
Some companies are looking at locating to larger cities where they can find a bigger pool of professionals. Parsley Energy announced in April it is moving to Austin. Colin Roberts, Parsley’s general counsel, told the media the corporation “has faced significant recruiting challenges in Midland, particularly with respect to certain executive positions and technical employees like engineers and geologists.”
At this point, Parsley Energy stands in the minority as other firms incorporate changes to entice people to the Permian Basin.
“Attract. Motivate. Retain. That’s what a human resources person does,” said Meek, HR director for Concho Resources in Midland.
“Our biggest challenge is finding good people in a competitive environment with 2 to 3 percent unemployment,” Meek said. “We have 70 to 90 positions open at one time. These range from field positions to geologists, engineers, pilots, and administrative support.” The best place to find what positions are open is to go to to conchocareers.com, he said. The resumes are reviewed as they are submitted and hiring managers bring in the applicants for interviews.
As a person in charge of hiring, Meek considers the company’s “value proposition. Why would it be valuable for someone to come to work at Concho?” He described those values as “excellent benefits, a solid compensation package, and amenities for the employees as part of the company’s value proposition. Then it becomes branding. We have to market ourselves to people and it’s a process in getting the word around. We use Internet sites like LinkedIn and Indeed.com.
“We have a referral program that is our No. 1 way to find people. Good people know other good people and they tell their friends about openings here. Those employees who bring in someone that is hired are rewarded for finding those people,” Meek said.
Snelling Staffing Services has been located in the Permian Basin since 1969, and Jane Williams has owned her Odessa-based franchise for 30 years. “We are a full-service recruiting service, hiring people in industrial, clerical, administrative, and professional positions,” she said. Her firm serves as the HR arm for numerous companies, putting together job descriptions, advertising for the positions, interviewing applicants, and handling background checks and drug testing.
Williams listed her challenges as educating a company about the need for higher pay and crossing her fingers that the applicants pass the background checks and drug tests.
“We’re also having a problem with some of the companies trying to retain the people that we do find. Some companies are not aware of the high oilfield salaries. When they say the salary range is $8 to $9 an hour, we say, ‘Can we talk a minute?’ For some small businesses, raising the salary is a challenge for them. It raises their costs. When someone comes in wanting to hire a skilled person for $10/hour we ask why are they only paying $10/hour. It’s a challenge for us to find someone who will come and work for a company at that rate. A lot of companies now have raised their unskilled and industrial employees’ salaries.
“Someone fresh out of school won’t stay long at one of these places,” Williams said. “As soon as they get some experience, they leave.”
In some cases, the employees don’t stay long after a couple of paychecks. “Some people run home on weekends and don’t come back,” she said. “Getting people to show up for work sometimes is the biggest challenge.” And then there are people constantly looking for better hours or more pay—people who will shift to different jobs quickly. “They will jump ship for $1 an hour more. That’s why some companies are paying better wages to keep these employees,” Ms Williams said.
Like Concho’s Meek, Snelling Personnel relies on the Internet, social media sites and the old-fashioned word of mouth. “We are using social media to seek the more skilled people,” she said. Among the sites Snelling uses are Facebook, LinkedIn, Monster, and CareerBuilder. “People see us on the Internet and in advertising. We also have a lot of clients who tell applicants to ‘go see Snelling.’ It’s word of mouth.”
Williams explained that many companies use Snelling to weed out the applicants and perform the tasks that an HR department would do.
“We test people and make sure they have the skills for that company position. We don’t just throw warm bodies at these companies. We want to match them for the right job. We do the background checks and drug testing. Our goal is for these employees to become full-time at the company.”
In the meantime, Snelling handles workmen’s compensation insurance and the unemployment claims.
“We’re still doing things at the same prices we did them 20 years ago,” she said. “We have the same challenges and still have to pay the light bill. Workmen’s comp is a big cost factor in the staffing world, and in any industry. We take that burden and risk on that person until the company wants to hire them full time. We also take the unemployment claim burden. The cost factor for us is up.”
That also means Williams and her staff are available 24/7 to handle situations that may arise. “Our phones are connected in case clients need to get in touch with us over the weekend.”
After working in the human resources field for 18 years, including a stint as department director at Concho, Vicki Byars saw a market that wasn’t being met. In January 2014, she left Concho and started The Byars Group, LLC. “My target market is the smaller exploration and production companies who are wondering how to compete for employees.
“I do not do recruiting. I help these companies set up an HR system. I help them with vendor procurements, looking at benefit plans and what makes the most sense for them, and writing employee handbooks. Some clients keep me on retainer so if an HR situation comes up, I can advise them,” she said.
After working in the E&P field for almost two decades, Byars says she brings a different perspective to the HR field as a consultant. That includes recognizing areas where companies could begin making changes to maximize their employees’ talents and needs.
“Companies are beginning to see that some skill sets are transferrable,” she said. “People have certain skills that can be used in different jobs.
“With an unemployment rate of 3 percent—when 5 percent is considered full employment—one of the biggest challenges for companies today is to keep the current staff and ensure their pay is equitable.”
With companies often facing short staffs throughout the Permian Basin, the employees are working overtime and doing extra work.
“People are asking, ‘How many hours am I having to work because we are so short staffed?’ These employees will burn out. Employers need to recognize their employees need to be taking time off and getting their vacation days,” Byars noted.
In many companies, retention depends on supervision, she added. “People do not leave companies. They leave their supervisors. It’s very important that companies put the right people into supervisory roles. Those people should be able to understand the employees and help to motivate and get the best work out of them. These supervisors have to be trained.”
Benefits also play an important role in making a company competitive and in keeping employees. A firm’s benefits have to appeal to a wide age and needs range: from those who just graduated from college to those who have children to those who are nearing retirement age. “Design your benefit plan to meet all those demographics. There are also regulatory challenges for companies to make sure the benefit plans are in compliance.”
Drawing from her experience, Byars sees some ways to meet some of HR challenges. Some will cost, some won’t.
“What I’ve seen that has been very successful are alternative work schedules. This allows employees to work four nine-hour days a week and then take half a day off on Friday. Or they opt for a full day off every two weeks. Employees love it. They are good at looking at the work that needs to be done by Thursday evening and they get it done. This plan doesn’t cost companies anything.”
Another idea is to entice people nearing retirement to stay on a part-time basis. “They could work three to four days a week or just on specific projects. They could use their skill sets in a shorter time frame” and still have time for traveling or doing other activities they had planned for retirement. “These people have a great set of work skills but no longer want to work 40 hours a week,” she explained.
There is a gap in people experienced in oil and gas work. As the 50-60 year olds retire, the next major age group is the 30 year olds. “It’s scary to think of all these 50-60 year olds walking out,” she said.
This is an option that Concho has started utilizing, according to Meek. “We have some retirees coming back part time,” he said.
A third option for increasing the number of employees is to use engineers out of Dallas or Houston to work on specific projects. “They don’t occupy desks at the office here and work only on a defined scope of work. Some companies are beginning to tap into the technical skills available in Dallas or Houston,” Byars said.
“Companies need to open up their thought process. People can work for you without being in the office every day.”
She also suggested the idea of having a satellite office in areas where more professional people can be found, “instead of having everyone move to Midland. Our infrastructure out here is having a hard time.”
All three people in the HR business noted a major problem in hiring is the housing market. The Odessa Chamber Economic Development Department released an apartment survey in July 2014. Average cost to rent a one-bedroom apartment in that city was listed at $835, as opposed to $779 one year ago. That same apartment cost $512 four years ago.
“Our big challenge is to make sure they have a place to live when they come here from out of town,” Williams said.
Even if the housing costs were lower, some HR spokesmen realize that isn’t the only factor in keeping good employees. As Meek with Concho said, employees are looking at what the company offers them.
The company announced in July a plan to add another building to its headquarters in downtown Midland to include a day care center, fitness center, and full-service cafeteria. It is expected to open sometime in 2016.
“This expansion will be adding a level of value proposition,” Meek explained. “I believe Concho is the employer of choice in Midland” and these additions would help retain that position. “There are a lot of great companies to work for in Midland and I believe Concho is one of the top ones.”
Even so, Meek acknowledges that his company’s engineers and geologists are contacted repeatedly by headhunters. “This is a very competitive environment and I know their phones are constantly ringing. We want to create an environment that people want to stay and work in.”
Byars added, “People need to consider if they want to go elsewhere if that place will be as good as they hope.”
Meek finds that working in human resources some days can be a marathon. “You have to juggle a lot of things. We have to come to work with our track shoes on,” he said with a laugh.
Lana Cunningham is a freelance writer who has lived in Midland since it was a pleasant city of 60,000 people.