Rotating, Not Relocating: Alberta's Oil and Gas Rotational Workforce
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PetroLMI’s latest HR Trends and Insights report, Rotating, Not Relocating: Alberta’s Oil and Gas Rotational Workforce, highlights that Alberta’s rotational workforce is not a temporary business choice, but rather an ongoing business requirement that supports industry growth and Canada’s economic well-being. Interested in downloading the full report? Check out careersinoilandgas.com/reports!
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Rotating, Not Relocating: Alberta's Oil and Gas Rotational Workforce
- 1. ROTATING, NOT RELOCATING ALBERTA’S OIL AND GAS ROTATIONAL WORKFORCE Summer 2015
- 2. ACKNOWLEDGEMENTS AND DISCLAIMERS This slide deck presents data and insight into Alberta’s rotational workforce for the oil and gas industry, which is taken from the Rotating, Not Relocating: Alberta’s Oil and Gas Rotational Workforce report. The report is funded by the Government of Alberta’s Ministry of Jobs, Skills, Training and Labour and the Government of Canada’s Sectoral Initiatives Program. This report describes the nature and experience of Alberta’s oil and gas rotational workforce that reside in camps. And it attempts to demystify what has become an established industry practice where little information exists. Disclaimer: • The viewer of this slide deck has permission to use limited labour market information (or LMI) content for general reference or educational purposes in the viewer’s analysis or research reports. “Limited LMI Content” is defined as a maximum of three slides or data tables/graphs from this slide deck. Where Limited LMI Content is used, the viewer must cite the source of the Limited LMI Content as follows: Source (or “adapted from”): The Petroleum Labour Market Information (PetroLMI) Division of Enform Canada, name or product, catalogue, volume and issue numbers, reference period and page(s). The viewer of this slide deck cannot however: • Market, distribute, export, translate, transmit, merge, modify, transfer, adapt, loan, rent, lease, assign, share, sub-license or make available to another person or entity, this slide deck in any way, in whole or in part • Use this slide deck and its contents to develop or derive any other information product or information service for commercial distribution or sale • Use this slide deck and its contents in any manner deemed competitive with any other product or service sold by PetroLMI • The information and projections contained herein have been prepared with data sources PetroLMI has deemed to be reliable. PetroLMI makes no representations or warranties that this report is error free and therefore shall not be liable for any financial or other losses or damages of any nature whatsoever arising from or otherwise relating to any use of this slide deck. • The opinions and interpretations in this publication are those of the PetroLMI and do not necessarily reflect those of the Government of Alberta or the Government of Canada. 2
- 3. FACILITATOR Caileigh Rhind Communications Advisor caileigh.rhind@enform.ca 3 PRESENTERS Carol Howes Vice President – Communications and Vice President of PetroLMI carol.howes@enform.ca Emma Monaghan Interim Project Manager, Labour Market Information emma.monaghan@enform.ca
- 4. AGENDA • Overview of PetroLMI • Scope and purpose of research • Findings from research • Wrap-up and questions 4
- 5. PETROLEUM LABOUR MARKET INFORMATION – A DIVISION OF ENFORM CANADA • PetroLMI is leading resource for labour market information and trends in the Canadian petroleum industry. • Our mandate is to collaborate with industry, government, educators and training agencies to support and advance the development of a sustainable, skilled and productive workforce in the upstream and midstream sectors. • We specialize in providing petroleum labour market data and insights, as well as occupation profiles and other resources for workforce and career planning. • PetroLMI forms a division of Enform Canada. Enform also works collaboratively with the upstream oil and gas industry and connects hundreds of thousands of people to safety training, resources and services. 5
- 6. OUR EXPERTISE We produce the following LMI products: Labour Market Outlooks: Employment and hiring projections for total industry and by core occupation, key province and sub-sector. Supply projections and gap analysis for total industry and by core occupation help identify risks and opportunities. HR Trends and Insights: Intelligence on current and short-term labour market conditions and HR trends within Canada’s oil and gas industry. Career profiles: • Profiles of current and future occupations within the petroleum industry • Specialized tools to map career paths and measure skills and qualifications transferability 6
- 7. PURPOSE • Overview • Funded by the Government of Alberta and the Government of Canada’s Sectoral Initiatives Program • Little reliable, statistical data available • Report includes existing research and additional primary research and qualitative data to provide ̶ Increased understanding of rotational work and camp life and social and economic impact on communities ̶ Insight for decision makers as to why the rotational workforce is necessary 7
- 8. METHODOLOGY • Primary sources – Multiple interviews – industry, government and camp providers/workers – On-site visits and consultations at work camp locations – Survey of camp providers in conjunction with Manufacturers Association for Relocatable Structures (MARS) – PetroLMI oil sands company headcount survey • Secondary sources – Considerable review of literature sources, both domestic and international 8
- 9. ROTATIONAL WORK Research scope • The rotational workforce in Alberta’s oil and gas operations sector; excludes construction sector. • Focuses on workers who “fly in, fly out” / “drive in, drive out” / “bus in, bus out” and are living in work camps (open or closed) during their work rotation. Definition • A work arrangement that allows workers to have a set number of days at a given work site, allowing them to return home at the end of their work schedule for a set number of days or time off. • The majority of rotational workers are “fly in, fly out” / “drive in, drive out” (depending on the nature of their commute) as their place of residence is often far from their place of work. 9
- 10. IMPORTANCE OF ROTATIONAL WORKFORCE • The rotational workforce is critical to success in Alberta’s oil and gas industry. • Accessibility: Allows companies to respond to changing labour and skill requirements throughout project life cycles. • Flexibility: Provides industry with a flexible workforce that adapts to varying workloads and locations. • Nature of work: Ensures full crew on site at all times for continuous 24/7 operations. 10
- 12. FACTS AND FIGURES Tax filer data – interprovincial workers vs in-migrants Workers are rotating, not relocating. Number of interprovincial workers in Alberta increased by almost 100% from 2004 to 2008. 12
- 13. Tax filer data – interprovincial workers vs in-migrants 13 • The percentage of Alberta’s oil and gas extraction and support service workforce from outside the province is consistently higher than the industry average. • But, in 2008, the construction industry had the highest percentage of rotational workforce at 14.1%. • In 2004 and 2009, interprovincial workers in agriculture, forestry and fishing sectors were higher than oil and gas levels. FACTS AND FIGURES
- 14. FACTS AND FIGURES Tax filer data – demographics 14 2004–2009, some demographic shifts in Alberta’s interprovincial workers are evident. • More of Alberta’s rotational workers are older and married or in common-law relationships. • Largest percentage of respondents were between 50-54 years of age.
- 15. FACTS AND FIGURES • 2012 Census – identified 88 project accommodations – 74 occupied and 14 vacant – Majority of camps located in Northern Region (30,323) than Southern Region (8,948) • 2014 shadow population count identified 122 project accommodations – 39% increase in 2 years • Almost 61% of respondents indicated improved/ affordable housing key factor for relocation. 15
- 16. FACTS AND FIGURES • In 2012 census, shadow population count estimated at approx. 39,000 • In 2014 number rose to approx. 47,000 – increase of nearly 41,000 workers since shadow population research began in 2000 16 Regional Municipality of Wood Buffalo
- 17. FACTS AND FIGURES Regional Municipality of Wood Buffalo Geographical location Demographics • 83% of rotational oil sands workers male • 52% married or in common-law relationships • 14% between ages 50-54 years old 17 49.3% of workers living in project accommodations from out of Alberta 48.7% of workers in project accommodations from Alberta 2.0% of workers from outside Canada
- 18. GENERAL OVERVIEW – WORK ROTATIONS • Providing choice to workers leads to improved worker attraction, retention and productivity. • Work rotations vary by industry sector, nature of work and worker preferences. – E&P – considerable variation – Oil sands – 7/7 and 14/14 most common – Services – on-shift hours exceed off shift hours e.g. 22/13, 14/7 – Pipelines – limited use of camps; use open camps as needed • Multiple schedule options enhances attractiveness to employees. • Employees who live far from worksite prefer longer rotations. – Allows them to cut down on travel hours and maximize time off • Reducing the number of worker commutes, reduce costs to company. 18
- 19. GENERAL OVERVIEW – TRANSPORTATION Companies provide transportation arrangements to get workers from pick-up hub to operations site. • Benefits: – Reduces road traffic and leads to increased safety in operational areas. – Ability to attract workers from broader geographic regions. • Travel modes – commercial flights, crew/company vehicles or contracted bus services. • Operations companies cover travel costs from the hub to site. • Construction and maintenance companies pass part of costs onto workers but offer Living out Allowance (LOA) or expense reimbursement. 19 Transportation Modes: FIFO: Fly in, fly out DIDO: Drive in, drive out BIBO: Bus in, bus out
- 20. GENERAL OVERVIEW – CAMPS Two main categories: Owner/Company Camps Open Lodges (Offered by Camp Companies) 20
- 21. GENERAL OVERVIEW – CAMPS Owner/Company Camps • Permanent structures to support long-term specific oil and gas operations. • Companies usually contract operations/services to open camp operators. • Can be open or closed: – Open: rooms available for rent by other companies – Closed: rooms and facilities available only to the owner or company Open Lodges (Offered by Camp Companies) • Temporary structures as operations ramp up or down, shutdown or move. • Companies specialize in modular accommodation/construction. 21
- 22. GENERAL OVERVIEW – CAMPS Key characteristics of open and closed camps 22 Closed Camp Open Camp THE ENVIRONMENT IS STRUCTURED STANDARDS ARE SET BY A KEY CUSTOMER Private rooms with private bathrooms are standard Private rooms are a priority although there is some use of Jack and Jill dorms Workers have designated room for each rotation and a locker to store personal items Bathrooms range from private to semi-private to communal Executive wings with larger rooms are available Quality food and healthy choices offered with accommodation of allergies Quality food and healthy choices are offered with accommodation of allergies Some have recreation facilities Extensive recreation facilities are available Policies on alcohol tend to be dry Alcohol policies are set by the owner/company and may be wet or dry Internet services available
- 23. THE CAMP COMMUNITY • Remotely located sites enable companies to have control over workers well-being and safety. • Camps provide after work activities to encourage camaraderie. • Hospitality staff respond to situations that compromise behavior and fitness for work. • In owner/company camps, culture mirrors that of operating company. • In open camps, camp operators establish the camp culture with the help of experienced camp managers. 23
- 24. BUSINESS DRIVERS FOR COMPANIES • Location of operations - reliance on rotational workforce and camps – Remote locations (E&P, oil sands and services) – Closest communities cannot supply needed skilled workers – Nature of work/industry – Temporary work such as exploration, drilling and completions, and major capital projects • Competition and ability to attract/retain skilled workers from across Canada (and beyond) – Trend towards greater flexibility in rotations and high quality camp life • Safety – keep workers off the roads following long shifts • Rotations enable planning for camp/asset utilization 24
- 25. ROTATIONAL WORKER HEALTH AND SAFETY • Maintaining worker safety is a key driver for camps. • Focus on safety stricter is compared to sites where workers went home at the end of day. • After-work activities enhance emotional health of workers. • Equal work or time off rotations ensures appropriate worker downtime. • Irregular rotations negatively affect worker performance, alertness and sleep patterns. 25
- 26. QUALITY OF LIFE FOR ROTATIONAL WORKERS • Rotational lifestyle is not for all: – Need to have realistic perspective of benefits and challenges associated with rotational work. – Allows workers to be able to optimize the financial, social and lifestyle impacts. • Provides workers choice to decide where to call home. – Support network for employee’s family key to reducing potential impacts of rotational work. • Rotational schedule allows workers to engage in highly paid oil and gas industry work, while maintaining residence elsewhere 26
- 27. WHY WORKERS LEAVE • Work solely for financial reasons • Find rotations too stressful • Unable to handle time away from home • Frustrations with travel time requirements • Experience life-stage challenges (e.g. marriage, children etc.) 27 Turnover rates for the industry are unavailable. Oil sands survey: Turnover rates among rotational workers are the same or lower than non- rotational staff.
- 28. ANALYZING PERFORMANCE Different perspectives • Companies, camp operators and communities do not necessarily share the same views about the impact of rotational work arrangements. • As the industry’s need for camps and rotational employment continues, rising costs and scrutiny from communities and regulators could influence their practices. 28
- 29. ANALYZING PERFORMANCE Camp costs • Camp costs vary depending on type of business model – i.e. Owned or leased/open • Open Lodge – Costs are passed on to clients – Standards of food and facilities driven by client specification – Accommodation costs between $150 and $265 per day • Example of cost savings: Assess business case for camp location/size to optimize occupancy rate • Company Owned – Return on investment distributed over long term – Direct cost of room lower than open camp Examples of cost savings: • Decrease use of open camps and increase efficiency of closed camps • Need for quality construction and energy efficient buildings drive costs 29
- 30. ANALYZING PERFORMANCE TOP DRIVERS OF COST When Building A Camp When Operating A Camp Building and set-up costs Labour Labour Site services (internet, landlines) Transportation Infrastructure/maintenance (fuel, water, sewage haul, garbage removal) Site Services (Internet, landlines) Consumables (food, beverages, paper products) 30
- 31. ANALYZING PERFORMANCE Socio-economic impact on communities 31 POTENTIAL POSITIVE SOCIO-ECONOMIC IMPACTS OF CAMPS ON HOST COMMUNITIES POTENTIAL NEGATIVE SOCIO-ECONOMIC IMPACTS OF CAMPS ON HOST COMMUNITIES Employment and Business Local hiring and purchasing of equipment, goods and services is implemented. Employment and Business Hiring and purchasing supplies and services from larger metropolitan centres rather than local communities leads to the fly-over effect and can result in out-migration (i.e., residents may move to rotational hubs in order to access employment opportunities). Community Infrastructure and Services Improved community infrastructure and services through increased use. Community Infrastructure and Services Communities not adequately compensated for use of infrastructure and services, placing strains on host communities’ ability to provide these services for residents. Community Planning A coordinated, planned approach looks at opportunities to enhance support to communities. Community Planning Cumulative effects of multiple developments can impact host communities’ planning for infrastructure and services and have unintentional and undesirable social effects, including employment and skills shortages, shortages of affordable housing and social inequities.
- 32. COMMUNITY IMPACT AGREEMENTS AND BENEFITS FOR ABORIGINAL PEOPLE • Negotiated as part of municipal development approval process • Companies give back to communities by: – Supporting local initiatives – Partnering with community groups to provide local services – Encouraging employees to be involved in the local neighborhoods • Camp operators offer training for camp positions and job opportunities – Allows Aboriginals to enter new jobs while maintaining social and cultural environments. 32
- 33. LOOKING TO THE FUTURE • Data on work camps and rotational workforce is limited. The following could prove valuable: – Regular reporting which compares place of work to place of residence – Measurement of impacts on the community • Improving information gathering enhances proper workforce planning. • Minimizing community and environmental impacts and maximizing worker quality of life are integral to the workplace culture. 33
- 34. SUMMARY The practices associated with rotational workers in all sectors of Alberta’s oil and gas industry are driven by industry need and worker choice. 34
- 36. Rotating, Not Relocating • Released on June 29, the full report, Rotating Not Relocating: Alberta’s Oil and Gas Rotational Workforce, is available at www.careersinoilandgas.com/labour-market-information/reports/. • The report describes in more detail the nature and experience of Alberta’s oil and gas rotational workforce that reside in camps, including: – Drivers for the rotational workforce – Demographics – Community impacts – Analyzing performance 36 • The accompanying fact sheet attempts to demystify some commonly held misconceptions. 38
- 37. FOR MORE INFORMATION VISIT CAREERSINOILANDGAS.COM FIND US ON SOCIAL MEDIA @PetroLMI @CareersInOandG facebook.com/careersinoilandgas slideshare.net/PetroLMI
Editor's Notes
- What is LMI? Offers facts and insight into labour market through research and analysis of labour demand and supply data (may be broken down by occupation, geographic region, industry sector, etc.) Can include historical, demographic and forecasted data Identifies emerging workforce trends and labour shortages The Council’s LMI products can be downloaded by visiting www.careersinoilandgas.com (login/subscription required, but is free of charge). Other LMI products released in 2015: HR Trends and Insights: Falling Oil Prices and Decreased Industry Spending – Employment Impacts Petro Prices to Petro People Article Series
- Research scope: Though focus of the report is on oil and gas operations, construction and maintenance functions play a critical role in the industry, and the two sectors hire many of the same occupations Thus general references to the construction workforce are provided.
- Oil Sands has seen a growing requirement for a rotational workforce over the last decade due to the development of more numerous in-situ or thermal projects in Northern AB.
- One of the best available sources of data on Alberta’s rotational workforce is a study of interprovincial employees completed using tax filer information from 2004 to 2008. Limitations of tax filer data: Dated and uses tax filer information from 2004 to 2008 Hopefully being updated later this year. Does not identify Albertans who travel from their primary residence to another location in Alberta. Does not include self-employed workers Does not allow for analysis specific to the oil and gas industry. In 2004, approximately 67,500 workers from outside of Alberta had paid employment in the province making up 3.8% of Alberta’s employee base. By 2008, the number of interprovincial workers in Alberta increased to about 133,000 and made up 6.2% of the province’s workforce – demonstrating an increase of almost 100%. Although the number of interprovincial employees in Alberta declined when the industry downturn occurred in 2008–09, the number did not return to pre-2005 levels.
- This highlights that not all rotational workers work in oil and gas.
- Contrary to the common perception that Alberta’s oil and gas workers are generally young and single, more rotational workers are older and married or in common-law relationships. This shift in the demographic profile of workers living in project accommodations was also reflected in the RMWB census
- Project accommodations Rapid development of the oil sands sector drives need for camps Growth of workers increased between 2007 and 2008 Camps became necessity as need for workers exceeded housing capacity available
- The Regional Municipality of Wood Buffalo (RMWB) is the one region that has made significant progress in quantifying the number of rotational workers and camps in the area. Shadow Population: Workers who may reside elsewhere but work in the municipality for at least 30 days per year.
- The Regional Municipality of Wood Buffalo (RMWB) is the one region that has made significant progress in quantifying the number of rotational workers and camps in the area. Largest percentage of workers from BC (25%) Less than 9% were from Saskatchewan 16% from Newfoundland 15.5% from New Brunswick 12% from Nova Scotia
- Work rotations and travel arrangements to lodges or camps are individually determined by companies and tend to vary by the industry sector, nature of work and worker preferences. The rotational schedule, made up of the number of days off and the number of days on, plus the daily shift schedule, is set by the company. Equal work/time-off rotations are conducive to ensuring optimal downtime.
- FIFO: Fly in, Fly out DIDO: Drive in, Drive out BIBO: Bus in, Bus out Oil sands operators in the Fort McMurray Area have been commended for not allowing personal vehicles on worksites as it reduces fatigue and congestion related traffic incidents.
- World-leading: Alberta’s industry and regulators have progressively evolved rotational workforce and camp life by minimizing community and environmental impact and maximizing worker quality of life through implementing best practices in safety, scheduling and accommodations, which are now integral to the workplace culture. Owner/company camps are for the sole use of the company and have spaces available for rent, making them open to other companies. Owner or company camps are considered closed if rooms and facilities are available only to the owner or company. They are more self-contained than open camps and provide a return on the owner’s capital investment over the long term. Some oil and gas companies, especially those in the oil sands, have their own water treatment plants and emergency services. Consequently, they will need fewer additional services than open camps, resulting in less strain on the resources of the nearest community. 2. Open Lodges offered by camp companies are operated and leased by camp companies. These companies recoup their investments by carefully managing their choice of location, occupancy rates and operational costs. Food, accommodation, facility and operational costs are passed onto clients who often have detailed specifications for what they require. Both types operate under different business models though they look the same on the outside.
- Industry/economic need: Rotational workers have become a vital and permanent component of Alberta’s oil and gas industry workforce Business need: Rotational work is not a temporary business choice but rather a permanent business requirement that allows for stability through flexibility. It provides a flexible workforce that can nimbly expand and contract with the rise and fall of oil and gas prices and changing needs in project location, size and skill requirements.
- -Workers reported working and living alongside co-workers leads to a culture of taking care of one another. -Irregular rotations or shifts have a more negative impact on worker performance and safety than either the length of rotation or length of shift. Affects worker alertness and sleep patterns – workers system or circadian rhythm does not have opportunity to adjust appropriately when shifts are irregular.
- Worker fit: Workers who have a realistic perspective of the benefits and challenges associated with rotational work are most successful and able to optimize the financial, social and lifestyle impacts. While a number of factors determine whether rotational work is a fit for different individuals, many workers actively choose and prefer the camp and rotational work lifestyle due to reasons such as increased salaries, lifestyle advantages for family, more vacation (greater flexibility in rotations) and premium accommodation. Making Lifestyle Choices: Decision on where to call home is based on types of recreation, social, education and medical amenities desired by worker and their families. Dual career families, rotations rather than relocation means one spouse doesn’t not have to interrupt or change their work situation to accommodate the other. Improving Financial Circumstances: Workers can maintain a primary residence in communities outside of the industry’s key operating areas and take advantage of lower housing and living costs
- In June 2015, PetroLMI conducted a survey of oil sands companies to better understand the use of rotational work arrangements for full-time operations employees. 12 oil sands companies representing 26,874 employees responded. Reasons why workers leave based on reports from employees interviewed and an Australian mining study.
- A survey of members of the Manufacturers Association for Relocatable Structures (MARS)30 provided insights into some of the major costs of camp facilities and operations.
- As outlined in the table, the socio-economic impacts on host communities can be viewed as positive or negative, which underlines the importance of working together to develop strategies to address potential challenges and maximize benefits. Benefits: A number of potential community, industry and worker benefits have been associated with camps and the rotational workforce: Company benefits include valuable tools for attracting and retaining skilled workers, business continuity despite fluctuations in economy, project size, project location and skill requirements. Communities receive a stabilizing factor and buffer for some of the boom/bust impacts that are common with resource development, in addition to other potential benefits like community development contributions. Workers and their families across Canada benefit through the improvement of financial circumstances, increased family lifestyle choice (home location not dictated by nearby job availability), increased quality time off with family, attractive accommodation standards and comforts, and more stringent standards and benefits in jobsite health and safety.\ Challenges: This report presents a balanced picture of the benefits and challenges of camp life and rotational work in Alberta. Perspectives between companies and communities diverged on whether impacts are positive or negative overall. Core challenges included adverse community impacts (strain on community infrastructure and services), and camp costs driven upward by increased competition for skilled labour.
- 1. Wandering River Breakfast Program : Prior to establishing the camp near wandering river, TransCanada reached out to the community to find ways they could provide assistance. Breakfast program was kicked off to provide local children of the Wandering River school with breakfast. 2. Camp Life Training Program, Blue Quills First Nations College: Teaches employment readiness for life in a camp and helps participants prepare for work in food services, housekeeping and administration roles.
- Next steps: Through collaboration with industry, government and community experts, more research is still required on the impacts of camps and rotational workers on local community health, policing and social services and the availability of support for workers to live locally.