Oil industry plays catchup during lull
Filling backlog of skilled workers long-term project
CALGARY - After a record year of growth and energy prices, oil and gas companies say the expected slowdown in the pace of activity in 2007 will only give them an opportunity to focus on hiring more workers to catch up with pent-up demand.
"We have a structural problem," says David Fulton, vice president of human resources at Shell Canada Ltd. "I do not think the shortage is going to go away any time soon, and that was one of the big debates 18 months ago."
The industry has been so overwhelmed by the incredible need for everything from oilfield service technicians to geophysicists and engineers that any slight moderation in activity will simply allow the industry to catch its collective breath and continue the hiring frenzy.
"It's hot all over," Mr. Fulton says. "There are very few cold skills, or even lukewarm ones anymore."
Part of the "structural problem" stems from the fact the industry is so cyclical in nature that during the 1980s and '90s, companies discouraged people from entering fields such as project management. Now, project managers with 15 or 20 years of experience are among the most highly sought-after occupations in the oilpatch, he says.
Couple the past reactionary hiring policies of many energy companies with today's demographic crunch -- most Baby Boomers will retire within five years -- and the result is a long term labour shortage that is forcing companies to use every available workforce development tool.
Because the energy sector is a highly capital-intensive industry, "we have never paid attention to labour costs in the same way that big manufacturing industries would," Mr. Fulton says. "Our industry is going to have to look hard at what some of these other industries do and see what we can copy and build into our own industry."
Suncor Energy, which directly employs more than 5,000 people and thousands of other contractors indirectly, has such massive investments already on the books, such as the oilsands, that any moderation won't affect the hiring outlook.
"We're trying to project our [labour] needs much further in advance and are looking everywhere where those talented people can be found. We will provide employment for upward of 12,000 contractors at any given time over the next five years," says Don Heath, vice-president of human resources for Suncor. He says the level of competition in the industry has forced companies to be as creative in their efforts as possible.
Companies routinely recruit workers from Eastern Canada, while some of the firms' contractors have brought in foreign temporary workers as part of the labour solution.
Mr. Heath says the increased demand for workers in all fields of the sector is no longer a trend. "I think they're probably less trends than they are the new reality."
In the oilfield supply side of the business, Ron Koper, vice president of business effectiveness for oilfield supply and service company CE Franklin, says even though he's planning for a 20% slowdown in the marketplace this year, it won't affect hiring efforts or the overall job outlook.
"We're anticipating increased competition for labour, not decreased," Mr. Koper says, adding any slowdown will likely only last about eight months before activity picks up again.
Industry associations are also working on solutions to the massive job demand. The Petroleum Human Resources Council of Canada, a federal sector council based in Calgary, has struck a deal with the government of Saskatchewan to build the overall labour pool in Western Canada. "Governments are interested in ensuring business opportunities that come to their provinces don't leave it because they're not able to support those business opportunities with a skilled workforce," says Cheryl Knight, president and executive director of the sector council.
The organization has embarked on a workforce development project to help energy companies with operations in that province develop the labour pool. Saskatchewan has the highest percentage of aboriginals of any province, representing an enormous potential boost to the labour pool if properly trained.
For HR managers at energy firms, the job outlook means every company will likely invest more in all aspects of human resources, from attraction to retention to employee development.
"This is not just an issue about how to attract and hire," Mr. Fulton says.
"You've got to look at the entire chain of activities around getting people in the organization, developing them and making sure they stay."
