Wages, Benefits, and Employment Practices Among Energy Companies

by Marty Kirshner, CPA, MSA, Gray, Gray & Gray, LLP

What the 2024 Industry Survey Tells Us about Liquid Energy Retailers

Our firm’s 2024 survey of propane and heating oil dealers across the United States has revealed significant insights into their employment practices, wage structures, and benefit offerings. This study sheds light on the current state of the industry and the challenges faced by employers in attracting and retaining skilled workers. (You can download the full results of the survey at www.gggllp.com/energy-survey-results-2024)

Payroll Increases and Industry Growth

The energy sector appears to be experiencing significant wage growth, with 45% of surveyed companies reporting payroll increases of 6% or more from the previous year. The breakdown of these increases is particularly telling:

• 25% of companies implemented substantial raises of 8% or more
• 20% reported increases in the 6-7% range
• 35% saw moderate increases of 4-5%
• 20% had minimal increases of 0-3%

These figures suggest a highly competitive labor market, with the majority of companies needing to offer significant pay raises to attract and retain talent. The fact that a quarter of the surveyed companies increased payroll by 8% or more indicates strong growth in some segments of the industry or acute labor shortages driving up wages.

Employee Cross-Training and Flexibility

In an interesting insight into operational strategies, the survey reveals that 53% of companies cross-train their employees as both drivers and technicians. This approach to workforce development offers several potential benefits:

• Increased operational flexibility
• Enhanced job security for employees
• Opportunity for skill development and career progression
• Improved efficiency and potential cost savings for employers

However, it’s worth noting that 47% of companies do not engage in this practice, possibly due to regulatory constraints, union agreements, or a preference for specialized roles.

Employee Retention Strategies

Despite the competitive labor market, only 14% of surveyed companies reported having “golden handcuffs” or key employee retention plans in place. These plans typically involve financial incentives designed to encourage valued employees to remain with the company long-term. The low adoption rate of such plans could indicate a reliance on other retention strategies, a lack of awareness about these tools, financial constraints preventing their implementation, or a corporate culture that prioritizes other forms of employee engagement

Health Insurance Benefits

The survey reveals a wide range of approaches to employee health insurance benefits:

• 29% of companies pay 100% of their employees’ health insurance premiums
• 25% cover between 75-99% of the costs
• 18% pay between 51-74%
• 10% cover exactly half of the premium
• 18% pay less than half of the health insurance benefit

This diversity in health insurance contributions reflects the ongoing challenges in the U.S. healthcare system and the different strategies companies employ to balance employee welfare with financial constraints. The fact that over half of the surveyed companies pay 75% or more of their employees’ health insurance premiums indicates a strong commitment to employee well-being in the industry.

What Can We Learn?

The propane and heating oil industry in the United States presents a complex picture of employment practices and benefits. While the industry shows signs of growth and competitiveness in wages, there are clear variations in how companies approach employee retention, skill development, and benefits.

The high rates of payroll increases suggest a sector that is actively competing for talent, yet the low adoption of formal retention plans indicates potential opportunities for companies to differentiate themselves in the labor market. The prevalence of cross-training points to a desire for operational flexibility, while the generous health insurance contributions by many firms highlight the importance of comprehensive benefits packages in attracting and retaining employees.

As the energy sector continues to evolve, particularly with the increasing focus on renewable energy and technological advancements, it will be crucial for propane and heating oil dealers to continue adapting their employment practices to ensure they can attract, retain, and develop the skilled workforce needed to thrive in a changing market.

Marty Kirshner leads the Energy Practice Group at Gray, Gray & Gray, LLP, a business consulting and accounting firm that serves the energy industry. He can be reached at (781) 407-0300 or mkirshner@gggllp.com.

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