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At Calgary's oil HQs, hot labour market propels a benefits bonanza

Employees of BP Canada do yoga in their studio at their headquarters in downtown Calgary on Nov. 5, 2012.

Todd Korol/The Globe and Mail

They aren't yet giving out free hot meals or installing Ping-Pong tables in the hallways.

But across Calgary, companies are experimenting with a raft of new employee perks and benefits as the oil patch battles a skilled-worker crunch that is beginning to inject a Silicon Valley flourish into its office amenities.

Some companies have installed latte machines and meditation centres, and even offer free flights on corporate jets when available. One company has launched a defined benefits pension, reviving the kind of iron-clad retirement package much of the corporate world has abandoned.

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Amid a shortage of skilled workers and intense competition for talent, oil sands companies are coming up with innovative ways to hire workers and keep them happy on the job. Already they have spent heavily to add luxurious touches at remote oil sands work sites in northeastern Alberta, such as fitness instructors, individual rooms with gas fireplaces, delicious cuisine and new sports facilities.

Now companies are turning their attention to more urban workplaces: Calgary's downtown office towers.

The battle for head office workers in the oil patch is intensifying even as several energy companies pull back on some growth projects to conserve capital. The trend reflects Alberta's tight labour market. At 4.5 per cent, Alberta sports the country's lowest unemployment rate. Calgary on its own generated 16 per cent of Canada's jobs last year, and Edmonton and Calgary are expected to lead major Canadian cities in terms of economic growth this year, according to the Conference Board.

Under a program rolled out this year by BP PLC, employees received raises, free iPads and access to a system that allows them to gather points to spend on better medical benefits, time off or items such as kayaks and canoes. BP unveiled its broad effort to motivate and remunerate its workforce as it attempts to turn the corner on years of backing away from the Canadian market.

"We wanted to be distinctive," BP vice-president of human resources Doug Dickson said of the plan, which offers a pool of flexible points that can be applied toward improved dental benefits or a personal trainer. It then layers on a wellness package that allows employees to add up to $3,000 worth of points a year by doing things such as getting a medical checkup to wearing a pedometer to installing winter tires.

"We wanted to demonstrate to our staff we're building a bright future," Mr. Dickson said.

Cenovus Energy Inc. recently rolled out a defined-benefits pension plan for experienced workers – a step against a near-uniform corporate shift to defined-contribution plans.

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"It's quite the talk of the pension world," said Catherine Widdoes, director of Cenovus's human resources operations. "There's going to be a shortage of labour, and we wanted to try to hold our workers."

With a defined-benefit plan that adds 2 per cent of guaranteed pension salary for every year of work for those with a certain age and experience level, Cenovus hopes it can prevent 55-year-olds from retiring – perhaps keeping them until they are 60.

"That's five more years of service of our folks that are extremely knowledgeable and valuable to the industry," she said.

Across the corporate world, companies are also fighting to boost "employee engagement," a measure of worker contentment.

One of the best ways to better engagement is to get rid of bad bosses, and help workers plan their careers. In that sense, Calgary is behind: Other sectors, such as banking and pharmaceuticals, have led the charge. But it's coming to the oil patch, too.

"A lot of the big players here are really investing a lot of money in things like developing their people, developing their careers, developing their managers," said Nick Bishop, a senior reward consultant with Hay Group in Calgary.

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In Calgary, where the talent wars have already inflated salaries, those moves may be one of the few options left. Hay statistics show that the oil and gas sector pays 15 per cent more than the Canadian industrial average for people doing the same type of work, and the sector will increase salaries by an estimated 3.9 per cent next year, ahead of the 2.9 per cent average.

But simply trying to lure workers with more money can be dangerous, said Van Zorbas, a Deloitte & Touche partner who heads human capital work in Calgary. He recently spoke with a colleague who told him that in Australia, with a red-hot mining sector, "people who hold stop-and-go signs at construction sites are getting paid $75,000 a year," he said. "So that's the risk. The risk is we get to such a cost escalation, because we're battling for our talent on wages, that projects to be built get stopped."

Benefits can be a cheaper way to keep people happy, and companies are trying creative strategies. In Calgary, Royal Dutch Shell PLC offers a fitness facility with towel service and a meditation and reflection centre. Non-executive staff can fly on the corporate jet, if it happens to be in town with a free seat. Suncor Energy Inc. offers scholarships for children of employees, in-house daycare – for a fee – and financial assistance to places where its people volunteer.

At BP, the benefit bonanza wasn't free. The company is paying more – it won't say how much – and has increased salaries even as it hires more people as part of the larger corporate return to the oil sands. But it has also worked to offer more choice. Employees get access to online mental health screening tools, for example. They get also annual financing toward green home investments, such as energy-efficient fridges and LED lighting. Everyone gets a free iPad.

"I really believe they've set the bar for plan sponsors in Canada with this new wellness program," said Dawn Noordam, senior health and group benefits consultant with Towers Watson, which helped BP assemble its program. "I know what's out there and how special this one is."

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