The future of the workforce

Alberta’s oil-sands operations sector, which employed just over 20,000 workers in 2011, is projected to grow its workforce by 73% by 2021, according to a new report released this quarter by the Petroleum Human Resources Council of Canada.

Cheryl Knight, executive director and CEO of the Petroleum HR Council, explains: “Demand for more workers is being driven primarily by growth in the sector, as measured by production.

“Meanwhile, our research tells us that the supply of skilled workers remains very tight. Going forward, two major labour market risks will be age-related attrition and competition from other industries.”

Over the next ten years, the council estimates that the sector may need to hire 116% of its current employment levels due to industry expansion, retirements and competition from other industries, both in Canada and worldwide. However, this projected oil-sands hiring increase does not include job vacancies that companies need to fill when employees move from one company to another.

Nor does it address the fact that demographic shifts are not only leading to job vacancies; they are creating significant skill and experience shortages – one new, younger person hired may not effectively replace an experienced worker who retires.

In addition to production growth, turnover and competition for workers, a number of other business, regulatory, social and technological trends are affecting the oil-sands workforce, specifically:

• In-situ production is projected to overtake mining production after 2015. This shift is increasing demand for related occupations such as steam-ticketed operators, petroleum engineers and engineering technologists;

• A keen focus on cost management is changing how the oil-sands sector manages its workforce for major projects;

• Oil-sands construction projects and maintenance turnarounds may be vulnerable to escalating labour costs and schedule delays if the shortage of skilled construction workers continues;

• A stable and productive services sector workforce is critical to sustainable expansion in the oil sands; and

• Other factors, such as the need to obtain the social licence to operate and ensuring compliance with tightening environmental regulations, are affecting how the oil-sands sector does business and the types of workers it requires.

Action required

The oil-sands sector knows that access to an innovative, productive and stable workforce is a key factor in the sustainability and cost management equation.

“The boom years of 2006 and 2007 showed us very clearly the negative impact that labour and skills shortages can have on the sector’s ability to do business,” says Ms Knight. “Since then, companies have devoted time and resources to minimising the impacts of labour shortages on their corporate sustainability and growth.”

The need for action on multiple fronts is immediate. The three major stakeholder groups – industry, governments and labour supply organisations – can help close the labour supply-demand gap, and address skills shortages with a variety of strategies.

• Companies can draw talent from both traditional and diverse labour supply pools; build internal capacity with workforce training and development; implement strategies to retain the ‘baby boom’ population longer in the workforce; enhance worker mobility; and recruit externally, rather than continuing to rely on workers already in the industry.

• Governments can communicate with industry to understand labour and skills requirements; enhance programmes to grow the number of qualified workers in Canada; improve interprovincial recognition of credentials to facilitate worker mobility across Canada; and streamline processes for accessing international talent.

• Labour supply organisations can communicate the industry’s workforce requirements to labour supply pools; plan education and training programmes to support labour and skills needs; promote training programmes to diverse audiences of potential students; strengthen partnerships among industry, governments, community organisations and educational institutions; and offer online and on-site training programmes.

Individual actions are only part of the solution. Collaboration among industry, government and labour supply stakeholders is essential to closing the labour and skills gap. Multi-company and multi-stakeholder groups, such as the Oil Sands Leadership Initiative (OSLI) and Alberta Coalition for Action on Labour Shortages (ACALS), are examples of collaborative initiatives that are successfully addressing labour issues in the oil-sands sector.

Outlook to 2021

The highlights presented here are taken from the Oil Sands Labour Market Outlook to 2021, part of the Petroleum HR Council’s suite of labour market information products and services.

The outlook provides oil-sands labour demand projections and analysis based on data for 55 core occupations within three facility/operation types: in situ, mining and upgrading.

In addition, the outlook contains a list of major projects expected to be operational by 2016, as well as summary tables and charts, detailed tables in the appendix, an executive summary and a concise fact sheet.

A PowerPoint presentation and Excel spreadsheets complete the Oil Sands Labour Market Outlook to 2021 package, which was developed through the support of industry and funding from the Government of Alberta.