2016 Petrotech ConferenceNovember 2016

Prepared by Aon HewittTalent, Rewards & Performance

Aon Hewitt | Talent, Rewards & Performance

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Global Oil & Gas Industry Trends

Aon Hewitt | Talent, Rewards & Performance

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The Value Proposition to Power Tomorrow’s Growth

Four Bulls of Energy

• Accessible

• Stable

• Affordable

• Sustainable

Build an inclusive

employee value

proposition that

emboldens your

employees to action

Aon Hewitt | Talent, Rewards & Performance

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Abundance of Global Change Requires the Right Talent to Navigate

DemographicCommodity

Prices

Regulatory Legislative

Capital Markets

Operating Costs

Economic Growth

How will this impact

my business

strategy?

How will this impact

my talent strategy?

Do I have the

right talent?

Aon Hewitt | Talent, Rewards & Performance

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Oil & Gas Organizations are Making Adjustments to Be More Nimble

Lower, Volatile Commodity

Prices

Long-Range Business Planning

Capital Investments

People Investments

Efficiency

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Adjustments to People Strategy Investments Has Varied

Feeling the Impact Hit Harder Treading Water

People Investments Focused On:

Redundancies / Limited Hiring

Hone annual incremental spend

Bonus pools redistributed

Facility consolidations

Optimize Spend on Retirement /

Benefit Programs

Optimize Communications and

Talent Programs

Reduce Corporate Allocation

Reduce Field Operations

Hone Annual Incremental Spend

Preservation of Key Talent

Reduce Bonus Pools

Assess Use of Equity Grants

Optimize Spend on All Rewards

Programs

Severance Review

Equity Availability

Leadership Preservation

Payroll Costs

Elimination of Benefits

Pay Freeze/ Reductions

Bonus Pools Eliminated

Significant Layoffs

Balance Sheet and Access to CapitalStrong Weak

Asset PortfolioDiversified Limited

Proprietary TechnologyDiversified Limited

Aon Hewitt | Talent, Rewards & Performance

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Focus on Talent and Efficiency at Center of HR Organizations Adjustments

2 out of 5 oil and gas organizations

Reorganized corporate resources to better serve internal customers

1 out of 3 oil and gas organizations

Altered talent acquisition processes to reduce costs and streamline

1 out of 4 oil and gas organizations

Altered talent management processes to more accurately identify high performers and invested in leadership training to build vs. buy leaders internally

1 out of 5 oil and gas organizations

Increased investment in technology to increase efficiency

January 2016: Aon Hewitt Compensation Planning Update for the Oil & Gas Industry

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Changes in Expected Staffing Is Expected to Stabilize

A. How do you expect to staff in 2017?

Plan to keep current staffing levels 45%

Began or plan to add headcount 31%

Plans for additional cuts 14%

Unsure 10%

October 2016: Grant Thornton Positioning for Recovery

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However, do not expect activity to ramp up dramatically upon uptick ….

A. How would your organization react to a market recovery?

Ready to move quickly when market recovers 17%

Likely maintain current level of activity 52%

Deploy additional rigs 15%

Add drilled but uncompleted wells 1%

October 2016: Grant Thornton Positioning for Recovery

Aon Hewitt | Talent, Rewards & Performance

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Looking Ahead

Craft your story – develop a story that will empower the talent you need to achieve results

Know your talent – Identify, communicate, and reward

Be nimble – challenge resource allocation and ability to drive business outcomes

Refine and remove – Be opportunistic about obsolete or inefficient programs