Alberta’s labour crisis back… with a vengeance (Guest Commentary)

Integrated resourcing, competitive benefits, mentoring just a few ways to attract talent
By Brad Beveridge and Mark Hopkins
|Canadian HR Reporter|Last Updated: 09/11/2011

It’s hard to pick up a newspaper in Alberta and not see a headline that reads “Labour shortage.” Alberta’s energy industry, particularly on the oil side, is ramping up once again. While that’s good news for Alberta and the Canadian economy, the shortage of skilled labour (which never really went away) has returned as one of the most pressing business issues in the province.

The oil and gas industry, in particular, is already seeing a critical shortage of skilled workers that, if not dealt with soon, will start to cause production delays and the postponement or abandonment of multimillion-dollar projects, which would have significant implications for Alberta business growth and the Canadian economy.

With more than $100 billion worth of capital projects on the books over the next decade throughout Alberta, employers need to find 77,000 new employees by 2020. Additionally, 190,000 Alberta workers are expected to retire over the next decade, creating a staggering human capital deficit that could reach up to 100,000 workers.

Alberta’s growing shortage of labour and talent is being driven by the convergence of a number of long-term trends, including baby boomer retirement, slower population growth, stiff competition from employers in the United States and abroad and a chronic shortage of skilled trades and technical professionals. It’s a classic supply and demand problem. Unfortunately, in this case, supply is not able to satisfy demand, even through immigration.

The short supply of labour and talent is not just a temporary anomaly but the new normal against which companies need to carefully plot long-term business and labour strategies. Those that don’t take the necessary steps to plan adequately for tightening labour markets could miss out on finding and keeping the kind of quality leadership and skilled workers needed now and in the longer term for continued business success.

So what should organizations do to respond to the new normal? In the past, the typical reaction to a labour crunch was to focus efforts and resources on acquisition — recruiting aggressively and paying big premiums for what often turned out to be low- to mid-range talent. But there’s a better way.

Strategic workforce planning: Creating a detailed strategic workforce plan needs to become a part of the strategic business plan. Doing so will help make sure an organization has an integrated resourcing strategy that meets long-term business objectives — with the right people, in the right place, at the right time, now and in the future. This includes determining not only current but future skill requirements.

Employers need to know which key people are planning to retire and when, and what skills and experience will be lost. Then they need to find out whether they can convince the workers to stay or if they can be replaced internally. Otherwise, it’s time to start recruiting.

A comprehensive skill assessment can help guide recruitment and selection decisions, succession planning, leadership development, talent retention, career management and transition decisions.

Employee retention: A company can’t be expected to be all things to all employees. Therefore, a certain amount of turnover is always to be expected, especially with heightened demand for skilled labour. But it can cost a lot of money when an existing employee must be replaced.

Now is the time to make a concerted effort to be an employer of choice, offering all employees competitive pay and benefits, opportunities for development, challenging work, a diverse and inclusive work environment and inspirational leadership to encourage them to stay.

Employee mentoring: The knowledge and experience retained in key individuals is one of the most valuable corporate assets. But when these individuals retire, this valuable information usually leaves with them, along with substantial wisdom and judgment.

An effective mentoring program allows and encourages these key employees to share their knowledge and skills with other employees, reducing the impact on an organization.

Mentoring employees into more senior positions is also an effective way to ensure their success, reduce hiring and turnover costs, as well as keep them motivated and challenged.

And if this is combined with a workplace management approach that includes flexible work hours, mentoring can be an innovative way to encourage these employees to stay with the company.

Succession planning: Employers need to have a deep pipeline of talented people in place who are ready to help the company grow its competitive advantage and meet business needs. Effective succession planning will:

• identify those with the potential to assume greater responsibility

• provide critical development experiences to those who can move into key roles

• engage business leadership in supporting the development of high-potential leaders

• build a database that can be used to make better staffing decisions for key jobs.

Recruitment: While keeping employee retention high is a crucial success factor to consider, no organization can claim zero per cent turnover. Hiring the right talent is a key element to an organization’s long-term success and new talent can often bring fresh energy to a company.

But the risks and costs of hiring the wrong person — someone who misses opportunities or fails to develop strong teams and partners to achieve results — is significant. Finding a qualified candidate is just the start. Taking the necessary steps to improve the overall quality and fit of employees hired will reduce turnover, help retention and improve morale and productivity.

Ninety per cent of Alberta organizations are actively seeking reliable, skilled and professional help, according to the Conference Board of Canada. Aligning human capital solutions to business strategy is fundamental to maintaining and developing strategic advantage and enduring organizational success.

Companies need to take the necessary steps now to determine long-range human capital needs and resourcing options and develop a human capital resourcing plan that provides a customized, balanced focus on recruitment and retention, succession planning and employee development.

Brad Beveridge is a managing director at Amrop Knightsbridge Toronto and Mark Hopkins is a managing partner at Amrop Knightbridge’s Calgary executive search practice.

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