International Partnership
As strong as the connections between Ledcor Pipeline and its sister companies are, they aren't enough to resolve the increasing pressure caused by the high demand for skilled labor in North America as in this market, all divisions are experiencing significant growth in unison. Partington says this is due to an unprecedented increase in  activity related to the continued development of Alberta's oil sands infrastructure, and in the case of Ledcor Pipelines, the associated pipeline systems to support this production growth required to move the product to refineries and subsequently the market.

“There are many large  projects being anticipated, and there's only a certain level of capacity available.” Partington says. Lassu adds that the pipeline construction industry faces a “distinct and significant shortfall in resources” if peak demand for pipelines hits the market as currently projected. The pipeline industry for the past decade has focused on maintaining its white-collar management as best it could in the lean times but did not have enough activity to develop new sources of skilled field labor, he says.

Lassu says the Ledcor Group has taken advantage of a Canadian program to boost its capacity to handle Alberta's growing backlog of work. “Canada currently has a temporary foreign worker program that they're administering in order to address skilled labor shortages in the economic environment that we're in right now,” he says. “[This is] really a contingency plan with a strategy to peak shave resource loading curves that cannot be met in the current labor market.”

What makes the skilled labor situation especially difficult is that government and trade apprentice policy prevent Ledcor (or any Canadian company) from enrolling or hiring trade apprentices without having a sufficient ratio of experienced journeymen on a specific construction site. “So if you have inadequate journeymen, you can't even bring on any more apprentices,” Lassu says. Most other  countries in the world don't have the same constraints, thus allowing the flow of skilled and unskilled workers to move much more freely into geographical regions to meet the local demands of the market place.

“Our challenges, given our local policies, are much more significant than anywhere else on the international stage,” Lassu says given his personal experience working overseas and various discussions with international construction entities. Companies in Canada planning to hire international workers must also demonstrate an extreme level of due diligence in finding suitable Canadian workers before hiring them from foreign sources.  This is a huge undertaking that is ever changing with a mobile work force in a hot labor market, and makes things very challenging to predict.

The Ledcor Group has established an internal company called Ledcor Workforce Solutions to coordinate the company's sourcing of domestic recruiting and international labor peak shaving. Ledcor Pipeline specifically has also decided to take a proactive approach to the situation. Its approach has been to enter into an agreement with SICIM. SICIM is a company based in Busseto, Italy, that builds and installs pipeline and other facilities for the transmission and distribution of oil, gas and water. SICIM has a history of international work, with offices in France, Spain, Ireland, Kazakhstan, India and Libya.

“The goal was to ensure that as one of the largest contractors in Canada, we are working effectively and proactively to provide our client base alternate solutions to their ever growing local demands,” Lassu says.

Partington says SICIM has already put equipment on the ground in Canada, and several of its managers are currently involved evaluating Ledcor projects to gain insight into  how the company operates and the local environment. He says the agreement with SICIM is new territory for Ledcor Pipeline, and the company isn't sure what form SICIM's cooperation will take in the future given the variables in labor supply and industry demand.

“It's something that we're exploring; we don't know exactly how that's going to play out at the moment,” Partington says. Whether it provides managerial assistance, equipment, manpower or a combination of all three, Partington says Ledcor is grateful to have SICIM lending a hand.

“We would look at whatever our clients need, and what SICIM can bring to the table,” Partington says. “We're not sure how it's all going to fit yet. We're just scratching the surface really as this is very foreign to Canada and our clients thus people are hesitant to make any significant commitments at this time.”

Lassu says the addition of experienced workers from overseas has given the Ledcor Group the chance to bring young people into the company in greater numbers and hopefully bring the number of experienced, skilled local Canadian workers up for the future needs of the industry. “The benefit is that we're creating opportunities for people to step into the training /apprenticeship programs earlier, and subsequently build up our domestic resources,” Lassu says.

Too Much Work?
Without many young workers coming into the industry over the protracted trough of inactivity, Ledcor Pipeline and the rest of the industry face an aging skilled workforce as do most industries in North America. At the same time, the explosion of work in Alberta has created fierce competition for the experience and abilities more experienced workers bring to the job site.

“The biggest change in the industry over the last couple of years has been the dramatically accelerated level of activity,” Partington says. “It's been very sudden, very fast and the slow period previous to the explosion of activity  lasted longer than previous curves.” 

This has been exacerbated by the lean period that preceded it, which caused many other pipeline companies and resources to leave the industry altogether. “Other companies who did not have diversified revenue streams really struggled through that,” Lassu says. “We've come out of a long period of low activity to a number of projects on the drawing boards as an industry but without the required skilled resources, it will be a challenge for anyone to succeed.”

“You've got two dynamics that are opposing each other,” Partington says. “One is the people leaving the industry as a result of demographics and the other is the need for skilled workers as a result of the high level of activity.”

Developments in the Fort McMurray area, driven by technology and high commodity prices, have provoked an increase in oil extraction, he says. “A lot of the opportunity we see is directly related to the need for liquid lines to move product to refineries and markets from the continued development of the tar sands.”

Lassu says that the company has a solid following of employees right now, but conditions may change. “The question will [be], as competitors take on work and don't have a recruiting /retention plan or work force following of their own, will they just throw money at the problem?” he says.  This does not create additional resources, obviously, it only adds to the inflationary pressure on labor cost.

“I think the entire pipeline industry is going through the same thing that Ledcor Pipeline is going through, and one of the biggest challenges we see on a daily basis is people, finding the resources in a busy market,” Partington says. “I believe this market is  unprecedented  and forecasted to  continue for several years.”

Lassu says that although compensation is certainly a component of Ledcor's retention plan, Ledcor is able to offer workers more than just a bigger paycheck. Sometimes, he says, when compensation is equal, it is the right culture and the breadth of the long-term opportunities that make all the difference to the employee.

“Our company comes from a family background and those roots are still there as we've grown into a much larger company,” Lassu says. Even though each branch of the Ledcor Group of Companies is independently operated with management teams focused on each specific industry, there is great emphasis placed on the interdependence between all the groups, Lassu says. Also maintaining a strong connection to a family based culture is the fact that Ledcor is 100 percent employee-owned, he adds. Of the Ledcor Group of Companies' approximately 6,000 employees, with 1,200 being salaried, nearly 500 of them own shares in the company.

“We're the only employee-owned company of our size in the pipeline industry that I'm aware of,” Lassu says. “[It] adds a lot of value.”

Because these shareholder employees have a vested interest in keeping Ledcor thriving and successful, Lassu continues, they tend to make better decisions than your average employee of a company who just receives a paycheck”. “I just think it gives a whole different perspective of the management team,” Lassu says. “They make decisions more on being a shareholder than being an employee. It is a very successful and motivating model. “