SEED Plan for Mining, Quarrying, and Oil and Gas Extraction
In this article, we discuss the various functions and types of Mining, Quarrying, and Oil & Gas Extraction companies, prevalent trends in their employment patterns, and average salaries.
The Mining, Quarrying, and Oil & Gas Extraction industry belongs to the supersector of Natural resources and mining. Coal, oil, and gas being the primary sources of fuel and minerals having applications across varied industries; this sector plays an important role in strengthening the economy. The oil and gas industry alone is one of the largest revenue generators globally contributing $3.3 trillion in annual revenues. Geographically the top oil and gas production hubs are the United States, Saudi Arabia, Russia, Canada, and China.
Mining, Quarrying, and Oil and Gas Extraction Companies
Mining, Quarrying, and Oil and Gas Extraction companies form the foundation of power generating operations. As of 2020, there were close to 32,000 private establishments in the US while Government operated institutions were 7 in number. In terms of employment, this sector has been quite profitable as well.
As of December 2020, employees on average worked 45 hours a week and earned $35.52 per hour on average. Let’s take a closer look at the various functions of this sector
What do Mining, Quarrying, and Oil and Gas Extraction companies do? Why are they important?
Mining, Quarrying, and Oil and Gas Extraction companies primarily deal with the extraction and processing of naturally occurring minerals. This includes coal, ores, liquid minerals, and natural gas. ‘Mining’ as a term, on the whole, includes all activities at mines such as quarrying, well operations, crushing, screening, washing, flotation, etc.
This industry operates at four levels:
- Exploration: The most important activity is to look for feasible mining sites. This takes careful explorations, sampling, and thorough research before finalizing the one.
- Mine construction: Once a suitable mine is located, work goes underway to create the necessary infrastructure. Mines are usually located in remote areas and considerable construction work is involved to set up the entire supply chain. This also involves gathering the necessary paperwork such as permits and refining mine plans.
- Mine operations: Once a mine is vetted for all the necessary safety measures and documentation, ores can be mined to extract and produce metal.
- Mine closure: Once the mine has been extracted to its fullest capacity, the mine closure process begins. This too has a methodical approach that involves cleanup, reclamation, and environment monitoring.
Forecast for the Mining, Quarrying, and Oil and Gas Industry
The forecast for the mining industry looks promising, with an expected annual growth rate (CAGR) of 12.4% in 2021, as reported in the ResearchandMarkets reports. These figures are further supported by strong growth forecasts by Interindustry Economic Research Fund, which predicted growth in the mining sector of 16.8% in 2021. These reports show the continued reliance on this sector within the market, and the potential growth for companies in the coming years.
Types of Mining, Quarrying, and Oil and Gas Extraction
The Mining, Quarrying, and Oil & Gas Extraction industry has various stages to it. Each one of them is quite labor-intensive and requires extensive infrastructure to support it. Thus it is a natural trend for companies in this industry to specialize in select sectors. The three main sub-sectors of this industry are:
- Oil and Gas extraction: Mostly operated by private companies, this sub-sector can be categorized into three functions:
- Upstream: This category includes exploration and production companies. Their job is to find fuel reservoirs and drill oil and gas wells.
- Midstream: This category of companies is responsible for transporting oil and gas from the reservoirs to refineries using trucks, ships, and pipelines.
- Downstream: These companies operate the final leg. They take care of refining and sales of the finished products.
- Mining: This sector takes care of coal mining, metal ore mining, and non-metallic mineral mining and quarrying. They are mostly operated by private companies as well.
- Support activities for mining: The companies of this sub-sector are responsible for all the activities that support the mining sector. This includes functions like collecting samples, geological observations of prospective sites, etc.
Mining, Quarrying, and Oil and Gas Extraction Industry Statistics
By number of firms:
|# of employees||Average||2017||2016||2015||2014||2013|
Most firms in the Mining, Quarrying, and Oil and Gas Extraction industry have employees in the range of 0 – 9. Over five years between 2013 and 2017 the industry was consistent with an average of 71.94% of firms showing this trend. This was closely followed by an average of 10.85% firms having 10 – 19 employees and 8.78% firms having 20 – 49 employees which formed the second and third largest pattern of employment. On average, a mere 1.81% of firms employed more than 500 employees.
It is evident from this data that nearly 72% of firms in the Mining, Quarrying, and Oil and Gas Extraction industry employ less than 10 personnel.
By number of employees:
|# of employees||Average||2017||2016||2015||2014||2013|
The Mining, Quarrying, and Oil and Gas Extraction industry workforce is concentrated in companies with more than 500 employees each. This is almost 59% of the industry. The rest of the workforce is distributed in other companies, the least being in firms with 10 – 19 employees. With an average of 8.93%, firms with 200 – 499 employees form the second largest group.
As a whole, the workforce of the Mining, Quarrying, and Oil and Gas Extraction industry is concentrated in firms with more than 500 employees. Thus these larger firms would choose ESOPs in the Mining, Oil and Gas extraction industry for a larger pool of employees.
Top Jobs/ Average wages per job:
|Sample Size||Employment %||Avg. Salary||Avg Salary||Avg Salary|
|Construction and Extraction Occupations||279,930||40.90%||$52,030||$52,290||$52,370|
|Transportation and Material Moving Occupations||82,580||12.07%||$49,220||$48,410||$47,330|
|Derrick, Rotary Drill, and Service Unit Operators, Oil and Gas||76,400||11.16%||$51,480||$52,100||$52,440|
|Installation, Maintenance, and Repair Occupations||59,920||8.76%||$57,820||$56,480||$55,480|
|Office and Administrative Support Occupations||50,130||7.32%||$44,440||$43,860||$43,410|
|Roustabouts, Oil and Gas||50,070||7.32%||$41,220||$40,370||$40,250|
|Construction Trades Workers||49,930||7.30%||$48,740||$49,050||$49,210|
|Service Unit Operators, Oil and Gas||45,020||6.58%||$50,320||$51,870||$52,730|
|Motor Vehicle Operators||41,840||6.11%||$46,800||$45,050||$44,190|
|Driver/Sales Workers and Truck Drivers||41,670||6.09%||$46,840||$45,060||$44,220|
|Heavy and Tractor-Trailer Truck Drivers||40,820||5.96%||$46,920||$45,170||$44,380|
|Other Installation, Maintenance, and Repair Occupations||36,740||5.37%||$54,240||$53,480||$52,250|
|Architecture and Engineering Occupations||35,290||5.16%||$117,870||$117,050||$116,140|
|Material Moving Workers||34,220||5.00%||$47,120||$47,640||$46,400|
|Business and Financial Operations Occupations||33,730||4.93%||$86,730||$85,310||$84,610|
|First-Line Supervisors of Construction Trades and Extraction Workers||33,420||4.88%||$79,740||$82,130||$82,550|
|Construction Equipment Operators||29,220||4.27%||$48,950||$48,650||$48,730|
|Operating Engineers and Other Construction Equipment Operators||28,980||4.23%||$49,000||$48,720||$48,830|
|Industrial Machinery Installation, Repair, and Maintenance Workers||22,430||3.28%||$57,460||$57,130||$56,440|
|Life, Physical, and Social Science Occupations||21,270||3.11%||$91,700||$95,540||$97,470|
|Other Production Occupations||21,190||3.10%||$45,680||$44,260||$44,370|
|Rotary Drill Operators, Oil and Gas||19,580||2.86%||$56,330||$55,630||$54,880|
|Business Operations Specialists||18,740||2.74%||$85,310||$82,060||$81,700|
|Industrial Machinery Mechanics||17,940||2.62%||$58,360||$57,790||$57,650|
The classifications for these occupations often overlap one another, so total employment size % may result in a larger number than 100% for all jobs.
This data provides a snapshot of the employment and salary trends in the Mining, Quarrying, and Oil and Gas Extraction industry. It is based on a sample size of 684,390 employees between 2016 and 2019. The average salary in this sector was $64,370 in 2017. This rose slightly in the next two years and increased to an average of $65,860 by 2019. The top five functions of employment were:
- Construction and Extraction Occupations
- Extraction Workers
- Transportation and Material Moving Occupations
- Derrick, Rotary Drill, and Service Unit Operators, Oil and Gas
- Installation, Maintenance, and Repair Occupations
Construction and extraction occupations showed a 40.9% employee engagement with an average salary of $52,030 in 2019. But in comparison to 2017, there was a 0.65% decrease in the average salary of this category.
While on the other hand, Extraction workers of the Mining, Quarrying, and Oil and Gas Extraction industry accounted for 28.34% of the total employment. The average salaries of this profile rose by 0.61% between 2017 and 2019.
Transportation and Material Moving Occupations however displayed a 4% rise in average salaries between 2017 and 2019. Though being the third-largest employee function with 28.34% of the workforce engaged in this profile, this section demonstrated an upward trend in salaries.
The next employee category in the Mining, Quarrying, and oil & gas extraction industry is the Derrick, Rotary Drill, and Service Unit Operators, Oil and Gas profile. This forms 11.16% of the total employment in this sector. However, between 2017 and 2019, this profile posted a 2% dip in average salaries.
The fifth function in the top 5 job profiles is the Installation, Maintenance, and Repair Occupations forming 8.76% of the total workforce. Though fifth in line in terms of employee engagement, this segment posted a growth of 6% in average salaries.
Almost all profiles demonstrated an upward salary trend except:
- Construction Trades Workers
- Management Occupations
- First-Line Supervisors of Construction Trades and Extraction Workers
- Life, Physical, and Social Science Occupations
- Top Executives
Of these, the profile of Top Executives suffered the most. In 2017 the average salary of this profile was $149,590. This dropped by almost 5.15% by 2019 reaching an amount of $141,880.
ESOP in Mining, Quarrying, and Oil and Gas Extraction
One of the finest ways to ensure employee engagement and accountability in the company is to offer them stock options. Employee stock option plan or ESOP is a remuneration strategy specially designed for this. ESOP for employees in the mining industry is catching up as a way to retain and motivate employees for the long term. This is usually offered as part of retirement benefits.
Why is offering ESOP a better option for Mining, Quarrying, and Oil and Gas Extraction companies?
The Mining, Quarrying, and Oil & Gas Extraction industry involves an array of job profiles that are mostly based in remote locations. Apart from working unearthly hours, staying away from families for long durations is common. Besides, the risk profile is high in these jobs as well. Though as an industry this sector generates heavy revenues, employees find it difficult to connect with these revenues while working for hourly /contractual payouts. All of these factors contribute to diminishing employee engagement in this sector.
To ensure that employees stay motivated and consider their hard work as a direct investment in company profits of which they are stakeholders as well, ESOP for employees in the mining industry is a good offering as part of remuneration packages. A certain number of shares are issued on the achievement of a milestone. These vest over a certain time. Thus employees see value in investing their time and hard work in the company. As the company grows and expands, share prices accelerate. Since most ESOPs are part of retirement benefits, employees sell their shares on maturity and retire with substantial profits.
SEED by Eqvista – Plan for Mining, Quarrying, and Oil and Gas Extraction
Eqvista is one of the leading equity management software companies. Eqvista’s advanced features cater to an entire range of activities involved in issuing, tracking, and managing company equity. SEED by Eqvista is a recent offering. SEED stands for Simple employee equity development. It is a customized ESOP for companies ranging from a startup to a mature corporation.
SEED proposes equity rewards for entry-level employees in the form of 100% time based. Meanwhile, it suggests offering a combination of time based and milestone bassed in varying percentages for medium and senior-level staff. All of these equity rewards are subject to a vesting period of 3 – 4 years with a one year cliff. SEED proposes the employee pool to be around 10% for startups ranging up to 20% for mature companies. Milestone schedules are included as well.
Start a SEED plan for your Company
Equity is an important currency for employing talent on one hand and attracting investors on the other. A cap table created on a simple excel sheet works for startups. But as the firm grows and equity distribution becomes necessary for various stakeholders, automated software like Eqvista becomes an important tool.
Eqvista offers a range of services that address all equity needs of companies of varying sizes. Besides, owing to the automation, company equity can be easily handled with minimal errors and customized access. These articles offer a comprehensive view of Eqvista’s services, including our 409a valuation services and cap table management software. To know more about Eqvista and for a trial run of the software reach us today.