The great Western job rush
Executives say lure of oil patch has made it difficult to hire skilled employees
RICHARD BLACKWELL
From Monday’s Globe and Mail
September 17, 2007 at 6:06 AM EDT
What’s that great sucking sound? It’s Western Canada pulling workers from across the country into jobs created by the region’s booming economy.
A shortage of skilled employees in the West has spread to the rest of Canada, and that’s causing great consternation in corner offices from coast to coast.
“The West has become the great big vacuum cleaner of talent in the country,” said Dean MacDonald, chief executive officer at Persona Communications Corp., a cable television company based in Newfoundland.
“In Eastern Canada when you go to look for people in skilled trades, they’ve all gone west because the bucks are big and the lure is just too great,” he said.
“Someone who was a cable installer, for instance, can go out to the oil patch and earn [more money] doing something they weren’t even trained for. If the country is a teeter-totter, right now the West is the 800-pound gorilla at the other end.”
The latest C-Suite Survey of Canada’s executives shows that the shortage of skilled labour is now the No. 1 challenge for business leaders. While the situation is most acute in Western Canada, effects of the shortage are being felt across the country.
The survey, conducted in August for Report on Business and Business News Network by Ottawa’s Gandalf Group, shows that 84 per cent of respondents are finding it difficult to find available, qualified employees.
The service sector is where the labour crunch is most severe, with more than 90 per cent of executives at those firms reporting it’s tough to get workers.
But resource companies and manufacturers are also finding it hard to find staff, with 81 per cent and 71 per cent of executives in those sectors respectively reporting it “somewhat difficult” or “very difficult” to find qualified, available employees.
The type of worker that’s hardest to find? Licensed tradespeople such as electricians, the executives report. The easiest?
Unskilled labourers.
While strong economic growth, particularly in the West, was named as the No. 1 cause of the skilled labour shortage, executives also identified other factors that exacerbate the problem.
An aging population, with fewer people coming into the work force to replace those who are retiring, is also hurting the situation, they say. The third most-mentioned factor: a lack of focus on educating young Canadians with the skills employers require.
To fix the imbalance, there needs to be a broad, long-term effort by both business and government, executives say. More than three-quarters of those surveyed said dealing with Canada’s human resource challenges should be a top priority for government.
Paul Charette, chief executive officer of national general contractor Bird Construction Co., said one key role for governments – both provincial and federal – is to provide the resources to beef up training for the skilled trades at community colleges.
At the same time, “we really need to change the attitudes of the baby boomers,” Mr. Charette said, so that they encourage their children to consider careers in the trades. “Not everybody is cut out to go to university,” he said, and those who choose to learn a skilled trade at a college “will definitely get a job” when they graduate.
Ottawa should also consider changes to Canada’s immigration policy to make it easier for people with needed labour skills to come here, Mr. Charette said.
Current immigration rules favour people with degrees over those with skills, and that is blocking some workers from immigrating, he said. “It’s easier to get into Canada if you have a degree in Greek mythology than if you’re a journeyman electrician.”
Executives also see a key role for business in making sure they obtain the staff they require.
Murray Souter, CEO of national photo-finishing company Black Photo Corp., said retail businesses are working together to create training and development programs that will prepare people to work in that sector.
But he acknowledges that retailers also must make sure there are opportunities for advancement, and long-term careers, to encourage people to stay.
While keeping staff has been a “looming issue” for retailers for years, the boom in Alberta has now thrust it to the forefront, Mr. Souter said.
“We have employees who have been with our organization for a number of years, who are very well-paid and very well-qualified, leaving to go to jobs in the oil patch that require no skill, [but] they earn almost twice the salary.”
Terry Owen, CEO of Calgary-based trucking firm Trimac Transportation Services Inc., said his firm has had to put out enormous efforts “to get the right drivers in the seats of our trucks” in Western Canada, especially when there is so much competition from high-paying jobs in the oil patch.
Trimac has a formal “retention and recruitment” task force constantly looking at the issue, Mr. Owen said.
The company also employs a group of managers – he calls them “driver cuddlers” – whose job is to facilitate communications with the truck drivers in order to ensure that they feel appreciated and respected.
Some other businesses just have a natural advantage when it comes to recruiting and keeping employees. Ken Barbet, CEO of Calgary’s Big Rock Brewery said working at a brewery is still considered a “status job” in Alberta, and that helps attract workers. A regular beer allowance doesn’t hurt, either.
Sometimes, though, the best bet is just to pack up a business operation and move it to where there are available workers.
Mr. MacDonald of Persona said his firm opened two call centres in Alberta, but eventually moved them back to Eastern Canada.
“We couldn’t get the talent because they could make $12 an hour at Tim Hortons,” he said.
“We could get a more reliable work force in Newfoundland that was prepared to stay and didn’t want to move.”
Economy
Executives are the gloomiest they’ve been about the Canadian economy since the C-Suite surveys began almost two years ago. More than a quarter expect an economic decline in the next year, while only 3 per cent predict strong growth. The executives are even more pessimistic about the U.S. economy, with almost three-quarters expecting a moderate or strong decline south of the border. Human resource issues remain the most pressing challenge to business leaders, followed by economic issues and the cost of capital.
Q: What are your expectations for the Canadian economy over the next 12 months?
August 2007 June 2007
Strong decline 1%
Moderate decline 27% 11%
Moderate growth 69% 79%
Strong growth 3% 9%
Q: What are your expectations for the U.S. economy over the next 12 months?
August 2007 June 2007
Strong decline 4% 1%
Moderate decline 68% 47%
Moderate growth 27% 51%
Q: What is the biggest challenge facing your company right now?
Human resources: 23
The economy: 13
Financing: 10
Currency issues: 9
Managing growth: 8
Government: 5
Competition: 5
NOTE: CHARTS MAY NOT ADD UP TO 100 DUE TO ROUNDING
Issues
Business leaders’ impressions of Finance Minister Jim Flaherty, above, continue to slip, with less than a quarter viewing him favourably, while about 40 per cent see him in an unfavourable light. A majority of executives – about 57 per cent – said they oppose the Bank of Canada’s move in July to raise interest rates, while just over 40 per cent said they approve of the move. The executives say global competition is the No. 1 challenge facing Canada, followed by economic issues, and the current high level of the Canadian dollar.
Q: What is your impression of Jim Flaherty in his role as Minister of Finance?
August 2007 June 2007
Very unfavourable 21% 25%
Very favourable 5% 7%
Somewhat unfavourable 19% 15%
Neither 34% 26%
Somewhat favourable 19% 25%
Q: Do you support or opose the Bank of Canada’s recent move to increase interest rates?
Strongly support 7%
Don’t know 1%
Strongly oppose 19%
Somewhat support 34%
Somewhat oppose 38%
Q: What is the most important challenge facing Canada right now?
Global competition: 21
Economic issues: 14
Currency exchange: 7
Productivity: 6
Environment: 5
Taxes: 5
Labour shortages
About 84 per cent of Canadian executives say it’s now tough to find available, qualified employees. The service sector is having the roughest time, and companies in the West find it harder to find people than those in central Canada. More than three-quarters of those surveyed said this issue should be a top priority for governments. While executives think the booming economy is the main reason for the problem, the aging population and a mismatch between education and needed skills were also cited by many.
Q: How hard is it to find available, qualified employees?
Very difficult: 21%
Somewhat difficult: 63%
Don’t know: 1%
Somewhat easy: 15%
Q: Should Canada’s human resource challenges be a top priority for government?
Don’t know: 3%
Strongly disagree: 2%
Disagree: 19%
Strongly agree: 29%
Agree: 47%
Q: What are the causes of human resources issues?
A booming economy: 21
Demographics: 19
Lack of focus on education: 17
Lack of skilled labour: 12
Strong Western economy: 12
Lack of interest in trades: 9
Competition for labour: 7
SOURCE: THE GANDALF GROUP
C-SUITE SURVEY
The quarterly C-Suite Survey was conducted for Report on Business and Business News Network by the Gandalf Group, and sponsored by KPMG and law firm Davies Ward Phillips & Vineberg. The survey interviewed 150 executives across the country between Aug. 13 and Aug. 31, 2007. Respondents were split evenly by company size, and represent all parts of the country. Executives in service industries represent 45 per cent of the sample, resources 30 per cent, and manufacturing industries 25 per cent. Each quarter, a charitable contribution is made on behalf of a survey participant.
Want to know more about what the nation’s leaders think? Join host Michael Hainsworth on Business News Network for the C-Suite Survey at 8:30 p.m. (EDT).
Visit ReportonBusiness.com tomorrow at 1 p.m. for an online discussion with David Herle.
source: http://www.theglobeandmail.com/servlet/story/RTGAM.20070917.wrcsuite17/BNStory/robNews/
The CEO’s hiring challenge
Globe and Mail Update
September 17, 2007 at 7:36 AM EDT
“What’s that great sucking sound?” writes Richard Blackwell in the quarterly C-Suite survey. It’s the challenge for all of Canada’s chief executives: finding the right skilled labour, in the right region.
The shortages have spread across the country, making hiring one of the most critical decisions faced by Canada’s business leaders. The situation is most acute in the West, but talent is tough to find from coast to coast – 84 per cent of respondents said available, qualified employees are difficult to find.
The survey also revealed that executives are getting gloomier about the economy, with 27 per cent of respondents expecting a moderate decline in the next year. Their impressions of federal Finance Minister Jim Flaherty are slipping, and they weren’t happy when the Bank of Canada raised interest rates in July.
The C-Suite survey is conducted for Report on Business and Business News Network by the Gandalf Group, and is sponsored by KPMG and Davies Ward Phillips & Vineberg. The survey interviewed 150 executives between Aug. 13 and Aug. 31, 2007.
Join Gandalf Group principal partner David Herle to discuss the mood among executives in Canada. He will be online to take your questions at 1 p.m. (EDT) Tuesday. Or you can get a jump on the queue by submitting your question
source:http://www.theglobeandmail.com/servlet/story/RTGAM.20070917.wcsuitediscussion0917/BNStory/Business
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Internet Links
By the numbers: C-Suite Survey results
http://www.reportonbusiness.com/v5/content/ROB/csuite/070917_csuite_col_triple.htm
