A three-person panel was at the Newfoundland and Labrador Oil and Gas Industries Association (NOIA) conference to speak on the challenges around major projects in Atlantic Canada.
From their presentations, one challenge has risen to the forefront: the availability of human resources.
At the St. John’s Convention Centre Tuesday afternoon, Jim Irving, president of J.D. Irving Ltd., John Pollesel, chief operating officer of Vale Canada, and Kari Plaster, vice-president of human resources with the Iron Ore Co. of Canada (IOC) all talked about their need for good workers.
Irving has just landed a $25-billion shipbuilding contract with the Canadian government.
Pollesel said Vale has “30-33 major projects” in the pipeline looking forward, totalling more than $100 billion.
IOC has completed one major expansion in Labrador City, only to launch directly into another. The Atlantic Provinces Economic Council has estimated the value for work under consideration at the site through 2013 at $828 million.
It is not oil and gas work, but the projects have at least one requirement in common with those in the oil industry: thousands of workers.
“Nobody can remember, I don’t think, a time when we could say labour is tight, or has gotten tight. But we are clearly here now,” Irving told the NOIA membership. He anticipated thousands of new hires for his organization from 2012-15.
Irving is already investing millions in training. In addition, the organization takes in about 650 students a year to work, some of whom later find permanent positions (63 Memorial University of Newfoundland graduates are counted among the ranks).
With arms in forestry, specialty printing, industrial fabrication and, of course, shipbuilding, the organization works to stay on top of its own labour forecast.
“We’ve been working hard for a number of years on our inventory of folks — what’s the skill? What’s the demographics? What do we need? Where are we going?” the president said.
Even so, getting information on the regional worker pool and what will be available in five years is a different story. It’s a problem representatives from Irving have taken to the federal government, he said, suggesting an independent study or database to track worker availability.
While the need for shipbuilding workers has yet to really kick in, Vale’s Long Harbour construction project is peaking at about 4,500 on site this summer.
Pollesel made it clear the company has hit a wall when it comes to supplying that project with labour from the local, regional and even, in some cases, national pool.
“Currently that project is progressing relatively well,” he said, noting it is “roughly about 66 per cent complete.” About 78 per cent of the man hours have been completed by hires made in Newfoundland and Labrador.
That said, “human resource shortages are certainly what are plaguing us right now. In our Long Harbour project we are experiencing a lot of difficulty in trying to attract the trades,” he said.
“In (Irving’s) presentation he mentioned that one of the things was to bring people home. Well, our experience so far is that we’re not finding a lot of people who want to, in fact, come home.”
The shortage is not only in terms of individual employees.
“Contractor and supplier base is shrinking,” he said. “There’s a lot of projects out there. We see a lot of consolidation in this industry. Competitive bidding is becoming less effective.”
Pollesel said there has been “quite a significant decline” in productivity day to day on Vale projects.
“The demographics, of course, haven’t helped. I can tell you that in our industry we’ve lost many experienced people and so now it’s very difficult and it’s a measure we need to take in terms of working with the colleges, working with the universities, to develop the programs to train our people, so that we will have the resources to move forward in our operations.”
“So many people today have talked about the challenge for resources. I’m not going to bore you with all of that. I’m just going to tell you that it’s a huge challenge for us,” said Plaster.
The company hired about 600 people last year alone in Labrador City.
“This year, we’ll hire at least that many again.”
On labour shortages, “we’re taking a slightly different approach to that same problem,” she said.
“What we’re trying to do is basically add new labour work hours or improve our existing utilization and productivity.”
The company is testing fly in, fly out; prioritizing vacancies; tightening up break times; and seeking small efficiencies like making the transitions of trucks and shovels in and out of shifts flow more smoothly.
“We’re just trying to focus on those things that we know we have control over when sometimes you don’t have control over the number of resources coming into your business.”