Too much of a good thing
Alberta's rich job market is making life next to impossible for entrepreneurs
By Derek Sankey
For the Calgary Herald
Paul Nielson and his wife Dayle Nielson run DumpRunner waste systems
but are struggling to attract staff.
Large corporations have been struggling to deal with the pressure of growing labour shortages, but entrepreneurs like Paul Nielsen face the same challenges and have scarce resources to adequately cope.
Small businesses are suffering as a result of the intense fight for talent and nowhere is that more obvious than in Calgary, says Nielsen, owner of a waste-management company called DumpRunner. "I think we're in the danger zone," says Nielsen, who left the corporate setting four years ago to pursue his entrepreneurial dreams. "A lot of entrepreneurs are being forced to look at alternative measures."
His company has expanded between 50 to 100 per cent a year since 2002, so he's not worried about finding clients to support his business.
"It's a cake walk in this economy, but I'm seeing some things that really scare me," says Nielsen, who built his business with his wife Dayle taking care of administration and filling in driving the company's trucks when nobody was available.
He's only got a handful of employees, so if one or two leave it creates a big headache for him. Unqualified people are demanding top wages that he can't afford to pay.
He is fighting against large corporations with much deeper pockets, particularly the oilpatch, which means he has to find other ways to attract and retain people.
It's so tough to find workers that his growth plans are basically dictated by his ability to hire new, qualified people.
"We have to manage our growth a lot better than we did before," says Nielsen.
Better management means constantly trying to keep his employees happy by offering a home-cooked meal in appreciation or being flexible with them.
Nielsen says he's always preoccupied with where his next worker is going to come from. "It reduces your focus," he says. "That's the real danger."
Nielsen has also had to invest in more efficient equipment to maximize the effectiveness of the labour he can find.
Laurie Robson, a partner with Borden Ladner Gervais LLP's Calgary office, receives a lot of calls from small-business owners like Nielsen, wondering how to handle the labour problem. It's a growing part of that segment of the law practice.
"The oil and gas industry is kind of sweeping up the workforce," she says. "It leaves a lot of holes and a lot of pressure on (small business owners). "It also leaves your retailers paying much, much more than minimum wage and having a revolving door of staff," says Robson.
Regular company outings, free tickets to sports games, dinners, team building events, employee referral bonuses, performance incentives, pension or education contributions, service recognition awards, regular feedback, training and prize draws are among the favourites used by her clients.
You hear more and more that these are small programs, but they do work well because they give recognition to the staff for a job well done," Robson says. "That's important.
Nielsen struggles alongside other entrepreneurs like his neighbourhood restaurant, whose owners must work seven days a week because nobody will work for the wages they can afford to pay.
Nielsen was lucky in the sense that he had a strong mentor -- an engineer in the oilpatch used to dealing with multi-million dollar deals -- to help guide him as he started up and began encountering labour problems.
He tapped into the expertise of the non-profit group Canadian Youth Business Foundation, which helps support entrepreneurs by providing seed financing, mentorship and advisory services.
Canada's source for research, media monitoring and company information. Foundation chief executive Vivian Woytiuk says the organization is growing rapidly, with 95 site offices across Canada. Since its inception 10 years ago, it has helped more than 1,700 young entrepreneurs realize their dreams.
She says Alberta's good economic fortune definitely has a downside for the economy beside the labour shortage.
"When you have areas of high employment like Alberta, you find that entrepreneurship starts to drop off because people can, quite frankly, get jobs," says Woytiuk.
"That's great for the short term, but not in the long term because when that cycle goes down, all of a sudden you've got all these folks scrambling because the employment goes away," she says. Every start-up the foundation helps get on their way produces five jobs within two years, according to her data. When people choose to work for a large corporation instead of following their dreams, the result is fewer jobs in small business. "That is a real loss for Alberta and for Canada because there are great minds out there," Woytiuk says.
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