Rick Gibbs, right, owner and president of Neutron Factory Works, must compete with Alberta’s oil patch to hang on to his crew of electricians, millwrights and programmers. Pictured with him are Eric Hasselmann, left, owner of Century Pacific Foundry, and melting supervisor Harjinder Atwal, in Surrey, B.C.Ben Nelms/The Globe and Mail
Each week, we seek expert advice to help a small or medium-sized business overcome a key issue.
In a high-tech world where a factory shutdown can cost up to $5,000 a minute, Rick Gibbs and his staff of technicians at Neutron Factory Works Inc. keep B.C. manufacturers running.
Last year, his crew went to work relocating the Grimm's Fine Foods meat products plant from Richmond to the Freybe Gourmet Foods Ltd. facility in Fort Langley. Mr. Gibbs' company, which is based in Delta, B.C., supplied electricians, millwrights, refrigeration mechanics and programmers for the six-week project, which didn't disrupt Freybe's production.
Neutron also recently combined three Masonite International Corp. door-making facilities in B.C.'s Lower Mainland into a single plant. Masonite calls on the company's experts around the clock.
"In the manufacturing sector, a lot of our customers can lose up to $5,000 a minute when they go down," says Mr. Gibbs, who is owner and president of Neutron. "It's about, 'When can you get here, and when can you fix it?'" Neutron posted a record $4.6-million in sales for 2013; this year, it's on track to top $6-million.
But Mr. Gibbs worries about finding and retaining the technical labour he needs to keep pace with this growth. Like other small companies in the Lower Mainland manufacturing sector, 35-employee Neutron vies for talent with Alberta oil sands hub Fort McMurray and big local employers such as the northern natural-gas industry.
For technicians, the high-paying oil patch is a powerful draw. Between 2006 and 2011, 215,850 people moved to Alberta from other parts of the country, according to the province's Office of Statistics and Information. B.C. was the No. 2 source of interprovincial migrants, contributing 57,375.
The problem became clear to Mr. Gibbs this past winter, when Neutron became a top-five finalist for best employer at the Small Business BC Awards. "Even then, I lost a couple of people," he recalls.
Mr. Gibbs thinks 15-year-old Neutron is doing everything right. "We are a very, very safe organization," he says. The company pays well, funds education and in-house training, and gives back to the community, he adds.
But Neutron can't compete with oil-patch wages.
"I don't blame the guys," Mr. Gibbs says. "You can make 45 bucks an hour here, which is a very, very good wage in the Lower Mainland for a tradesperson, or you can make $75 an hour up in Fort Mac. And it's typically the younger guys that we're losing."
The Challenge: How can Neutron Factory Works attract and keep skilled technicians?
THE EXPERTS WEIGH IN
Henry Goldbeck, president, Goldbeck Recuiting Inc., Vancouver
If you increase somebody's salary or wage by $5 an hour, they can still leave at any time if they get a higher offer. But if you had a retention bonus that paid out every 18 months or every two years, you could lock people in. People don't like to leave bonuses on the table.
Neutron could also consider an employee referral bonus for staff and even ex-employees who refer new employees to Neutron. I would do something like a $1,000 bonus when a referred new employee begins and another $2,000 if they are still there after a year. I would make sure to include ex-employees because those who move to Alberta may be working with tradespeople who want to move to or back to B.C.
You have to make the pipeline bigger, knowing that you're going to lose a certain amount of these people. It might be easier if you're investing ahead of time and planning – doubling the need in your mind – so you will have sufficient coverage when it comes down to it.
So many people from the Maritimes move to Alberta. We don't see that many here. A lot of times they move to Alberta, and their home is in the Maritimes and they're moving just for the money. You're not going to able to compete with that from a money point of view.
But they could go to the technical schools in the Maritimes or maybe Quebec or Ontario and really sell those apprentices coming out of school on starting in B.C. as an attractive place. The income isn't as great, but tell them they could make their home here as opposed to just move for a temporary job with your home someplace else.
I would find recruiters across the country who specialize in tradespeople and let them know that you would pay relocation costs and that you have standing requirements.
Hein Winckler, partner, human capital practice, Ernst & Young Canada, Vancouver
There has to be a broad, long-term vision – what does this company want to do, where do they want to be in three years, five years, seven years. That vision needs to be articulated very clearly so that everyone knows where they fit in the big picture.
You're looking for engagement from your people. If they understand your company's vision and they're excited about it, then they engage and the money thing becomes a bit of a moot point.
The conversation shouldn't be about, "Okay, I'm paying you 45 bucks an hour and the other guys are paying you 80." What you want to have a conversation about is, "This is the vision, this is how we treat our people, this is where I want to take this company, and this is your role."
Part of the opportunity here is to get the younger folks to start thinking about their career earlier in life. It's a great opportunity to mould them and help them to think strategically.
Once you have your vision, you've got to get the message out. You can do it on your website; you've got to go to the schools where people are doing their certifications. But what's most helpful is the folks currently working for you talking to their friends. If you've got your people pumped up, they go and spread the word, and they're the most powerful ambassadors you can have.
Justin Williams, CEO of the manufacturing equipment and service specialist Williams and White Group of Cos., Burnaby, B.C.
If someone is heart-set on working in Fort McMurray and they've drunk the Kool-Aid – let's say they're a journeyman electrician or a welder, and they're hearing these stories of guys making over $100 grand a year, and they don't mind sacrificing their lifestyle – then trying to encourage them through lifestyle is almost impossible.
When you're saying, "Hey, we're going to give you more time off and we're going to give you a really great place to work," if someone's sole motivating factor is short-term monetary gain, is that the kind of person you're going to want on your team long-term?
If Mr. Gibbs is losing great people he already has on his team, that's a different story. He needs to understand why they're leaving. Are they really leaving for more money, or was there something else?
THREE THINGS THE COMPANY COULD DO NOW
Offer retention and referral bonuses
If you can't compete on salary, give people financial incentives to stick around and to help source talent.
Tap technical schools across the country
With help from recruiters, sell B.C. as a place where graduates can build a home and a career.
Have staff spread the word
Employees who buy into your long-term vision can bring new people onboard.
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Interviews have been edited and condensed.