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Growth The foreign worker dilemma: Band-Aid solution or long-term investment?

In an increasingly competitive industry, how does a kitchen cabinet manufacturing company increase and diversify its employee base, meet rising customer demand and balance the requirements of the old and new Canadian foreign worker program?

THE CHALLENGE

For nearly two decades, Woodcraft Kitchen Cabinets has been building and installing high-end kitchen and bathroom cabinets. The Calgary-based company, prides itself on delivering quality craftsmanship, with customer engagement being an integral part of their success.

A stable workforce is important, particularly during periods of high demand. But a staff that reflects the population is also important to the company, which is why 10 per cent of its 50-person workforce are foreign workers from Europe, South Asia and Africa.

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"We have had dozens of Canadians apply, go through interviews and offers with us. We train them, further their education in the industry and offer them competitive industry wages," says founder Rana Ullah. "But find we have had minimal impact due to a rise in the supply of jobs available in this market segment. They leave as quickly as they arrive."

In an increasingly competitive industry, how does a kitchen cabinet manufacturing company increase and diversify its employee base, meet rising customer demand and balance the requirements of the old and new Canadian foreign worker program?

THE BACKGROUND

With its modern, 45,000-square-foot production and manufacturing facility, Woodcraft has been serving Calgary and area home builders and homeowners with quality crafted kitchen cabinet products. With a combined industry experience stretching 75 years, the management team of Nizar Sunderji, Rana Ullah and Idrees Ahmed have focused on maintaining value through cost-efficient manufacturing processes. Maintaining a steady, stable work-force to meet consistent growth has always been a key quality of the management to stay ahead of the curve.

Given staffing challenges, Woodcraft embarked on the government's Temporary Foreign Worker Program (TFWP), which, between 2006 and 2014, has brought more than 500,000 workers into Canada. The Woodcraft team had several great experiences including gaining work permits and labour market impact assessments relatively quickly with low processing fees. The workers displayed solid work ethic, were committed to learning their roles, the English language and were consistently present and dedicated to becoming part of the company and community at large.

The TFWP program helped Woodcraft achieve its goal of creating a diverse employee base, but it also helped them increase productivity levels and meet rising demands in the market.

But it seemed all too good to be true. Random employer audits started to take place and the TFWP rules changed. On April 1, foreign workers who were in Canada for at least four years had to leave, and a mass exodus took place.

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THE SOLUTION

Ensuring that all stakeholders and staff were on board, and understanding that it would take two to three months for a foreign worker to become acclimatized, Woodcraft decided to work with the office of the TFWP to clear any inconsistencies in reporting while continuing to apply for more temporary foreign workers.

Although there was more paperwork and a steep learning curve, the management team knew the effort was worth it.

As Woodcraft embarked on hiring temporary foreign workers, there were a number of hurdles. They needed a labour market impact assessment, which confirms that an employer has tried but was unable to find a Canadian citizen to fill the position. After the assessment, the temporary worker then needs to apply for a work permit. Woodcraft was then responsible for arranging the worker's compensation benefits, medical coverage and verifying that the employee has a social insurance number.

Most temporary foreign workers are limited to working in Canada for two years before returning to their home country. Although Woodcraft desires a longer time frame, the two-year window provides stability in the work force in this high-turnover industry. Most temporary foreign workers have the opportunity to apply for permanent residence, limiting the amount of time they work in Canada with a temporary status.

THE RESULT

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In order to compete in the world of high-quality cabinet manufacturing, Woodcraft had to keep pace with the TFWP's changing winds.

There are additional costs associated with hiring temporary foreign workers, such as paying for private health insurance until they are eligible for provincial health coverage, ensuring affordable housing is available, registering them with the workplace safety board, there is more audit compliance and list goes on. However, the benefits of committed workers for an extended period of time, reduction in turnover, the creation of spin-off jobs and the strong foreign work ethic makes the process worthwhile.

As a result of their experiences, Woodcraft managers have additional checks and balances for best practices in the field of corporate immigration policy. This includes creating guidelines, training programs, verifying government documentation, responding to inspection reviews and creating strong needs requirements for justifying a temporary foreign worker.

The priority is to hire skilled, contract or full-time Canadian citizens in the local area. However, in order to meet the needs of their customer base and product demand as well as reduce turnover in staffing, Woodcraft requires temporary foreign workers to remain diversified and competitive in the evolving landscape.

For Woodcraft Kitchen Cabinets, this is not a Band-Aid solution, but rather an investment in their future.

Sharaz Khan is an Instructor of Business Technologies at the Haskayne School of Business.

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This is the latest in a regular series of case studies by a rotating group of business professors from across the country. They now appear every Tuesday on the Report on Small Business website.

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