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September 2006 - The Logging and Sawmilling Journal



Investments in human resource planning and skills training should be high priorities if sawmills and forest products companies want to remain competitive and avoid getting hit by the shortage of skilled workers that is already emerging.

By Kit Tam

In the past, Canada’s forest products industry has had to deal with a series of limiting factors: timber shortages, capital shortages, environmental challenges and, more recently, trade limitations on exports of Canada’s softwood lumber to the US market. However, an even bigger challenge is striking directly at the heart of forest industry operations. Critical human resource (HR) skills shortages have been building for decades. As challenging as all these other limiting factors may have been, the industry’s human resource skills shortages will be much more difficult to resolve. For starters, the skills issue is less tangible. It is more complex. And, in contrast to spending on new equipment, the benefits of investments in people are not guaranteed.

Sawmills often have to compete with other industries—such as Alberta’s oil sands—for skilled labour.

It’s no surprise that many employers are reluctant to spend money to address the problem. Yet, skills shortages permeate every aspect of mill operations. They could—more than any single previous limitation—threaten the sustained growth and longer-term global competitiveness of the Canadian forest industry.

The root of the problem is structural. North America’s population is aging. The forest industry is not perceived to offer satisfying careers. In the competition for fewer people and skills, the industry is increasingly unsuccessful in attracting, recruiting and retaining new talent.

In North America, the sawmilling industry’s historical “green chain” unskilled workforce has given way to a mix of semi-skilled and highly skilled workers. In modern mills (and value-added plants), capital has replaced lower skilled operations with knowledge-based and computer-literate staff. Some mills have yet to catch on, but a quick look at the BC Interior and the Pacific Northwest signals the way forward.

BC Interior “super mills” constructed over the past few years have introduced a new paradigm. Sawmills built in the BC Interior by Canfor, West Fraser, Dunkley Lumber, Tolko and many others push the envelope on operating hours—and productivity. They employ the most sophisticated and efficient equipment in the world. Now these approaches are being adapted for US West Coast timber conditions by state-of-the-art producers in the US, such as Sierra Pacific, Hampton Affiliates and Simpson Timber.

Today’s state-of-the-art sawmill employs an intensive mix of sophisticated capital equipment and skilled labour working a 120-hour week—effectively 24/7. Mill operations are fully integrated.

They are managed by a highly skilled technical and professional workforce. The problem is these skills have become highly leveraged. Being knowledge-based and qualified, these workers are also very mobile. They are courted aggressively, and with success, by recruiters from Alberta’s oil sands and other very high-paying manufacturing sectors.

A shortage of skilled workers can severely impact a mill operation.

Unfortunately, Canada’s forest products industry—at least so far—seems unwilling to develop the comprehensive policies and programs that are needed. It is failing to attract the highly skilled and younger workers vital to make these stateof- the-art mills sustainable over the longer term. To be able to attract the necessary skills, a fundamental shift in public sector/ private sector approaches to education and training is required.

At the core of the issue is that in North America, education is traditionally widely viewed as a free resource, and a public sector responsibility. We pay school taxes and expect the post-secondary public education system to churn out workers with the right skills, when and where they are needed—and at the right price. That’s the old model.

Leading-edge firms know better. They recognize that education and training are critical elements of today’s highly interdependent supply chain. And they are prepared to invest in people.

That’s why BC-based forest company Canfor recently announced the start-up of the Canfor Centre of Wood Frame House Construction in Shanghai, China. The centre is part of a major new initiative to create Chinese demand for North America wood products and construction systems. It does so by teaching woodframe construction techniques to local planners, developers and builders, and to brand the Canfor identity in China. The BC Institute of Technology (BCIT) is working with Canfor to deliver the required education and training—in China.

Generally, and with the recent exception of Canfor, companies outside of the forest industry have been quicker to grasp this concept. PCL Construction, Canada’s largest construction contractor and the tenth largest in the US, announced a donation of $1.25 million in March to enhance construction trades training in Western Canada. Funding is being channelled to leading educators in BC and Alberta, to BCIT, Northern Alberta Institute of Technology (NAIT) and Southern Alberta Institute of Technology (SAIT).

Washington Group International, an Idaho-based engineering company, invests $50 million annually on employee development. The program was conceived in 2001 when, facing financial instability, the company was awarded two contracts, each worth more than $500 million. CEO Steve Hanks immediately got on the phone to thank the clients personally. Asked why his company was selected when there were other bidders with far more stable futures, he was told: “We didn’t hire Washington Group because of its balance sheet……we selected you because of your people.” (Source: Workforce Management, February 2006)

Since 2002, Washington Group’s net income per employee has jumped 60 per cent. The company is expecting to exceed its goal of 10 per cent compound annual growth in 2005. And job applications have jumped from 2,000 a month to 5,000 a month.

What do these global players have in common with the average small and mediumsized wood products manufacturer?

They face the same fundamental problem— they can’t get on the radar screen of the high calibre employees they seek to attract. The obstacles are formidable. The forest industry does not rank uppermost in the minds of most entry level job seekers. Most news reports discourage high school students and new entrants from any thought of a career in wood products manufacturing. So, too, do many parents, teachers and school counsellors. The industry’s own attraction
and recruitment efforts are myopic.

Solutions to these structural problems are too complex to address in a brief article. But they are explored in detail in a multi-volume human resource sector study recently conducted by Woodbridge Associates (www.woodbridgeassociates. com) for the Wood Manufacturing Council (www.wmc-cfb.ca). The study focuses on value-added wood product operations, but many recommendations are directly applicable within the primary sector as well.

One important conclusion is the need for firms to develop and act on a formal Human Resources development plan. No matter how small the firm, an HR development plan increasingly is a vital management tool. Human resource development cannot simply be a response to production managers stating that they will need “x number of new workers, and y number of trades people.” Rather, any plans for significant growth in a firm’s workforce should be assessed in a wider context—namely, the appropriate balance between capital investment and labour intensive operations, and between unskilled/semi-skilled and skilled labour.

There is a critical role for education and training service providers in this equation. And trade associations can help too. Federal, provincial and state governments are highly supportive. But, at the end of the day, it is owners and managers themselves who must take the required action—and fund initiatives to ensure that their firm has the stable mix of highly motivated and productive talents that it needs.

Firms have to act sooner rather than later to avoid letting the growing shortage of people resources from becoming the
limiting factor that ultimately cripples their organization. Leading-edge firms think beyond this goal. They have strategic vision. For them, investments in people are the ultimate route to achieving a leadingedge, sustainable competitive advantage—globally.

Kit Tam is vice president, communications, at Woodbridge Associates Inc. (www.woodbridgeassociates.com). She can be reached at [email protected].


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