|
Do we have a job for you…. Canadian companies offer finder’s fees, bonuses, stock options to attract professional staff Gary Park For Petroleum News
The hunt for skilled professionals is getting tougher than the hunt for new oil and gas reserves in Alberta.
Faced with a 5 percent annual turnover rate, companies are having to dig deeper to recruit and retain white-collar staff.
They’re paying their own employees finder’s fees of up to C$7,500, using their branch plants in the United States to lure expatriates back home with offers of fat signing bonuses and stock options and, in the case of oil sands giant Syncrude Canada, contemplating an investment of C$217 million to keep employees on the payroll with boosts of C$20,000 a year to stick around for three years.
Things have even reached the point where the National Energy Board, Canada’s federal regulator, is having trouble holding on to staff, let alone filling vacancies.
“Attracting and retaining qualified and experienced people in an extremely competitive labor market in Calgary continues to be a significant challenge for the board,” Chairman Ken Vollman said in the board’s annual report.
The worry for the industry is that a failure to keep the board topped up with qualified people will slow the handling of regulatory applications, adding to the inflationary spiral.
Some companies call poaching truce The crisis has resulted in all-out efforts to poach from rivals, further inflating salaries.
It’s become so heated that a truce has been called by some companies.
Brent Shirvey, a head-hunter with Boyden Global Executive Search, told the Financial Post that there are now unwritten agreements between companies not to hire from one another to keep a lid on salaries.
He said some clients have instructed his firm “not to approach other companies with which they have peace pacts.”
According to recent Canadian government statistics, a record 21,500 people were drawn to Alberta in the final quarter of 2005 — a rate five times the national average.
The province’s unemployment rate is now under 4 percent, compared with a national average of 6.7 percent.
Calgary Economic Development estimates the oil industry created 8,800 new jobs in the city last year, 7,700 of them in the professional, scientific and technical services sectors.
‘Velvet handcuffs’ Retaining staff has seen some firms apply what are known as “velvet handcuffs” that include retention bonuses of 15 percent to 30 percent of salary and stock options.
Tristone Capital has calculated that unexercised stock options in the sector top C$10 billion, with many mid-level professionals holding options of C$100,000-$500,000. It’s just as mind-boggling at the executive level, with the top five public oil and gas companies accumulating unexercised equity gains of more than C$500 million.
In their struggle to both hold the line on budgets and locate professional staff, oil sands developers have given up wrestling with immigration difficulties and looking overseas for low-cost, talented engineers.
Some of those contracts are reportedly finding their way to China and India.
The joint venture by Nexen and OPTI Canada, which is building the Long Lake project, contracted some of the design for its upgrader to 300 engineers working for Fluor in India.
Keeping the engineering work within one firm ensured consistency in software and design standards, said a spokesman for OPTI.
Construction crunch could turn nasty But the crunch on the construction front, expected to peak in 2008 and 2009 when oil sands spending hits C$15 billion a year, could also turn nasty, as Canadian Natural Resources learned at its annual meeting on May 4.
The Dominion Bond Rating Service has forecast that the skilled labor workforce in the oil sands sector will climb to 32,000, 36,000 and 32,000 in 2007, 2008 and 2009 respectively, compared with 13,000 in 2005 and 20,000 this year.
About 500 construction workers demonstrated outside the meeting, accusing the company of paying low wages and trying to avoid hiring union workers for the C$6.8 billion, first phase of its Horizon project.
“The issue is union-busting, plain and simple,” said Gil McGowan, president of the Alberta Federation of Labor.
Tim Brower, business agent for Local 424 of the International Brotherhood of Electrical Workers, suggested that 1,600 of the 6,000 trades people at the Horizon site could be brought in from overseas at a time when Alberta workers are unemployed or underemployed.
He accused Canadian Natural Chairman Alan Markin of breaking a promise made last year not to hire foreign workers — a promise Markin denied breaking, although company President Steve Laut explained that Horizon’s contractors are responsible for hiring workers.
Laut said the company does not dictate to its contractors what labor is hired so long as they adhere to the Horizon site-wide agreement.
Laut said contractors have a “built-in bias” in favor of Canadian workers because they must otherwise pay the extra transportation costs and carry the expense of provincial assessment programs to ensure that foreign employees meet Canadian skilled trades standards.
He said it’s highly unlikely that foreigners will work at Horizon if domestic workers are available.
However, a spokeswoman for Canadian Natural told the Globe and Mail in mid-April that a Chinese company, SSEC-Zachary JV may bring in 225 workers this fall to build the tanks that will hold bitumen and synthetic crude.
She said “they were simply the successful bidder. Many of the other contractors were busy enough that they weren’t able to take on the work.”
Outsourcing common Vivek Warrior and Mike Callihoo, lawyers at the firm of Bennett Jones, told Petroleum News that virtually all oil sands operators have outsourced some or all of the engineering and design work for their projects.
Although this has not necessarily realized cost advantages, it has “facilitated access to significant pools of highly qualified technical personnel,” they said.
McGowan said the union displeasure was focused not so much at temporary foreign workers as Canadian Natural’s labor relations policy, which he said was aimed at weakening traditional unions.
Under changes to its labor relations act, the Alberta government gave Canadian Natural the right to negotiate a project agreement with one bargaining agent of its choosing that would apply to all trades people.
In this case, Horizon Construction Management negotiated terms and conditions that are specific to Horizon, side-stepping contracts with unions that apply to all construction projects in Alberta.
But a committee established by workers to draw attention to their concerns said Canadian Natural has combined the use of foreign labor and “sweetheart” unions to undercut established wage rates and working conditions to protect the company’s bottom line.
Further angering the unions is the deal struck between Canadian Natural and the Christian Labor Association of Canada, which endorses the use of foreign workers in Alberta and allows less stringent overtime rules.
To challenge the government is seldom-used relaxation of its labor code, six unions from the Alberta Building Trades Council are challenging the cabinet order in an Alberta court.
| 