Workforce wanted: How industry is rising to the challenge to meet labour market demands

By Tim Banman

5-2 Carla photo cropped

When it comes to the oil and gas labour market in recent years, the story is always the same: industry cannot find enough qualified professionals and labourers to meet demand.

In short supply and high demand include power and petroleum engineers, mechanical and instrumentation technicians, heavy-duty equipment mechanics, welders, insulators, crane operators, millwrights, machinists, steamfitters and pipefitters, among other occupations. Whether in the service sector, conventional exploration and production, oilsands or pipelines, industry has more jobs than it can fill.

Enter the Petroleum Human Resources Council (“the Council”). The Council and its partners have set out to investigate the nature of industry’s labour market demands and offer solutions for meeting the needs of tomorrow.

In its 2013 report, The Decade Ahead: Labour Market Outlook to 2022 for Canada’s Oil and Gas Industry, the Council found that by 2022, low-growth and high-growth scenarios will add 2,600 to 3,450 industry jobs in Saskatchewan by 2022. Adding to the challenge, Saskatchewan boasted the lowest unemployment rate in Canada in 2013, below four per cent. Driven by increased activity in the Bakken region and uptake in heavy oil production around Lloydminster, oil and gas jobs accounted for 11,605 direct jobs in Saskatchewan in 2012.

Depending on market diversification efforts, total industry hiring activity in Canada will range from 125,100 to 149,800 by 2022. Including direct, indirect and induced jobs in construction, manufacturing, transportation, professional and other services, the oil and gas industry will support 894,100 to over a million jobs in Canada, including 40,900 to 46,000 in Saskatchewan.

According to the Council, chronic unfulfilled jobs are slowing economic growth. Furthermore, the retirement of a generation of skilled oilfield workers will impact dramatically—and soon. The average age of the oil and gas industry’s workforce is 40 and attrition is expected to reach 23 per cent by 2022. The lack of current enthusiasm for oil and gas work from youth presents another obstacle. Combined with a three per cent natural turnover rate, industry has its work cut out just trying to keep up with growth.

“The biggest issue that confronts the entire industry and trickles down to the drilling companies is the retirement and pending retirement. That’s going to hit everybody faster than they realize,” Carla Campbell-Ott, Council executive director, explains.

The Council says labour market demands can be alleviated in part by connecting Canadians with available jobs, including targeting under-represented labour pools and workers in provinces with higher unemployment rates. Giant strides have been made towards placing Canadians where the job market is located in recent years. Fort McMurray hosts the second-highest concentration of Newfoundlanders off the island, Campbell-Ott notes.

Figure 7 – Canada's Oil and Gas Industry Employment Outlook to 2022. From The Decade Ahead: Labour Market Outlook to 2022 for Canada's Oil and Gas Industry.
Figure 7 – Canada’s Oil and Gas Industry Employment Outlook to 2022. From The Decade Ahead: Labour Market Outlook to 2022 for Canada’s Oil and Gas Industry.

“The mobility of workers is already taking place, but when you look at some pockets of unemployment, it would be great to see those diminish and for people to either get skills in the right occupations or move,” Campbell-Ott reflects.

For Canadians living outside of oil-producing areas, the lack of knowledge about the oil and gas industry can hinder recruitment. Often, capable individuals are unaware that skills they possess could transfer to high-paying oil industry jobs, something the Council hopes to change with increased “energy literacy.” They are reaching out to career counsellors and immigration services to promote “energy literacy” by providing information about the oil and gas industry, what occupations are available and what skills are required to land a high-paying job.

“The whole skills mismatch may actually be alleviated by understanding transferability,” Campbell-Ott says. “People have skills all across Canada potentially that could transfer to good-paying jobs.”

Exploring the transferability of skills potential recruits already possess, whether they live in Winnipeg, the East Coast or elsewhere, is a vital strategy for meeting long-term labour market needs. When the pine beetle invasion threatened the B.C. forestry industry, a pulp and paper mill closure left hundreds of skilled workers without jobs. The Council partnered with local employment and education stakeholders to explore transferability of skills between forestry and oilsands. The Council found many transferable skills with about 200 individuals, and found placement for around 90 workers in the oilsands industry who took minimal additional training. Many of the former forestry industry workers now commute to work in the oilsands, avoided EI and at the same time are helping to ease critical labour market demands.

“There is great opportunity for transferability between pulp and paper and oilsands occupations, specifically power engineers and process operators,” Campbell-Ott explains. “Choosing to fly in and fly out to Fort McMurray allowed for workers to continue to work and support their families and homes in Campbell River. Examples like that are successes. That shows you where you can connect Canadians with jobs, where you can take EI candidates or displaced workers and are able to match their skills to needs elsewhere. That’s ideal.”

Beyond recruiting Canadians, industry is meeting labour needs with recruitment of skilled immigrants and temporary foreign workers (TFWs). While industry needs to focus on securing skilled immigrants to provide a stable, long-term labour supply, TFWs will continue to fill a role for the foreseeable future not only in direct oil and gas jobs, but also in the service sectors required to support oil and gas. As Campbell-Ott notes, TFWs contribute considerably in construction and other supporting industries, and without servicing industries, oil and gas production would be negatively impacted.

Federal budget initiatives like the Canada Job Grant, which provides up to $15,000 per person for skills and apprenticeship training for in-demand jobs, First Nations grants for youth training, as well as promotion of education in high-demand fields can also help address labour requirements. The Council notes that employers are able to attract more employees by exploring retention strategies beyond compensation.

“It’s easy to get someone through the door, it’s harder to keep them,” Campbell-Ott says.

Figure 8 – Employment benefits of investments and activities within Canada's oil and gas industry. From The Decade Ahead: Labour Market Outlook to 2022 for Canada's Oil and Gas Industry.
Figure 8 – Employment benefits of investments and activities within Canada’s oil and gas industry. From The Decade Ahead: Labour Market Outlook to 2022 for Canada’s Oil and Gas Industry.

Since merging with Enform in 2013, the Council has gained insight into how improving safety can improve retention. For instance, drilling industry turnover is 400 per cent, meaning employers have to hire four workers to keep one. High turnover can affect overall implementation of safety protocols. The merger has helped tackle safety issues by bringing together resources to address workplace safety and improve retention strategies.

Recruiting First Nations employees to fill industry jobs will be critical to meeting labour demands. The Council recently compiled HR Trends & Insights Report on Aboriginal Employment in Saskatchewan’s Oil and Gas Industry, a report on Aboriginal employment in Saskatchewan to address the lack of uptake in available jobs. The report finds that employers gain success when they are able to build long-term relationships of trust with First Nations communities.

“The engagement of aboriginal workforce is done though trust. Those companies that are successful engaging aboriginal workers are those that have spent the time. It’s not a one-way street. It has to be mutually beneficial,” Campbell-Ott summarizes.

Reporting on Labour Market

In addition to the HR Trends & Insights Report on Aboriginal Employment in Saskatchewan’s Oil and Gas Industry mentioned above, PHRC plans to release the following labour market research reports into trends and outlooks in the spring and summer of 2014:

HR Trends and Insights: Supply of Canadian Apprentices and Trades for Select Oil and Gas Occupations

Consolidated Construction and Operations Oil Sands Labour Demand Outlook to 2023

Labour Market Outlook to 2023 for Canada’s Oil and Gas Industry

Labour Market Outlook to 2023 for Alberta’s Oil and Gas Industry

Workforce Diversity in Canada’s Oil and Gas Industry

Labour Market Outlook to 2023 for Saskatchewan’s Oil and Gas Industry

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