Employer profile: Schlumberger’s global challenge to deliver staff benefits

With staff in remote global locations, Schlumberger’s benefits task is challenging, says Debbie Lovewell

Unless you are a potential candidate for the TV show I’m A Celebrity, Get Me Out of Here, the opportunity to work in a jungle or desert environment is unlikely to fall within the realm of your career. But operating in exotic locations is all in a day’s work for many of the staff at oilfield services firm Schlumberger.

The company’s large international commuter population live in their home countries but, for several weeks at a time, fly out to join crews based in deserts, jungles, or on vessels.

Employees in 80 countries

Schlumberger also employs a large expatriate community – about 20% of its workforce of more than 80,000 – as well a number of local staff in many of the 80-odd countries in which it operates.

Devising reward and benefits packages to meet the needs of such different staff groups can be challenging. The task is, in part, carried out by benefits manager (home country plans, excluding North America), Sarah Moise, who is responsible for managing local benefits in all the countries in which Schlumberger operates, apart from North America.

Employee motivation and retention are key priorities for the company, she says. “We are very much a people-oriented business.”

Managing the effects of the downturn

One of the people challenges currently facing Schlumberger is how to manage the effects of the economic downturn while retaining key skills within the organisation. Particular difficulties it must overcome include an industry-wide shortage of geophysicists.

This is an important matter because Schlumberger is now focusing on maintaining service quality as it looks ahead to the next year, says Moise. Employee reward and elements such as professional training are key parts of its strategy to achieve this business goal.

Reward packages vary among staff

The way in which employees fit into Schlumberger’s structure determines the make-up of their reward package. Expatriates, for example, receive a package that includes, among other perks, a healthcare plan for themselves and their family members, shortand long-term disability cover, a deferred medical programme, a defined benefit pension scheme, discretionary stock plans, and a profit share scheme.

The company’s international commuters receive a similar package with some slight variations. This group is entitled to a different level of core healthcare cover, must pay to add family members, and the severance package differs.

Recruiting local workers

Attracting and retaining local staff in each country is crucial to Schlumberger, so benefits play a key role in recruitment. “We can offer a global career with a high level of benefits,” says Moise. “The way we approach benefits is to analyse what the local state provides and to look at what we need to offer to be competitive.”

During the first 18 months in her current role, Moise compiled a database of all the perks offered in each country in order to gain a clear understanding of what the organisation offers around the globe.

Ensuring its staff understand what they receive is a current priority for Schlumberger. “We need to communicate the value of benefits much better,” says Moise. “In most countries, we offer very good benefits, but it is difficult to emphasise the value of them.” With so many staff out in the field, communication can be a challenge, not least because of the physical difficulty of reaching those based in a desert or on an oil rig. To overcome this, Schlumberger last year set out to design a programme of financial education to reach its expatriate and international commuter populations. It did this by working with independent financial adviser (IFA) firm Clarity.

Financial education award winner

The resulting programme –which won the award for Most effective use of financial education at the 2009 Employee Benefits Awards in June – was designed to give staff who have taken part in expatriate benefits plans for at least 10 years, or who are over the age of 40, a better understanding of their total benefits package.

It shows them how their package compares in the marketplace, what the perks would cost if bought independently, and the value of deferred benefits, such as pensions.

Schlumberger’s expatriate staff could be brought together in offices, so the company organised financial workshops using its benefits team together with an IFA. These were followed by one-to-one meetings between employees and Schlumberger’s benefits team. “What it has done is demystify the deferred benefits in particular,” says Moise.

Initially, the company held sessions in seven countries, including China and Mexico, and has fulfilled its commitment to hold a further 19 sessions this year.

Because of the remote locations in which its international commuters are typically based, educating this group of employees required a different approach. So the company developed an online version of its workshops, which can be accessed by staff wherever they are located.

Benefits education a priority

On a more local level, communication and education around benefits has also been a priority for Schlumberger in the UK. Carmelo Arroyo, compensation and benefits manager for the company’s Europe-Mediterranean (EUM) Regional Support Centre, says: “Communication of benefits is nirvana and where we want to get to.”

This year, Schlumberger increased employee activity around its flexible benefits scheme by 130% after a roadshow communication campaign.

This followed a pensions and investment choices education programme in the UK last year. The roadshows, which were held after the company introduced investment choices for its pension scheme members, were designed to explain topics such as the different asset classes available.

Managers help staff understand perks

Managers play an important role in helping staff to understand their benefits. To train managers, the company runs a two-and-a-halfday course on compensation and benefits.

“That has been incredibly successful in enabling managers to answer questions for employees,” says Moise.

She adds that Schlumberger is developing an advanced course in benefits that will have the bonus of helping to identify future benefits managers. The first of these is scheduled for later this year.

Total reward statements planned

Looking to the future, Arroyo hopes to introduce total reward statements next year.

Although he acknowledges this is an important step, no firm plans are yet in place. This is partly because Schlumberger usually looks at projects based on need and the business case for them. This often means looking at the UK first before seeing where initiatives can be adapted elsewhere, says Arroyo.

Moise is currently involved in a project to carry out a three-year medical cost evaluation analysis across all countries. This will put Schlumberger in a better position to decide which countries’ benefits should be reviewed next year, she says.

But overall, Moise has set her sights on a much bigger project. “I envisage that my role across home-country benefits is to develop some kind of total reward,” she says.

So, despite the challenges posed by the nature of its business, Schlumberger’s benefits team are ready to tackle the big issues.

Schlumberger at a glance:

Schlumberger is one of the world’s leading oilfield services companies, supplying technology, information solutions and project management services to optimise reservoir performance for its customers in the oil and gas industry. It is incorporated in the Netherlands Antilles, with principal offices in Houston, Paris and the Hague, and is listed on the New York Stock Exchange.

The company was founded in 1926 by brothers Conrad and Marcel Schlumberger in France. It now has a presence in about 80 countries, across which it employs more than 80,000 people from over 140 nationalities. About 4,000 staff are based in the UK. As well as employing staff in their home nations, Schlumberger also has a number of expatriates, as well as a population of international commuters who live in their home countries, but fly out to work in land crews in the desert or jungle, or to a vessel, for several weeks at a time.

According to its second-quarter results for 2009, published in July, Schlumberger reported revenue of $5.53bn for the period. This is a drop from $6bn recorded in the first quarter of the year, and $6.75bn in the second quarter of 2008.

The company’s total revenue for 2008 was $27.16bn.

Career profiles:

Sarah Moise, benefits manager (home country plans, excluding North America), joined Schlumberger in 1997. For the past three years, she has been responsible for managing local benefits across all countries in which the firm operates, with the exception of North America.

Moise’s first role at the company was her first foray into the world of benefits, when she took up the position of global compensation and benefits manager. She held this post for six years before becoming UK compensation and benefits manager for two years. From there, she took on a specialist project role before moving to her current position.

Prior to joining Schlumberger, Moise held generalist HR roles in the construction industry with Balfour Beatty, Bovis Construction and Babcock Engineering.

Carmelo Arroyo, compensation and benefits manager for Schlumberger’s Europe-Mediterranean (EUM) regional support centre, began his career with the firm in 1982 as a field engineer, with his first assignment in Aberdeen.

After a stint in a data role in the mid-1990s, he moved into HR following an organisational restructure. Despite having no prior experience of compensation and benefits, his role involved projects such as introducing a flexible benefits scheme and moving the firm’s payroll over to a SAP system. Since moving into this field, he has also spent 18 months looking after compensation for groups of employees globally, for example carrying out salary adjustments. He took on his current role last year.

Case study: PMI provides a comfort factor

Jon Haylett, UK South finance centre manager at Schlumberger, has worked for the company for 14 years.

His favourite perk is private medical insurance, which Schlumberger provides for employees and their families. “It has helped myself and my family in recent years,” says Haylett.

“We could get treated very quickly and it is nice to have that comfort factor.”

He also appreciates being able to trade holiday, which is offered through flex. “I get 28 days’ holiday a year and it is not always possible to take all of this, so rather than carrying days over, I have started to sell days.”

This year, Haylett used these extra funds to pay for dental insurance and a will-writing service.