Canton Regional Chamber of Commerce

April 11, 2012

Serving the Marcellus and Utica Shale Plays

Attracting and Keeping Talent

Agenda• Introductions• General US and PA Employment Trends • O&G Job Growth• Difficulties You May Face in Finding and

Keeping Your Key Talent• Some Good News• Where You Can Find Help• Q & A

Six member firms made up of over 50 seasoned professionals, with offices located throughout the Appalachian Basin

Akron, Columbus, Medina, Steubenville and Warren in Ohio Cranberry, Johnstown, Pittsburgh, Southpointe and State College in PABridgeport, Charleston, Morgantown, Parkersburg and Wheeling in WV

Raleigh, NC — Sewell, NJ — Elmira, NY — Dallas and Houston, TX

Deep Experience In Serving the Entire Oil & Gas Supply Chain

Acquiring

ManagingOptimizing

The Single Complete Source for Talent and Organization Solutions

Do you have the talent you need to grow and succeed?

Getting Your Talent

• Finding Them • Attracting Them• Screening Them

• Training Interviewers• Reference Checks• Pre-hire Tests &

Assessments• Orientation &

On-boarding• Employment

Contracts

Managing Your Talent

• Wage & Salary• Incentive Plans• Policy Manuals

• Employee Handbooks• Performance Reviews• Performance Coaching• Exit Management

• Severance Packages & Agreements

• HR/Legal Compliance• Back Office Admin

Optimizing Your Talent

• Employee Engagement • Key Talent Retention• Talent & Capability

Reviews• Management Training• Employee Training• Succession Plans• Organization Plans• Growth Plans

• Culture & Change Management

The Single Complete Source for Talent and Organization Solutions

Hiring and Retention Are Mission-Critical For Them!

The Industry’s Talent Barbell

These Hires Are Now

In Their 30’s20 Year Experience Gap

These Hires Are Now

In Their 50’s

Late 90’s Rebound Hiring

1985 – 1995 Minimal Hiring

70’s – 80’s Steady Hiring

And That Makes Hiring and Retention Mission-Critical For You!

Recently Announced Investments

$ 2 B

Minimum Average

Wage

$ 40,000

Assumed Benefits Factor

30 %

Assumed Minimum

Payroll

25 %$ 500 M Projected Payroll

Investment

$ 52,000 Average Compensation Per Employee

~ 9,600 Employees Needed to Staff the Investment

Projected Payroll

Investment

Average Compensation Per Employee

What Happened When O&GCame To Town

(from a PA perspective)

U.S. Unemployment Rate

November 2010 9.3%

December 2011 8.2%

Pennsylvania Unemployment Rates

AreaNovember

2010November

2011Net Change

Pennsylvania 8.2 7.4 -0.8

Allegheny County, PA 7.3 6.4 -0.9

Beaver County, PA 7.4 6.9 -0.5

Butler County, PA 6.6 6.0 -0.6

Fayette County, PA 9.5 8.2 -1.3

Greene County, PA 6.9 6.3 -0.6

Indiana County, PA 7.4 6.5 -0.9

Lawrence County, PA 8.8 7.7 -1.1

Washington County, PA 7.5 6.5 -1.0

Westmoreland County, PA 7.6 6.8 -0.8

Job Growth In the Shale Gas Industry

2010 2015 2020 2025 2030 2035

Direct 148,143 197,999 248,721 241,726 278,381 360,335

Indirect 193,710 283,190 369,882 368,431 418,265 547,107

Induced 59,494 388,495 504,738 512,220 576,196 752,648

Total 601,348 869,684 1,123,341 1,122,377 1,272,841 1,660,090

Direct Oil & Gas Jobs In Demand Occupation 2010 Jobs 2011 Jobs Change % Change

Service unit operators, oil, gas, and mining 42,110 46,766 4,656 11%

Derrick operators, oil and gas 23,323 25,747 2,424 10%

Rotary drill operators, oil and gas 28,116 30,981 2,865 10%

Roustabouts, oil and gas 75,636 82,678 7,042 9%

Helpers, extraction workers 44,303 47,247 2,944 7%

Petroleum engineers 29,063 30,917 1,854 6%

Biomedical engineers 16,065 17,061 996 6%

Wellhead pumpers 24,186 25,616 1,430 6%

Extraction workers, all other 23,423 24,784 1,361 6%

Geological and petroleum technicians 35,304 37,205 1,901 5%

Top Ten Jobs in the U.S.

1. Skilled Trades2. Sales Representatives3. Engineers4. Drivers5. Accounting & Finance

6. IT Staff7. Management/Executives8. Teachers9. Secretaries, PAs, Admins10. Machinist/Machine

Operator

Facts of Life

The U.S. is still wrestling with high unemployment, but…

52% of employers report difficulty filling

open positions.

Facts Behind the U.S. Unemployment Rate

• 17% - No High School Diploma

• 14% - With a High School Diploma

• 5% - With Some College

• U.S. High School Drop Out Rate 30%

• Metro Area Drop Out Rate 50%

Why Are Employers Having Difficulty?

• Applicants looking for more pay than offered • Lack of "hard" job skills or technical skills• Lack of industry or related work experience • Lack of sufficient applicants / no applicants• Applicants don't have the right values and/or mindset • Lack of business knowledge or academic disciplines• Lack of "soft" skills or interpersonal / communication skills

• Drug Testing• Work Ethic/Culture• Unfamiliarity with the business (Dad didn’t do it!)• Lack of safety training and other related certifications• Lack of skills training

What It Boiled Down To In The PA Shale Play…..

At first, it was a mad scramble with everyone trying to get on board to find out what O&G companies were here, where they were, what they needed….no one had the answers or knew where to find them!

The Good News from PA…..

• It’s all started to come together• The O&G companies are better at letting people

know where they are and what their needs are• The local education/training infrastructure has been

gearing up to address industry-specific needs• Local suppliers are learning how to serve O&G

Solutions – Short Term• Know what differentiates you in applicants’ eyes• Be clear about what you expect of them • And what they can expect of you• Determine which skills you should build vs. buy• Realize that recruiting is not a one-size-fits-all process• Ensure your selection process is “effective”• Recruit for talent, not for vacancies • Use every action as a way to build your brand

Solutions – Longer Term

• Use an effective on-boarding process• Ensure you are paying for performance• Identify and retain your high performers • Train your managers to manage effectively• Effectively manage your marginal performers• Don’t organize your staff – staff your organization• Communicate, communicate, communicate

• Your Local Chambers of Commerce• Online resources (e.g., ShaleDirectories.com,

Ohio Shale Coalition, etc.)• OOGA, IOGAWV, PIOGA, etc.• Marcellus Resource Group and other

providers

Local Support Resources

Stark State will soon be offering ShaleNET programs which may include the following:

•Roustabout•Floor Hand (combination of Derrick Operator and Rotary Drill Operator)•Production Technician•CDL•Welder’s Helper

Local Support Resources

They will also be scaling up the following programs:•Welding•Safely – to include SafeLand, First Aid/CPR/AED, OSHA 10 and 40, First Responder, & others •Petroleum Basic Industrial Maintenance•Industrial Hydraulics and Pneumatics for Exploration and Production•Mechanical Drive Systems for Exploration and Production•Drilling Location and Positioning•Rigging•Basic Environmental, Environmental Technician and Environmental Supervisor•Geo-Environmental •Wastewater and Water Treatment

•1-year OBR Certificate in Oil & Gas Exploration & Production Technology •A.A.S. Degree in Oil & Gas Exploration & Production Technology

Local Support Resources

Q & A

To further discuss how we can help your company grow and succeed – just contact:

Bill Thomas at 866.302.9099bill@marcellusresourcegroup.com

Jeff Dressler at 724.562.3197jdressler@marcellusresourcegroup.com