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Feeling the pinch

Skilled labour shortages are nothing new to Alberta’s energy sector, but many experts say it’s going to get worse
By Joel Schlesinger, For The Calgary Herald October 15, 2011

The short supply of skilled labour has always been a hot discussion topic in Alberta’s business community. The pinch of finding skilled employees is a fresh memory for many employers, but the energy industry has always felt the labour pains of a fast-growing economy more than most.

At the height of the boom from 2005 to early 2008, both the oil and gas industries were buzzing with activity as prices were near or at all-time highs.
It made human resource officers’ jobs nearly impossible because both industries were chasing the same sets of skilled workers, who would have been scarce just meeting the demands of the oilsands growth, says Greg Stringham, vice-president with Canadian Association of Petroleum Producers.

But following the 2008 market meltdown, the pressing need for skilled labour eased off for a short period. Of course, that was short-lived and, today, demand is ramping up again.

While demand may have eased from those wild boom days, industry leading firms have never stopped planning to meet the staggering demand for labour in Alberta, and even across Canada, in the coming decades.

“We expect to see substantial growth, maybe not at the same pace we saw a few years ago, but at least we’ve come out of the recession in a manner that shows some growth in the oil business,” Stringham says.

And the growth today is found in unexpected places. Natural gas production may have waned since 2007 as prices have dropped and supply increased, but conventional oil production – once thought to be on its way out – has experienced a resurgence because of advances in drilling technology.

“It’s up by about 200,000 barrels at day in our forecast,” says Stringham.

“That alone is pulling on the drilling rigs and support services and leading to a need for labour and manpower in that area.”

Energy sector jobs run the gamut from oil and gas to conventional electricity, coal and renewable endeavours like solar and wind. But it’s the oil and gas industry that fuels Canada’s economy, says Mary McDonald, the dean of SAIT Polytechnic’s MacPhail School of Energy.

“It’s difficult in Alberta not to find a job that is in some way linked to the industry,” she says.

It’s also expected to lead the nation in job growth over the next 20 years. Alberta’s oilsands currently employs 75,000 people directly and indirectly through economic spinoffs such as housing and consumer spending. That figure is expected to be 900,000 by 2035, Stringham says.
But many firms in the sector are already facing labour market challenges, says Wayne Thomas, human resources manager for Alliance Pipeline.

He says all major industry firms are facing short-to longterm problems for two reasons. One is the expected future growth of the industry itself. The other is an aging workforce. Many of the skilled positions are occupied by the baby boomers – born between 1946 and 1964. The first wave of this generation turned 65 this year, and many human resource experts forecast the retiring boomers will lead to further shortages in skilled labour that will be amplified in the energy industry where skilled workers are already scarce.

“We’re like every company in Canada,” Thomas says. “We have a structure or framework for succession planning in place, but we still need to do more.”

Over the next decade, the number of Alberta workers age 55 and older is forecast increase to more than one million. That’s more than 25 per cent of the total workforce, according a recent report by the Alberta government. By 2019, the workforce shortage across all industries will be about 77,000 workers.

Employers, such as Alliance have been developing work retention programs specifically aimed at their aging skilled employees who may be considering retirement in the next few years.

“It’s not just the technical skills that they have that we value,” Thomas says. “It’s the workplace cultural knowledge and experience that they learn over the years. It’s not just what we do as a business. It’s how we do it.”

Almost all major firms have mentorship programs in place, aimed at encouraging older employees to stay on and work with new workers so they can pass on several years of on-the-job experience. Many employers are also offering wage incentives and flexible hours to sweeten the deal, he says.

Calfrac Well Services CEO Doug Ramsay says training employees throughout their careers has always been the most important piece of retention strategies at his oil and gas firm because skilled workers have historically had high mobility, going from one employer to the next.

“By increasing training, we’ve cut our turnover in half,” says Ramsay, co-founder of Calfrac Well Services.

“It’s an investment, not a cost.”

Ramsay has certainly put his money where his mouth is. He and his business partner Ron Mathison recently donated $4 million to SAIT.

Like all post-secondary institutions across Alberta, SAIT has been working with industry to address the future workforce demands.

“But it’s been a challenge” says McDonald.

“I have a huge demand for my graduates, but I struggle with getting enough applications to some of our programs,” she says.
Part of the problem is not enough high school graduates are choosing post-secondary education. She says Alberta has the lowest number of high school graduates that continue on to post secondary education.

“It’s because they go to work after high school.”

And many of those who do choose postsecondary are leaving before they finish their programs because the industry – desperate for labour – is offering them full-time work, she says.

“The problem is when they’re attracted by the money amid the skill shortage that we’re already experiencing, it’s hard to convince them at a young age that they need to look further ahead and not plan for the moment.”

But even with plans to increase the number of spaces available at the school, McDonald says industry demands likely will outpace the technical school’s ability to train and graduate students.

Of course, that isn’t just SAIT’s problem. It’s a provincewide one because it will ultimately negatively impact economic growth.
“It’s a concern for me,” says McDonald. “But it’s also a concern for the industry.”

© Copyright (c) The Calgary Herald

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