Pillars of Industry

Analyzing Career Alternatives Reduces Decision Risk

Oil prices have exceeded U.S. $30/bbl for more than 2 years. Because we are confident that higher prices are not the exception to the rule, young engineers will be less concerned about being employed and will pay more attention to planning their career growth and analyzing their choices. In fact, many engineers currently are faced with multiple options when considering a career change. This can be true whether considering changing companies or changing positions within their companies.

Science tells us that the human brain makes decisions based more on emotion than previously thought. However, logically understanding the risks associated with making a career change is critical to making a sound decision. Employing a solid process that incorporates the effects, benefits, and risks of each option will go a long way toward reaching the best decision.

When you are making a decision about a new position, there are four key areas to consider that have an effect on you, your family, your extended family, and your community of friends and acquaintances. Some of these key areas affect only you, and others affect the people around you. But all of them are important and should be carefully considered. These areas are compensation, career path, work environment, and home environment.

Understanding Compensation

While many factors enter into an employment decision, compensation is one of the most important. And, while it is relatively easy to quantify most elements of a compensation package, some factors are uncertain. These components are particularly important when comparing very different opportunities, such as a technical position with a very large company and a broader technical/managerial position with a much smaller company. Here are most of the basic elements of compensation:

  • Base salary.
  • Sign-on bonus.
  • Performance bonus.
  • Technical training.
  • Tuition assistance.
  • Overriding royalty.
  • Stock purchase plan.
  • Stock options or participation.
  • Disability insurance.
  • Life insurance.
  • Medical insurance.
  • Dental insurance.
  • Vision insurance.
  • Vacation and holidays.
  • Savings [401(k)] plan.
  • Pension plan.

Base salary is the first component of compensation; it is easiest to understand, but it also can have uncertainty. No job is without risk, as the last 20 years in our industry have proved. Different companies and positions have different levels of risk, and that is important in making a comparison. For example, a startup company may be willing to offer a higher salary and participation in revenues or profit, which for some of us is a great thrill, but statistics show that as many as 55% of new companies do not survive past 4 years. On the other hand, a major oil company that has been successful for 100 years is unlikely to go under, though it may indeed downsize.

Bonuses are another significant element of compensation. The sign-on bonus is money in hand now, and money has a time value. A U.S. $25,000 bonus paid today will grow to more than $80,000 in 30 years at a 4% rate of interest. If it can be invested at 8%, the same bonus will grow to $250,000.

Though important, insurance is generally not a major financial contributor to the overall compensation. Most companies offer some kind of insurance. Most pay for the employee’s coverage, and many also pay for family coverage. Life insurance is a relatively small cost, even if you purchase it yourself. A 30-year-old can buy U.S. $250,000 of coverage for $250 per year. On the other hand, medical insurance for an entire family will cost about $18,000 per year.

When we are young, we are not thinking about retiring; we want to get going. But those savings plans and retirement plans bear some close analysis. Engineers should “do the math!” Check out these examples:

A savings plan at a large company contributes 2% of each employee’s salary for the first several years, growing to 10% per year after a 10-year period. If, through promotions and raises, an employee who begins at U.S. $100,000 annual salary averages a 7% annual increase and invests the money at the current 4% rate of interest, the savings after a 30-year career would grow (untouched) to $2,500,000, which is worth about $800,000 today.

A pension plan at a large company contributes on an escalating percentage beginning at a similar percentage, increasing every few years until 16% of the salary plus bonuses is being contributed. The lump-sum distribution after 30 years for the same assumptions as above will be an additional $2 million.

Finally, a small, relatively new company of 20 employees sets aside 3% of its revenue as a shared pool for key employees. Although high risk, the company revenues from oil and gas sales total $20,000,000 the first year, and drilling success grows it at 20% per year. At the end of 30 years, this employee takes home $21 million! Of course, there is a great deal of uncertainty associated with this story.

It is easy to evaluate the quantifiable aspects of an offer, but it is more difficult to quantify the risks. However, even if, as in the business of oil and gas, the risks are subjective, the attempt to quantify and compare will be of enormous value in making the best decision.

Directing Your Career Path

Lewis Carroll was recognized as a great mathematician in addition to being a great author. He wrote this insightful passage: “One day Alice came to a fork in the road and saw a Cheshire cat in a tree. ‘Which road do I take?’ she asked. ‘Where do you want to go?’ was his response. ‘I don’t know,’ Alice answered. ‘Then,’ said the cat, ‘it doesn’t matter.’”

Knowing at least the direction we want to go is fundamental to any career decision. Each person’s career path can be compared to climbing a large oak tree. It is very easy to see where you start, but hard to predict accurately on which branch you will find yourself when you reach retirement. We each guide our own career growth and direction by making choices. We increase our knowledge through additional education and training, and we gain experience by taking on new positions and additional responsibilities. But with each choice, especially with each career advance, there are risks associated with climbing to the next level. The major risk is that the number of your future options decreases as you climb that tree and see an ever diminishing number and size of branches ahead. About this, author David Campbell wrote, “Sooner or later, you will realize that the greatest tragedy in life is to have no options, to have no choices. Consequently, when you are planning your future, you should plan it in a way that will give you some choices, and this approach is particularly important if you aren’t really sure right now what you want to do.”

There are plenty of career paths in every discipline in our industry, which means there are important choices to make. There are technical and management paths, international and domestic locations, specialist and generalist options. We can pursue exposure to the front edge of technology, such as unconventional gas recovery, deepwater projects, ultradeepwater drilling, and seismic acquisition and processing. We can direct our attention toward the business and commercial aspects of the industry. Different companies—producer and service, large and small, integrated and independent—offer different choices. It is important to evaluate both the number and type of potential paths in an organization when you are making career choices.

Knowledge increases options, and learning is an individual responsibility. However, a company can help you grow by providing opportunities to learn from mentors, on-the-job training, and technical education. These learning opportunities should include targeted employee training that develops:

  • Technical skills necessary to perform all of the positions at the company within your technical and business area.
  • Technical skills that are outside of the company’s current needs, but are of particular interest to you and your future career.
  • Nontechnical skills to improve your ability to communicate, to work in a team, and to have the confidence leading to future success in your professional and personal lives.
  • Your knowledge outside of business for personal growth.

Choosing the right type of experience to get you where you eventually want to be is also an individual responsibility, and that is the ultimate choice. Finding the place and position that will afford you your own selected path requires study and investigation as well as serious introspection.

Changing Your Work Environment

When you change positions, you move away from a work environment you know and understand to another one that is difficult to predict. Recognizing and accepting the existence of this risk is essential to a successful job transition. In almost any job change, even within the same company, you will work with different people and report to different managers. You will probably have changes in your physical work environment, such as more space or less space, a different computer, open or closed office, different proximity to the support staff, and access to the coffee pot. You may move from a position working alone on technical tasks to one that requires team contributions. You may move from the field to the office or the other way around. You may have more or less exposure to the industry in general. You may spend more of your time in meetings and less in technical analysis.

If you change companies, you may find a different culture, a different vision, different leaders, and a different pace; there is risk of a misfit. All of these factors can have positive or negative effects. Reducing risk is reducing uncertainty; do that by listing the environmental issues that are important to you and comparing their existence in different opportunities.

What is the parking like? Are there health facilities? These and other seemingly minor questions should be asked and answered. We spend most of our waking life on the job, so the environment, including the people, is a major element to consider.

Changing Your Home Environment

Every change requires adjustment. When you change positions, locations, or companies, there will be immediate and long-term effects on you, your family, and your friends. Identifying and evaluating the positive and negative impacts in advance are vital to making the best decision. And allowing the people in your life to be part of the process is a good start. Demands on your time, effects on your personal and family well-being, and effects on your outside interests are elements to be considered.

As with oil, time is a nonrenewable resource and our most precious commodity.

  • Does the new position increase or reduce time with the family?
  • Will this change affect your commuting time?
  • Will you work more or fewer hours at the office or be able to work more at home?
  • Is travel involved?
  • Is there a rotating schedule?

Change can affect your personal health and your family’s well-being. Ask yourself and others how they feel about potential changes in these areas:

  • Does your new position require more eating away from home?
  • Will it be easier to find time to exercise?
  • Are there company programs that will make it easier to be healthier?
  • Will the better or worse political situation be more stressful?
  • How are the schools?
  • Are good hospitals nearby?
  • Is the job in an area prone to natural disaster?
  • Will we have more or less domestic help?
  • Will there be opportunity for social interaction for the family?
  • How often will we see our relatives?

And outside interests sometimes provide the balance that charges your professional life.

  • Will it be harder or easier to get to the children’s events?
  • Will my business travel keep me from attending my favorite charity’s monthly meetings?
  • Will we vacation more or less often?
  • Will it be harder or easier to find time for my favorite hobby?

All of these things will show up as pluses and minuses after the decision is made and will affect those you most care about.


The decision to make career changes is never easy, but we certainly welcome those opportunities, rather than not to have choices. The uncertainties of all of our options, including selecting one opportunity over another or deciding not to change at all, can be understood using a systematic approach: the engineering method. Conduct a systematic analysis of the impacts in all of the areas above and their risks before the decision is made.

Cheryl Collarini began her career as a civil engineer with Mobil Oil and advanced through positions as operations engineer, development projects engineer, reservoir engineer, and reservoir engineering supervisor. In 1985, Cheryl resigned from Mobil to begin a consulting practice. Specializing in reserve appraisal for the purpose of transactions, borrowing, and investment decision-making, Collarini Engineering grew to its present size of about 20 employees with offices in Houston and New Orleans. In 1995, she founded Collarini Energy Staffing to provide technical staff to customers who need help managing their own projects. From its Houston headquarters, Collarini Energy Staffing recruits and places upstream oil and gas professionals, temporary and fulltime, in positions all over the world. Collarini earned a BS degree in civil engineering from the Massachusetts Inst. Of Technology and an MBA degree from the U. of New Orleans.
Claude Thorp is Vice President in charge of all engineering staffing at Collarini Energy Staffing. He joined the company in August 2001 following a 25-year career in both the oil and gas and staffing industries. His experience includes onshore exploration and production management, leasing, finance, banking, and staffing for both information technology and energy companies. He earned bachelor of business degree with a major in finance from The University of Texas at Austin. He is a Certified Temporary Staffing Specialist and is a member of several energy industry organizations, including the SPE where he currently serves as the Career Management Chair on the SPE Gulf Coast Section Board of Directors.




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