September 2009 newsletter

Last week I had the opportunity to attend the Houston Chapter of the Society of Maintenance & Reliability Professionals' Maintenance & Reliability Symposium (MaRS 2009) held in Galveston TX. The theme of the symposium was "Productivity Improvement: The Road to Recovery." I renewed many industry acquaintances, met lots more great folks, and attended some of the sessions. While the majority of the sessions dealt with technical maintenance and reliability plant issues, one session was of particular interest to me. It was a panel discussion entitled "Manpower Update: The Economy, Pending Projects and the Labor Supply". The four members of the panel were representatives from chemical, petrochemical, and industrial service companies and represented both the local/regional market as well as the global market. There were many interesting take-aways from this session and I thought I'd share just a few of them with you. I was excited about what I heard and I think you will be too!

The overwhelming consensus of the panel was that we're reaching the end of the downturn and there is a definite indication that the momentum is swinging upward toward significant business recovery by mid 2010. Here are just a few of the bullet points of the expected impact in hiring trends:

• Projects and turnarounds have been delayed or postponed over the last year, but are expected to be back on the schedule in large numbers for next year.
  During this down cycle, new grad hiring wasn't common and so training for the future was compromised, resulting in the potential loss of some core competencies.
  
• Many contract employees were cut due to budget constraints despite the fact that they were highly skilled employees, resulting in a loss of sorely needed expertise. The upcoming trend may be to hire more former contractors as direct-hire employees so as not to lose their technical expertise in the next recession.
  Companies will work harder to improve efficiencies across their organization (i.e. sharing resources and sharing workforce).
  
• Due to an anticipated "huge labor shortage" projected in the next two to three years, there will be a greater emphasis on workforce development for the future.
  
• One of the most important performance measurements for the next year will be the ability to retain key personnel to ensure success in operational areas. This will include negotiating longer-term contractors to ensure having higher quality people for future technical needs.
  
• There will be an increased push for more OSHA Star Safety performance and much more PSM effort in the coming few years.
  
• Companies must ensure better communication and working relationships across their organizations to help improve safety and productivity, and to make work flow processes more efficient.
  
• The following strategies will be recommended to combat the BIG labor shortage as the market rebounds and the workforce constricts:
  • Bigger budgets for labor costs.
  • Need to hire both permanent and contract workforce.
  • Ensure that you have enough staff so that the way in which you operate your business is not compromised.
  • Build relationships with your employees and contracts to encourage them to think about "long-term".
  • Re-examine your benefit programs and your salary structure to be sure you stay competitive and don't price yourself out of future markets.
  • Push internship opportunities down to the High School level.