The latest quarterly report from theoilangaspeople.com jobs board has found that contractors in the oil and gas industry have experienced the sharpest increase in pay rates than any other sector in the energy industry.
This is great news for umbrella and limited company contractors who have seen pay rates rise by 8% on average over the last financial year, seeing average incomes rise from £73,600 to £80,960.
Even more interesting is the fact that those operating in highly specialist areas of the oil and gas industry will have seen pay rate increases from 6% to 10%. The report further indicated that 83% of those surveyed expect their wages to rise another 5% to 10% in 2014.
Although limited company and umbrella company contractors have benefited from the year on year increases in pay rates, there are concerns from current employers that such drastic rises in pay rates would not be sustainable in the long term. According to the oilandgaspeople.com as many as 70% of employers agree with this.
Some employers such as oil and gas provider Wood Group PSN have already reacted to pay rate fluctuations by cutting their contractor pay rates by 10% from the beginning of June 2014 claiming "escalating contractors' rates are driving industry costs up, which inhibits investment, growth and long term sustainability".
However, although a select few companies have reacted to the pay rate increases, this trend does not show any signs of slowing down. With the demand for skilled labour in the energy industry, the skills shortage in the UK and heavy investment in the North Sea, there is no doubt that contractor's will continue to have strong leverage to demand attractive pay rates.