There’s usually a bounce in hiring after the New Year holiday season slowdown, but the first three months of 2015 bucked the trend due to the downturn in the oil and gas market for the first time since the index was created.

The Hays index, which charts the number of jobs posted on key oil and gas job portals across the world, dropped from 1.16 to 0.95 in Q1 2015, a fall of 28% from December 2014 and a 42% fall year-on-year.

The effect of the downturn is now being fully realised, as operating and service companies across all oil and gas regions implement savings strategies and cost measures to ensure they remain profitable in a sub-$US60 per barrel world.

“A return to higher oil prices has yet to transpire and the industry is starting to adjust to the new lower price regime,” Hays managing director John Faraguna said.

“Cost saving measures will impact hiring plans, however decisions made today will shape the future labour force so it is important for employers to hire strategically to avoid creating a future skills gap.

“There are still pockets of reasonably strong activity: Asia and the Middle East both show an increase in hiring activity compared to the previous quarter, albeit below Q1 2014.”

The Index was established in 2010 when it was set at 1 and all subsequent months have been compared to this benchmark.

In Australia the index has reported four consecutive quarters of decline since its slight recovery in May 2014 as the big LNG projects in Western Australia, the Northern Territory and Queensland transition from the design and construction phases and into operational status, resulting in reduction in demand for new talent and reflected in the index.

Queensland Curtis LNG is now in production, Gladstone LNG and Gorgon have moved into the commissioning phase, while Ichthys, Wheatstone and Australia Pacific LNG are still moving towards the end of the construction phase.

Job losses from the first quarter contraction are likely to be amplified in the next report.

Hays says the jobs most in demand in Australia are for contract administrators, commanding an average salary between $130,000-$140,000 and subsurface operations managers, who are able to command an average $200,000 per annum, Hays said.

The first quarter has been stronger in Asia than other regions, Hays said, probably because of the expertise and proven track record in the design and construction of offshore production facilities.

Companies with projects in construction have already committed the finances required, so Hays expects there will be a time lag before any potential changes to hiring plans are realised.

The full effect of the oil price decline in North America is starting to take hold and projects with unfavourable economics are being cut or delayed. On the positive side, LNG projects on the Gulf Coast, primarily Texas and Louisiana are still hiring the talent required to drive towards operational status.

OPEC’s decision not to cut production has hit parts of South America hard, especially Venezuela.

This, coupled with the continuing fall-out of investigations into Petrobras, has hindered the region’s job market growth. The continuing energy reforms in Mexico and the announcement of Round One tendering scheduled later this year should have a positive effect on the index later in the year.

The cost of producing North Sea oil and the slow up-take of fraccing and shale exploration in the region take their toll on the UK job market. With the approaching UK general election in May 2015, the new government is expected to come under pressure to revise tax reforms in order to kick start UK oil production.

In Russian and the Commonwealth of Independent States western sanctions, coupled with the fall in oil prices have resulted in the CIS Job Index dropping to the lowest levels in six years.

Russia has turned its attention to Asia, particularly China, both for financial investment and the talent needed to complete projects, in turn securing the revenue it so desperately relies on from oil and gas exports. A number of big pipeline projects, if approved, could create thousands of jobs.

In the Middle East, businesses such as Saudi Aramco are hiring western expats with specific unconventional experience and for infrastructure projects, which has helped stabilise the Index. The job market is expected to remain relatively strong throughout mid-2015, but it is still too early to tell if the index will return to 2014 levels.

The rising cost of production on the one hand and the decline in oil prices on the other are causing employers to put a hold on hiring activity in Africa, causing the index to drop to below levels not seen since early 2011

Africa is expected to represent 15% of global offshore capital expenditure during 2015, up 10% from 2014 levels.

As health fears from west Africa’s ebola outbreak subside Hays expects to see the index bounce back throughout the year, although it’s unlikely to reach the peaks of previous years in 2015.