It’s no surprise to anyone that Canada is suffering from a shortage in skilled labour. But it may surprise you to learn that analytic software and programs could be a key component to overcoming it.
James Freeman, chief marketing officer for Calgary-based Zedi Inc., a premier provider of analytics and data services, applications and technology for the oil and gas industry, sums up how analytics could play an integral role in the future of labour shortages in Alberta and Canada as a whole in two words: Increased efficiency.
Realizing potential “Since 2008, the production operations side of the upstream oil and gas industry has lost a lot of experienced people. Through Analytics, we can help producers realize potential and become more efficient with the less-skilled labour they have, particularly where gas prices are very tight,” he said.
Essentially, analytics programs analyze data captured from the producing assets in the field, and trigger alarms or flag trends of interest that may deviate from normal operating conditions. Based on these flags, companies can then focus productive effort to minimize downtime and cost, and maximize labour efficiency.
Unfortunately, human resources (HR) and production management in Canadian companies are lagging behind when it comes to implementing core analytics programs into employee performance. In fact, in 2006, an Accenture High-Performance Workforce Study reported that nearly 40 per cent of companies surveyed have no formal measures for determining HR impact on workforce performance, while another 39 per cent have such measures but only for some HR initiatives.
But the study found that 78 per cent of companies that are leaders on human performance criteria are able to demonstrate, with quantitative measures, the impact of the performance of the top three workforces on the organization’s overall financial performance. Similarly, 35 per cent of the leading businesses have formal, business-focused metrics – analytics – to gauge the impact of all of their HR activities on workforce performance.
According to these studies, successful companies are more likely to use analytics to link HR-related initiatives to business performance. The ability to develop business management plans from this data, to ensure that the workforce is working at its fullest potential, can help make up a portion of the labour shortages. Just as the development of manufacturing machinery reduced the labor force needed to make certain products, analytics application can reduce the required labor force by improving efficiency in almost any industry.
Coordination needed to solve labour shortages Bringing new workers to the skilled labour force is important, of course, but focusing on using the current workforce to its fullest potential may be a better way to dramatically ease the burden of the labour shortages that are plaguing Canadian industries. If all of the reasonable methods of dealing with this problem are coordinated together – greater efficiency through analytics, expansions of skilled labour programs, and occasional temporary international hiring – Canada may overcome this impending economic obstacle, and forge on into an ever-more-prosperous future.
What is the extent of the problem?
A C-Suite survey of Canadian corporate executives reported that, despite the high level of unemployment in Canada, companies just can’t get all the people they need to fill the skilled positions that are available. Two-thirds of executives said they are having difficulty finding qualified employees, and one-third said the labour shortage is so severe that it is stunting their companies’ growth.
Unfortunately, the problem is not one that is going to see an end any time soon. According to the Calgary Economic Development study, the demand for skilled labour in Alberta is expected to increase by more than 600,000 workers by 2021. If nothing is done to increase the number of skilled workers, who are ready and willing to occupy these job openings, there will be about 114,000 unfilled vacancies.
If steps are not taken to prepare for this severe shortage of trained workers, Canada could face a number of long-term economic problems that will affect thousands across the nation.
So what can be done about this impending economic threat? The Canadian government have explored a number of options. Many initiatives have focused on obtaining more foreign workers from the United States, Ireland, and U.K. to fill these vacancies.
Alberta Progressive Conservative Premier Alison Redford was in Chicago early this year to discuss the labour shortage and look into possibilities of bringing skilled workers to Alberta from the U.S.
“We’ve had discussions with a number of labour organizations in Chicago who’ve been doing work with decision-makers in the United States – and with the Canadian and U.S. ambassadors – to try to find avenues where we might be able to accelerate access of skilled labour into Alberta,” she said.
Canada’s Temporary Foreign Worker Program was implemented to attempt to deal with the labour shortage head-on, allowing Canadian companies to hire foreign workers temporarily to fill these vacancies.
Though bringing in foreign workers on a temporary basis may remedy immediate labour needs, it does not address the labour shortage in the long term. Mike Rowe, an advocate for American investment in trades, believes the biggest problem stems from the lack of young people interested in skilled labour jobs, and the stigma associated with these trades:
“Millions of parents and kids see apprenticeships and on-the-job-training opportunities as ‘vocational consolation prizes,’ best suited for those not cut out for a four-year degree,” he said. “And still, we talk about millions of ‘shovel-ready’ jobs for a society that doesn’t encourage people to pick up a shovel.”
By focusing efforts on training programs in skilled trade through vocational education and apprenticeships, Canada could find more youth going down a skilled trade career path. If skilled trades could be legitimized and popularized in the minds of Canada’s young people, the influx of students pursuing skilled apprenticeships could help ease some of the stress on industries that rely heavily on these positions.
However, getting more students to pursue careers in skilled trade will not happen immediately. So what can companies do now to help address the labour shortages?
Over the past three years, Barrick Gold Corp. has been on a maintenance
improvement journey, taking important steps to improve its maintenance
function. Here’s why and how.
Barrick is the world’s largest gold mining company by production and
reserves. It’s a Canadian company with its head office in Toronto, but
Barrick is truly a global company with 26 operating mines and numerous
development projects and exploration activities worldwide. Its vision is
to be the world’s best gold company by finding, acquiring, developing
and producing quality reserves in a safe, profitable and socially
responsible manner.
The Maintenance Challenge
It should not surprise you to learn that the mining industry is capital
intensive. Indeed, Barrick has billions of dollars invested in plants,
equipment and infrastructure. One large haul truck may cost more than
$2.5 million, and Barrick has hundreds of them. A single large tire can
cost $60,000. We are currently investing about $7 billion to build two
large new mines: Pueblo Viejo in the Dominican Republic and Pascua-Lama
on the border of Chile and Argentina. All of this plant and equipment
requires on-going maintenance for peak performance and maximum life, so
maintenance is one of the largest costs in our business.
The mining environment is rugged and it’s tough on equipment. Blasting
and digging generates a lot of dust. Operating conditions include
temperatures ranging from –40°C in the mountains of South America to as
high as 50°C at some of our Australian sites. Some operations are at
high altitude — up to 5,500 metres above sea level at our South American
operations. In all of these conditions, our equipment works hard. These
conditions can affect reliability and performance. In every sense of
the word, our maintenance challenge is significant!
Good maintenance makes good business sense because it improves safety
and equipment reliability, and that improves production uptime. Planned
and regular preventive maintenance ensures safe and smooth running of
equipment and processes.
Lack of proper maintenance can result in bad outcomes in terms of
safety, production and cost. When we experienced a number of
mobile-equipment fires, we initiated a major review of our maintenance
function and found areas for improvement. Our analysis showed a high
level of unplanned maintenance, so we recognized we could reduce our
costs with better planning and scheduling. We saw the need to improve
training and career opportunities for our maintenance staff to improve
their effectiveness and encourage retention.
Barrick, like many other mining companies, has often grown by
acquisition. The result was a variety of approaches and practices at
various sites. We realized we needed a common set of standards and
systems across the company, as well as a standard set of key performance
indicators to evaluate and manage performance. We needed to focus on
reliability and develop a true strategic asset management approach.
Starting the Journey
So we set out on a maintenance journey. The first step was recognizing
these issues and acknowledging the value of the maintenance function. We
mapped out the existing maintenance situation at our sites, documenting
lists of people and structures.
We brought together the maintenance leaders from each region for a
global meeting to start the conversation about how to improve the
maintenance function. It was an opportunity to understand their issues
and challenges — and to offer support to help drive improvement.
Involving everyone up front was critical for gaining momentum for this
program.
At the same time, we presented the case to the senior leadership team.
Several key points gained their support. Poor maintenance was creating
safety issues, such as equipment fires. Poor maintenance was causing
breakdowns that interfere with production. Our current spend on
maintenance was high because of the percentage of unplanned work. With
improved practices, we could actually reduce the overall annual
maintenance costs over time. The leaders saw the value and made
maintenance improvement a priority for the company.
We developed an asset management policy in consultation with our
regional maintenance leadership team. It states our fundamental
principles about management of our assets from design to disposal. The
policy conveys our belief that all equipment failures are preventable.
It also commits the organization to develop clear policies and standards
and to provide leadership for implementing the asset management
strategy across the organization. It’s signed by our senior executives.
This one-page document became our mandate. We distributed it widely, and
it’s posted at Barrick sites and regional offices worldwide.
Working with the regional teams, we developed our maintenance management
system in late 2009. It sets out the company’s minimum standards for
maintenance across the organization. It’s a very useful guide that helps
maintenance leaders put the right plans and structures in place to
achieve good results. It sets standards for nine key areas, including
leadership, structure, strategic planning, performance measurement and
others. The system also recognizes the interdependence with other
functional areas, such as production and supply chain.
To help everyone work in a standardized way, we needed to implement
standardized business processes. We worked closely with our supply chain
colleagues to define and enhance our business processes. Then, we
needed a single computerized maintenance management system (CMMS)
platform — which at Barrick is the Oracle eAM.
Tools and Training
Fundamental to a good business process is the fact that everyone must
know and understand their job responsibilities. We reviewed our
organizational structure to align the roles and responsibilities across
corporate, business regions and sites. Our maintenance management system
outlines the recommended organizational structures to support
maintenance. We identified gaps and filled those positions.
As we proceeded, we recognized we had a shortage of mechanical and
electrical engineers. But just adding more people was not enough. We
also needed to make sure their roles were clearly defined and that we
had a support structure of training and career development to help them
succeed.
We prepared information and tools to help them do their jobs. We
developed a set of maintenance standards that cover most of the key
topics. These are intended to answer the question, “What does the
organization expect from us?” We also developed a series of guidance
notes on how to implement important tasks. These are intended to answer
the question, “How do I do that?”
We organized all these standards, templates, reference materials, and
tools into a Maintenance Knowledge Centre on our company’s intranet
site. We included a global contact list, which makes it easy for them to
contact each other to discuss common problems and share information. We
intend to build on this sense of community through collaborative forums
in the future.
The centre includes a set of computer-based training modules on a range
of topics, including basic mining, diesel engines, financial analysis,
project management and more. We worked closely with some of our OEMs to
ensure the training relates specifically to the equipment we use. The
modules follow the curriculum for our in-house graduate engineering
training program. Each module has a questionnaire that must be completed
by the graduate program participants. We track the traffic to see which
documents and tools people use. This information helps us enhance the
site. All employees, not just maintenance staff, have access to the site
and the modules so they can increase their knowledge of maintenance and
engineering.
Marketing Our Maintenance
To promote maintenance across the organization, we worked with the our
communications department to produce professional materials and to
announce our progress through features stories on the intranet and in
the corporate global newsletter. These efforts helped us gain and
sustain momentum for the program.
The publicity has raised the profile of the maintenance function within
Barrick and has helped our maintenance employees feel recognized and
appreciated.
We Are Now Here
Members of the global maintenance team have now visited every Barrick
site to conduct a site review. During these visits, we assess the site’s
activities against the requirements set out in the maintenance
management system. We discuss the results with the site managers and
develop plans to address any gaps. We don’t approach this like an audit;
we approach it like a coaching session. We are there to help the site
improve. We monitor the results and document the improvement actions.
We have just commenced our second round of site reviews, and we will
track the progress since the first review. The results so far have been
encouraging as sites show considerable commitment and improvement. In
addition, we recently surveyed maintenance leaders across the
organization, and we will use their feedback to further improve.
We’ve come a long way on our maintenance improvement journey. We have a
lot of the key foundation elements in place — policy, systems,
standards, site reviews, training and other processes. All of our
business regions and sites have plans in place to drive maintenance
improvement.
The challenge now is to keep the momentum going. It takes time and hard
work to implement change in any large organization. We want maintenance
improvement to become part of Barrick’s culture. This will ensure work
will continue and be independent of individuals.
We are pleased at the progress we have made so far and still have some
distance to travel — but we know we’re headed in the right direction and
we’re determined to get there. Our success will be rewarding for
everyone in the maintenance function, and it will create significant
value for our company.
Robert Cronin is the senior manager of maintenance at Barrick Gold Corp.
in Toronto. For more information, visit www.barrick.com.
In
an effort to support mobility and retention within this sector, such
talents will now be officially documented and recognized through a
newly started mining-credentials program.
Employees from seven different mine sites across Canada are the first
group of mining workers to receive national certification through the
Canadian Mining Credentials Program. A collaborative effort by mining
employers, employees, educators and other stakeholders spearheaded by
the Mining Industry Human Resources Council
(MiHR), the program is the cornerstone of the mining industry’s efforts
to recognize the skills, knowledge and experience of its workforce.
The group represents a selection of Canada’s first underground miners,
surface miners and minerals processing operators to achieve nationally
recognized certification. This is an historic event in Canadian mining
because, until now, unlike the trades, skilled workers in these
occupations have never before been awarded an industry-recognized
credential that supports mobility and retention within the mining
workforce.
The certification program was founded on a set of industry-developed
National Occupational Standards, which have been developed for three
key mining occupational areas: underground miner; surface miner and
minerals processing operator; and diamond driller. A needs assessment
will be conducted in the future to determine the requirements for new
National Occupational Standards. MiHR is hoping to test certification
for diamond drillers in late 2011.
The first of its kind for this country’s mining industry, the
certification program requires workplace demonstration of employees’
skills and provides these workers with portable credentials based on
their experience and competency levels.
“For decades, mining has played catch up to a number of competing
industries that have clearly defined career paths and skill sets and
competencies that are recognized and valued,” explains Ryan
Montpellier, executive director of the MiHR Council. “Mining workers
are highly skilled, working with multi-million dollar equipment and
operating in a complex environment, yet their skills and competencies
have gone, for the most part, unrecognized, and certification is going
to change that.”
The certification pilot program began in 2010 at seven mine sites
across Canada with the identification and training of workplace
assessors, the creation of assessment tools and the testing and
evaluation of the program. More than 100 workers were certified in this
pilot at the following locations:
• Cementation Canada Inc: Totten Mine in Sudbury, Ont., and Trout Lake Mine in Flin Flon, Man.
• Rio Tinto: Diavik Diamond Mine in Yellowknife
• Teck Coal: Greenhills Operation in Smithers, B.C.
• Northgate Minerals Corp.: Kemess South Mine in Toodoggone, B.C.
• Teck Resources: Highland Valley Copper in Logan Lake, B.C.
• Xstrata Zinc: Brunswick Mine in Bathurst, N.B.
According to the pilot program’s participants, certification is something both employers and workers have been waiting for.
“Unlike a tradesperson that goes through an apprenticeship to gain
their qualifications nationally or provincially, equipment operators
have to endure the same training over and over every time they start
with a new company. For some, this can be frustrating because they have
done the same job for many years,” explains Jerrold Jewsbury, safety
coordinator for Kemess Mine.
“Through the MiHR certification process, the equipment operators have a
similar opportunity as the trades to carry a [nationally recognized
credential] in their profession, giving them the recognition that they
have earned and deserve for the past many years in the industry,” he
adds. “By working together with MiHR, we are bringing a sense of pride
and accomplishment back into the workforce.”
Jewsbury, also the site’s workplace assessor in the pilot program, says
certification will have a positive impact on Kemess employees as they
begin transitioning to new jobs when the mine, which has been operating
for 14 years, stops production and closes in mid-2011.
Rick Gibson, superintendent of mill operations at Teck Highland Valley
Copper, agrees that certification will benefit both workers and
companies, as it provides employers confidence when hiring new
employees that they have demonstrated skills to a nationwide competency
standard. “As well, certified workers have portable credentials that
will improve their employability at mines across the country,” he says.
MiHR’s latest research estimates that between now and 2020 the mining
industry will require approximately 100,000 workers to support growth
in the industry and replace retiring workers. Approximately 20 percent
of these new hires will be required in skilled occupations that have,
until now, lacked a national recognition system, including production
miners, development miners, heavy equipment operators and mill
operators.
The certification program will be an essential component in increasing
and retaining the valuable skills required to keep the mining industry
sustainable. Without a formal credentialing framework for these jobs,
employers may struggle to evaluate the qualifications of experienced
candidates and may end up wasting time and resources retraining new
hires in areas where they have already demonstrated competency in the
workplace. Furthermore, employees with skills sets that are not
recognized by their industry can become frustrated and may seek
opportunities elsewhere. A recent MiHR survey of mining industry
employers revealed that turnover in these occupations is almost twice
as high as other mining sector jobs.
“Certification is a means of recognizing that the worker has met the
National Occupational Standards for the industry, as designed and
validated by mining employers across Canada. It is very important to
industry that workers can now be measured using the same standard,
allowing us to quickly identify training needs and hire workers with
proven experience,” explains Denis Beaudoin, corporate director of
health and safety at Cementation Canada Inc.
Local recognition ceremonies took place between February and April 2011
for each of the pilot sites to celebrate the achievements of program
participants and to award certificates. All certified workers received
a certificate, wallet card, lapel pin and a skills passport documenting
their skills and competencies. These local events fostered a sense of
accomplishment and mounting excitement about the opportunities
certification will create for workers.
“The common denominator was the look of pride and strong sense of
recognition on the part of each recipient, as well as the employer. At
several events, children of the certificate recipients expressed
newfound respect for their parents’ work,” explains Barbara Kirby,
MiHR’s senior director of workforce development, who is leading the
development of the program and attended each of the recognition events.
“It was very moving and touching to be a part of each of these
recognition events.
“The certification program sends a clear message to Canadians that if
you work in mining you will have a recognized and valued career — not
just a job.”
MiHR’s current plan is to begin a pan-Canadian rollout of the program in the fall of 2011.
Some of the challenges maintenance departments face in the oil and gas sector come from international competition for skilled resources (“the brain drain”), an aging workforce and working in one of the harshest industrial environments for most of the year. In the global industrial market, young engineers are seeking international experience and a work-life balance, which is a much higher priority than previous generations. Acquiring the talent and expertise needed to tackle maintenance on all fronts is a growing challenge in Canada.
Product-oriented companies slow the pace of research and development (R&D), as the existing technologies aren’t fully understood or adopted. This in itself is a risk in relation to a potential brain drain, as other countries are higher adopters and adapters of the same technologies.
It is therefore key that operators and third-party operations and maintenance solutions providers communicate and collaborate successfully. Where there is a lack of collaboration, the result is a slower pace of improvement, less technology transfer to enable greater reliability and lower unit costs. There is a gap between technology availability, uptake and resultant plant optimization.
Lack of speedy access to the Canadian industrial markets will turn some niche third parties to other international markets, resulting in the loss of expertise and potential to innovate. The inability to tackle multi-factor productivity issues will continue to add to the cost of production, which needs to be addressed through simple but effective management, training, systems and processes.
Some sustaining capital projects will result in third parties unable to deliver in a lump-sum environment. While this approach may stir competition and supposed cost certainty, it will inevitably drive some companies out of business as they move from a cost-reimbursable to lump-sum environment without requisite project management and project controls expertise.
What role does the operator have to play in pursuit of improved outcomes? Simply put, plants need to be operated within their design parameters and managed as a complete system. All too often, production is king - and then the inevitable occurs, resulting in plant downtime. A systematic approach to technical integrity is important for attaining business sustainability in any plant environment. This approach must have a maintenance and reliability regime, which is underpinned by systems and processes that consider safety followed by production priorities. Also, conditioning-monitoring systems that generate meaningful information - in order to predict outcomes that can avert unplanned failure and resultant loss of production - are important success factors.
Requests made to third parties often lack a long-term perspective. Short-term fixes aren’t sustainable.
Equipment is often procured without a full understanding of its operating and maintenance requirements. There is also a lag between implementation and the integrity of maintenance-management system data. This often creates earlier-than-expected failures, and it becomes the responsibility of maintenance to fix them.
Operators need to create a learning environment for both client and third parties to enable collaboration, and for a culture of accelerated improvement to prevail. This is essentially about knowledge management and retention. In the 1990s, the North Sea underwent a revolution in terms of collaborative performance-based contracting. This was driven by operators enabling the delivery of higher standards of services, quality, value and, ultimately, significantly improved reliability and lower unit costs.
This type of value-based environment is essential in Canada, whereby industry goes beyond traditional command and control of third parties to a more integrated and collaborative environment. Lessons learned should be captured and not repeated. This requires total transparency and greater outcome focus on the long term through robust relationships at all levels.
Performance-based, third-party delivery requires a clear alignment and understanding of business objectives, goals and targets. This means higher levels of plant education, training and measurement to deliver year-on-year value-add in an environment where high levels of trust are prevalent, as healthy contract governance exists at executive and operational levels.
What role do third parties have to play in pursuit of improved outcomes? The most important role is to understand your customers’ short and long-term needs and view these within a value-based relationship framework. The second important role is to ensure that you not only have the knowledge, systems and processes but also the capacity to deliver consistently.
Most operators are looking for long-term relationships whereby organizations can mature together and complement each other in a sustainable manner. In a highly resource-constrained market, adding value can be created in numerous ways. The solution may require collaboration between like-minded third parties to create a full services capability and, just as important, greater capacity.
The future for third parties is in the value-add rather than the volume of business generated, which was previously the driver. Niche specialists, or large players that bring global expertise to bear in a timely and efficient fashion, will dictate the third-party market. The use of low-cost engineering services has not been fully exploited in the Canadian market but will become a necessity going forward. Global third parties focus on major projects around the world and place their best resources where the highest returns are to be attained.
The use of temporary foreign workers will continue to be a feature, particularly in the oil sands and other heavy industry sectors. This is due to the frequency and scale of turnarounds and sustaining capital projects. And competition for resources will be stiff due to the number of projects internationally, as well as the number of tradespersons retiring over the next 10 years globally. It’s estimated that there will be a shortage of 20 million tradespersons by 2020 within the major industrial countries.
Operators will seek alignment to their business objectives, which will be measured through performance-based contracts using key performance indicators (KPIs) within a balanced scorecard arrangement. The challenge for third parties will be to ensure that the KPIs are well understood and a robust risk management regime is implemented prior to agreement. This understanding will help ensure profit and overhead is transparent to all parties and the risk and reward structures (pain share and gain share) are managed in a disciplined manner. The level of risk undertaken could be the difference between success and bankruptcy for smaller niche organizations.
Canada has the opportunity to rapidly develop its industrial maintenance environment beyond what exists today. These changes have occurred in many other countries. Canada needs to compete globally to address its skill shortages during a climate of relative resource availability.
The challenge for third parties will be to sustain a position where value is recognized and remunerated accordingly in a climate of increasing global competitiveness.
These factors can be overcome by close collaboration and integration with other third parties that bring international experience and the appetite for change and accelerated improvement to Canada. Performance-based contracting is a proven means of delivering such improvement, but requires trust, business alignment and collaboration to deliver the necessary plant reliability and unit-cost-reduction outcomes.
The level of integration between operators and third parties will depend on complementary skill sets, performance and the appetite to execute within a culture of accelerated improvement. This will need to occur rapidly in order to keep up with industry growth aspirations particularly in the oil sands sector. To deliver world-class performance in a sustainable manner, value partnerships will become a common theme and a necessity.
Andy Mackintosh is executive general manager of Transfield Services and former president and CEO of FT Services (www.ft-serv.com).
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TORONTO - If the longest journey begins with a single step, then surely the best high school video competition in Ontario begins with a single click on the computer. The Ontario Mining Association (OMA) recently launched an advertisement for its 2010 "So You Think You Know Mining" video contest on Facebook.
CALGARY, AB - Entero Corporation (Entero), developers of MOSAICTM asset management software, announced a MOSAICTM software donation valued at $700,000 to SAIT Polytechnic. A student scholarship for Bachelor of Applied Technology Petroleum Engineering (BAPT) students in SAIT's MacPhail School of Energy has also been established.
Calgary, AB - SAIT Polytechnic wants to show future students what they will look like growing old in a career they love. The Seniorizer, a new Facebook application created by SAIT, allows users to preview what they may look like in their elderly years, complete with crow’s feet, glasses and laugh lines. The application allows users to upload a photo and age themselves; creatively demonstrating SAIT’s marketing tagline, ‘Get a career you’ll never want to leave.’
Calgary, AB - CSA Standards officially announced a new, comprehensive publication designed to help manage the security of land-based pipeline systems and assets from vandalism, sabotage and other security threats. Transnational pipelines connect across much of the Canada-U.S. border with more than 540,000 km of pipelines in Canada and nearly 805,000 km of oil and gas pipelines in the U.S. The first standard of its kind in North America, Security Management for Petroleum & Natural Gas Industry Systems is designed to help protect and secure industry systems located in Canada.
In
an effort to support mobility and retention within this sector, such
talents will now be officially documented and recognized through a
newly started mining-credentials program.
