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Logging and Sawmilling Journal November 2014

December/January 2015

On the Cover:
Equipment manufacturer T-Mar Industries is addressing the increasing volumes of second-growth timber on steep slopes in B.C. with its new Log Champ 550 grapple yarder. The first Log Champ 550 is being used by new owners Southview Forest Services Ltd. on Redonda Island, on B.C.’s lower coast, yarding second-growth fir. (Cover photo and story photos courtesy of T-Mar Industries)

The forest industry worker gap—and becoming ‘cool’
The forest industry can no longer assume the huge workforces it has been used to in the past are still going to be there when it needs them. It now needs to capture the hearts and minds of its future workforce—in short, it needs to be considered a ‘cool’ and lucrative career choice.

Safety champion
Don Banasky, president of the Truck Loggers Association and vice-president of operations at fast-growing Tamihi Logging, is a champion of safety in B.C.’s coastal forest industry.

Winning the sawmill battle—and the war
Saskatchewan’s L & M Wood Products is winning the employee training battle, with a program that was actually designed for training people on the manufacturing line in World War II.

True multi-purpose head
B.C.’s Tolko Industries has been trying out the GP grapple processor head, produced by Pierce Pacific, and after six months the multi-purpose GP head has been able to prove its stuff successfully in two different types of trials in the B.C. Interior.

Canada’s newest sawmill revs upLakeland Mills’ newly completed sawmill in Prince George, B.C., is like no other sawmill built before it in terms of production, employing the very latest technology to attain the maximum recovery and value from its available wood fibre—but with a very strong focus on safety.

The New Lakeland Team

More stringent WorkSafeBC
investigation techniques being
introduced

Sinclar Group a PowerSmart leader

Lakeland’s—and the Sinclar
Group’s—rich community history

The Edge
Included in The Edge, Canada’s leading publication on research in the forest industry, are stories from the Canadian Wood Fibre Centre, Alberta Innovates - Bio Solutions and FPInnovations.

New grapple yarder for British Columbia loggers
Working with its industry-leading design expertise—and with an industry heritage reaching back decades—T-Mar Industries recently introduced the Log Champ 550, its new steep slope grapple yarder designed to take on the increasing volumes of second-growth timber in B.C.

Going four-wheeling with Waratah’s new head
Waratah’s new 622C 4x4 multi-tree processing head with four roller drive is getting solid praise from the folks at McNeil and Sons Logging in the B.C. Interior, where it makes for a solid harvesting combo with a John Deere 2154D carrier.

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Worker GapCanada’s forest industry worker gap—and becoming ‘cool’

The forest industry can no longer assume the huge workforces it has been used to in the past are still going to be there when it needs them. It now needs to capture the hearts and minds of its future workforce—in short, it needs to be considered a ‘cool’ and lucrative career choice.

By Kit Tan

For most of the past century, Canada’s sawmilling industry has excelled in its response to two major drivers—markets and process technologies. A third driver—labour shortages—has been emerging for some time, which accounts for today’s intensive focus on closing the ‘skills gap’.

This is a vital industry level response. But an even more fundamental challenge lies in attracting people into sawmilling jobs in the first instance and, of course, retaining them. On that score, we do not seem to be targeting the most promising demographics as well as we should.

Current best practices suggest that the fastest payback from these efforts may be at the company level rather than the more generalized industry level. After all, most young people think in terms of joining a specific company. And it’s the career prospects with that company that helps retain them.

Let’s look at what the Canadian lumber industry has done well traditionally. The first takeaway is manufacturers always have been sensitive to their markets. Peter Drucker may well have had our industry in mind when he outlined his Marketing 101 advice: “Make sure the customer gets what he wants, but make sure that what he wants is what you have”.

Isn’t that why Canadians are known as savvy traders? We get the product sold and shipped—and what we produce rarely is left as expensive unsold inventory back at the mill. As lumber producers, we ‘get the job done’.

To the industry’s credit, over the past decade it has achieved a significant upgrading in its sales culture. With more competition, sales departments now place increasing emphasis on meeting the emerging needs of customers—with new products such as CLT and new design concepts, including six-storey plus wood frame buildings.

Secondly, as Canadians, we are technology groupies. We love process technologies! If we can produce an extra widget or save a dollar in costs by adopting a new technology, we’re all over it. That’s why we have the most productive sawmills in the world.

Canada’s equipment supply industry has gone through several cycles. We lost our initial leadership to Europe and elsewhere. But in the recent past, Canadian suppliers of sawmilling equipment have re-captured most of this leadership role.

It has helped that Canada’s sawmills are huge first adopters of high productivity technology, and we now have a much larger and vibrant OEM industry.

Worker GapThe Global Competitiveness ‘Playing Field’ is Changing

Over the past few years, however, Canadian sawmillers have been taught some humbling lessons. The first is, although we might have been ‘Numero Uno’ global producers of softwood lumber in the past, that is no longer the case today.

In the North American market, Canadian producers’ share of the SPF market —while still important—is declining. In the future, we will play second fiddle to the U.S. South. European supply is very high quality—but a distant number three.

In part, that’s why the bulk of new Canadian sawmilling investment over the past decade has been directed to acquisitions in the U.S. South. They can ship high quality product to major markets in days—vs. the weeks it takes us to deliver from Canada.

Of course, U.S. buyers want both SPF (a lighter, easier to handle species) and Southern Pine. Projections indicate, however, that SYP will capture market share for the next decade—for a number of well researched reasons that are beyond the scope of this article.

But then, we have to remember that at the depths of the U.S. housing downturn, Western Canadian producers pulled a ‘rabbit out of the hat’. They developed the China market.

This did two things. It reduced the traditional dependence of Canadian sawmillers on U.S. housing-related markets. It also helped B.C. Interior sawmillers sell a huge inventory of lower grade (#3) SPF lumber to fast-developing markets with a seemingly insatiable demand for cheap SPF lumber.

Without this, B.C.’s Interior lumber industry would not have survived the U.S. housing downturn.

The second humbling lesson we Canadians have been taught is that some of the resources that we took for granted in the past—including an abundant supply of low-cost trees—are no longer valid assumptions.

Labour Shortages are the ‘New Normal’

Leaving aside the issue of the future supply of economically accessible sawlogs, what we also have learned is that we can no longer assume that the huge labour force—and dedicated workforces that we have been used to in the past—are still going to be there when we need them.

They are not—and they will continue to diminish unless we change the way we think and the things we do. This is driver #3 of our industry, and possibly our biggest challenge yet.

In fairness, this will not be a surprise for most progressive forest industry firms. Among industry CEO’s views of their biggest future strategic challenges, human resource challenges have ranked tops for many years. The lurking danger to our future prosperity already is a well known foe.

Trouble is, it’s the same for all other industries. Horrors among horrors, many other natural resource industries seeking the same trade skills and managerial talents (such as Alberta’s oil patch) are able to outbid the B.C. forest industry for these HR talents.

Adapting to the New Realities: HR Policies, Not Trees, are Our Limiting Resource

Getting ahead of the competition in the HR game requires a vision about— and commitment to—the future of the wood products industry. Most companies know this, at some level. But not all are committed enough, and equipped, to do what is necessary at the HR level.

Among the more progressive—and Canadian companies increasingly fit this description—there is an emerging understanding that to be successful as rounded and sustainable global firms, they need to be pro-active, not reactive, in their HR policies.

Modern HR management approaches suggest four things about organizational effectiveness that are vital. We can summarize these under the acronym ‘ARRT’—respectively, meaning ‘Attraction, Recruitment, Retention and Training’.

In the past, the Canadian forest industry has performed adequately in some —but not all—of these vital categories. Very high comparative wages in sawmills and pulp mills—reinforced by trade union-enforced seniority rules —have assured the sawmilling sector of a statistically comfortable level of retention among the traditional workforce.

The ‘sleeper’ of course is the aging demographics that characterize our workforce today—and the diminishing attractiveness of the wood and forest products sector as a ‘cool’ and lucrative career choice. This exposes the weakness in our thinking about the ‘ARRT’ element in developing our future workforce.

In the forest sector ‘Field of Dreams’ on workforce development, if the jobs exist and the wages are attractive, will the applicants come? The answer sadly most often has been ‘no’. That’s wishful thinking!

HR recruitment policies must begin with capturing the hearts and minds of our future workforce. This is no small task in the modern-day forest sector! But it is a fundamental building block for getting on the radar of bright young professionals and skilled trades people, then nurturing the relationships to engage and recruit them into our industry.

Leading-edge HR practitioners in Canada’s forest sector already are addressing these issues. This bodes well for the future of our sector. Our Achilles heel, however, may be that not enough companies are dedicating sufficient or the right resources to this objective.

Short-sightedness in this regard—and too much of a focus on training for skills needs—could cost the B.C. industry and deprive employers and investors of what otherwise could be a very profitable and sustainable future.

Kit Tam is a senior associate at Woodbridge Associates Inc., with focus on research, strategy and planning. This is the first in a two-part series she is writing for Logging and Sawmilling Journal. She can be contacted at kt@woodbridgeassociates.com.

Worker Gap