There are two types of compensation streams in the exploration industry that we typically see– day rates and annual salaries. There are benefits and detriments to both forms of compensation; the key is to understand how to evaluate the opportunities that come your way to determine the best fit for you.
Those new to the industry are often hired by exploration companies on day rates as independent consultants. They are well paid, and by year’s end there’s the potential of making $100,000 plus. An appealing aspect no doubt.
The problem with this is that many people get into day rate jobs and see only the dollar signs. They don’t realize that to make a lot of money, they have to work a lot of hours and days with little time off. So what happens when the work runs out? Well the answer is obvious, when the work runs out, they’re not being paid for possibly weeks or months on end.
Salaried positions usually come with a lower compensation base – something that often appears unattractive to people who have grown accustomed to the money associated with day rates. Many even feel their experience and expertise is being under-valued when a salaried package is presented to them. What is often misunderstood is that salaried roles come with other, non-monetary benefits. It’s important for people to look at the total rewards before declining the offer.
Do the math. Try to estimate the value of the fringe benefits you would get as an employee that you wouldn’t have as a contractor-paid vacation days, sick days, possibly health benefits, stability and mentorship. Add a ‘fudge factor’ for job stability: presumably your tenure is more predictable as an employee rather than a contractor. It’s up to you how much you value this.
Then consider anything that having a salaried job costs that you didn’t face as a contractor-for example in Canada-we have a favourable tax treatment for self-employed contractors that are not available to employees , flexibility on schedule, what types of project you work on.
There are advantages and disadvantages to each type of compensation, the thing to remember is to be able to understand and evaluate the pros and cons of both offers and it’s not always about the money.