Fleet Ops: Human Resources
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As the World Churns

Go Forth and Multiply. It must have been quite the order to hear for Adam and the 'ol lady, who probably didn't have much else to do in, say, 1 gazillion BC. One wonders what the response would be from Canadians these days if such a call came down from the clouds. Judging from our present birth rate of 1.5 babies per man and woman, it seems that being fruitful might take a lot more motivation.

Canada is getting older -- and fast. The country's birth rate fell to its lowest level since 1921 a couple of years ago, and declined by more than a quarter between 1992 and 2002.

But when it comes to dwindling demographics, we're not alone among westernized nations; and we're far from the worst. More than a handful of EU countries have birth rates between 1.1 and 1.3 babies-per-couple --almost half of the required 2.3 births considered by demographers as "replenishment rate" for a functioning society.

In other words, there are dozens of nations that are cutting each successive generation anywhere from 25 to 50 percent of the required proportion. (At 2.1, the U.S. is the only G8 nation hovering at replacement rate).

While there's been much ink spilled on the demographic question, much of the mainstream media has sidestepped the root causes: Dependency on more effective birth control; career women entering the workforce and delaying, or opting out of, child-rearing; and skyrocketing divorce rates over the last 50 years are some of the explanations of "progressive" nations birth rates in reverse.

As the Canadian family rapidly shrinks, so does our national labor force. The long-term implications, therefore, are disconcerting for the country's culture and economic sustainability.

"The demographic picture is bleak. No doubt about it," says Dr. David Foot, expert demographer and economic professor at the University of Toronto. "Twenty years from now there will be a shortage in a lot of occupations because we haven't recruited into those occupations and we have a dearth of people under 35 years old."

Trucking, which is not regarded as a first-choice career path for the eroding number of young people, is sure to experience the worst of the impending labor crunch, says Canadian Trucking Alliance (CTA) CEO David Bradley.

"There are other industries having issues as well, but I don't know of any that have a bigger challenge than the trucking industry," he says. "If you think we have a shortage now, it's a tea party compared to what we'll see 20 years from now. The trend lines are abundantly clear for anyone who wants to see them."

While there's been much debate over the accuracy of its projections, the Canadian Trucking Human Resources Council (CTHRC) estimates that hundreds of thousands of drivers will be needed in Canada over the next 10 years.

Until recently, almost as many drivers were entering the industry as leaving it, keeping driver demand and supply averages more or less in balance.

But with the baby boomers slated to retire or switch to more age-sensitive careers in the next 15 years, and precious few young people left to take over, there's little doubt the influx of new truckers will dry up faster than a U.S. border guard will confiscate your roast beef sandwich.

As New Brunswick-based Warren Transport President Vaughn Sturgeon says: "After the boomers are gone, they're gone."

As detailed in the first part of this series ("Slow Workers Ahead," July/Aug., 2007 -- story link below), it would make sense for the trucking industry in the near-term to take advantage of the demographically top-heavy 50-plus generation by getting creative with pay packages; accommodating lifestyle changes with more "hub-and-spoke" and relay operations; and aggressively marketing the job to people recently retired from other industries.

There are those, however, who argue that trucking continues to ignore a number of untapped resources.

Fleets like Reimer Express, Trimac, and Yanke Transport have experimented with recruiting native drivers -- with limited results. On the surface, more aboriginals as truck drivers seems logical since they're one of the few demographic groups growing in Canada. Plus, there are cross-border advantages, as they are not subjected to U.S. cabatoge rules.

But as Yanke Group of Companies President Scott Johnston points out, native leaders aren't interested in exporting labor outside of reserves.
Then there's the women. But while it's true there has been an increased presence of women in the industry over the last 15 years, don't kid yourself into believing that anything other than a small minority will ever be interested in hauling freight for a living -- no matter how many auto transmissions carriers spec.

Like it or not, the only sustainable long-term solution to our driver shortage woes is immigration -- even if the industry immediately figures out how to better accommodate the current pool of young prospects and veteran drivers.

A handful of Canadian carriers (mostly those in overheated western markets) have begun building pipelines across the pond and are actively recruiting professional European truckers.

Denis Prudhomme, of 100-truck beverage hauler Prudhomme Trucks in Regina, has been flying oversees in search of European workers for his own fleet and on behalf of the Saskatchewan Construction Association. Prudhomme, who's establishing a company to scout foreign drivers for other small businesses, says if it weren't for his immigrant workforce, he'd have cut his fleet in half by now.

"Everybody seems to be in a state of paralysis. There's guys sitting around complaining they have no workers. But we're doing something about it," he says.

Until now, the U.K. has been a decent source of offshore labor, especially for cross-border operations. Yanke's Scott Johnston, whose company arguably runs the most extensive foreign-recruiting strategy among Canadian fleets, has been bringing British and Scottish truckers to the Dominion for years. "From our perspective, given that 49 percent of revenues are generated from the U.S., we needed to make certain whoever we brought into Canada would qualify for the [U.S.] Visa Waiver Program," he says.

The retention rate for U.K. drivers has been about 70 percent for Yanke and about 60 percent for Prudhomme. Some of the rest go back to England or follow Canadian truckers to higher-paying jobs in oil-rich Alberta.

More recently, both carriers have been successful at recruiting and retaining drivers from Ukraine, where the unofficial unemployment rate is 40 percent.

"Their work ethic is phenomenal; they're highly skilled and used to driving similar equipment," says Prudhomme. "From my point of view, the British culture and Canadian culture have one thing in common -- the language. The Ukrainian culture and the Canadian culture have one difference -- the language."

Seconding the Nomination:

Immigrants have almost exclusively made up Canada's total labor-force growth over the last couple of decades. But without a comprehensive national immigration policy, the benefits to many businesses have been modest at best.

Immigration Canada only hands out workers' permits to foreigners the government has deemed "highly skilled" and "in short supply." It's been tough to convince Ottawa bureaucrats the first criteria applies to truckers while nation-wide, there isn't enough freight being left on docks to prove the latter.

So far, fleets like Yanke have imported offshore drivers through various provincial nominee programs (PNPs). In conjunction with Human Resources and Skills Development Canada, long-haul drivers are allowed in on a temporary work status.

Alberta, Saskatchewan, Manitoba and the Atlantic provinces have PNPs for long haul drivers. In B.C., officials recently told the B.C. Trucking Association (BCTA) that professional drivers on a "critical shortage" list could be accepted soon. Ontario announced a pilot PNP earlier this year that doesn't include truck drivers, but OTA's Bradley suggests truckers could be part of the program when it's made official.

The details vary in each jurisdiction, but mostly employers make job offers and then the operators, while on a temporary work Visa, are subsequently nominated for landed immigrant status. In some provinces, the worker can apply to the federal government for permanent residency while they're here.
That's not so easy in Alberta however, where the worker has to head home after a year.

It's no surprise that in an industry with long-held traditions like trucking, there are more than a few folks not sold on immigration. Call them cynics (others would in fact call them optimists), but they argue that some fleets wouldn't have to venture across an ocean for help if they upped the ante for domestic drivers at home.

But considering all the costs -- both capital and ancillary -- and the risks associated with offshore recruiting, it's hard to believe anyone would play this game if they weren't truly convinced they're approaching a dead end in securing long-term manpower.

Yanke's Scott Johnston guesses the up-front costs to bring just one driver to Canada totals well into five figures.

First there are international advertising expenses. Then the travel costs of flying overseas and conducting information seminars and personal interviews with select applicants. At that point, Yanke shows a three-hour presentation detailing the company's operations and life of a long-haul driver in North America.

Back in Canada, a chosen driver is put through an orientation workshop and after passing the ministry road test, is retrained in-fleet with an on-road mentor. At the same time, the carrier is responsible for getting the driver his SIN, health card, and DOT medical certification, among other documents.

None of that includes the morally and economically responsible investment a fleet has to make to help settle and assimilate the driver and his family within the larger community.

"That's the most critical aspect when we're doing interviews. We have to establish how optimistic the individual is; how pioneering he is. If there's any uncertainty at all, it won't work," says Johnston. "It takes a certain personality to accept change. Those who recognize this is a new page and accept a new way of life have been extremely successful."

For those reasons, adds Prudhomme, a fleet with the wits to give offshore recruiting a shot would do well to try and place foreign drivers in an identifiable community -- Ukrainians in Regina or Germans in Kitchener, Ont., for example.

"It's just like a merger or acquisition between companies where the most important thing is the alignment of company culture," he says. "I think it's the same when you're recruiting abroad. You have to get the ­people that will fit in the larger culture."

For now, however, that makes recruiting foreign drivers difficult for cities not named Toronto, Montreal, Vancouver or Calgary. As Vaughn Sturgeon attests: "There's no doubt that immigration will be looked upon as one of the long-term solutions. The problem for Atlantic Canada, however, is that once they're here, they're easily lured to big cities [to the west]."

The Future Belongs to the Young...

As mentioned, most countries on the Continent are facing their own birth dearth: France (1.8 kids per couple); Holland (1.7); Germany (1.3); and astoundingly, Italy and Spain (1.2 and 1.1 respectively). In the U.K., where Canadian fleets have traditionally plucked drivers, the rate is 1.6, suggesting the preferred fishing holes are drying up as quickly as Canada's.

Eastern Europe's extraordinarily high unemployment rate will continue to push drivers here in the medium-term, but birth rates (Russia 1.3) and low life expectancy for males in that part of the world suggests businesses need to begin examining the demographic and economic trends beyond those borders.

"Twenty years from now, the U.K. and much of Europe won't be able to be the release valve of human resources some companies are currently tapping into," says Dr. Foot, who also authored the popular book on demographics Boom, Bust & Echo. "The traditional sources are not likely to produce substantial results when your kids are running the business."

So where to? Examining the global demographic outlook, there are several nations -- mostly in the third world -- with more young people than old. China, surprisingly isn't one of them, thanks in part to a medieval-like, one-child policy.

Much of the Arab world is spilling over with young people; but geopolitical issues and the fact many of those countries are excluded from the U.S. Waiver Program list, don't make such drivers a logical option for a lot of Canadian carriers.

Dr. Foot instead points to Mexico, South America -- namely Brazil --Malaysia, and India, as a few potential labor pools for the next generation of fleet owners.

Prudhomme insists he'll be ready to react when the time comes. "Right now we're in the Ukraine. If that dries up or changes, we'll have to have the systems in place so that we can adjust and go where the resources are. It's that simple."

Although most progressive fleets in Canada are only interested in targeting professional and skilled truck drivers from abroad, some in the industry wonder if general migration from third-world countries could usher untrained workers into the trucks of less scrupulous fleets.

Like the cab industry, trucking is a relatively easy profession to get into for people who can't find work in other fields, and as a result of the inflated capacity the industry could potentially see a return to the price wars that plagued it for 15 years.

When there's a downward push on rates, winners and losers are sometimes separated by mere pennies per mile. In order to avoid such a widespread scenario, the OTA's Bradley says Ottawa must establish a national immigration policy for trucking so that fleets who need professional drivers in the future can get them without flooding the market with cheap labor.

"While there may be a risk of that in certain markets, I generally don't buy that we'll end up with a glut of unskilled drivers, [provided] there are safeguards in place to prevent people from being sold a pig in a poke to come here and work for slave wages. Most carriers I work with use immigration to bring in skilled, experienced people to step in and do the job right away."

Commensurate with immigration over the next 20 years "will have to be a revolution in investment in driver training," adds Bradley. "Not only for attracting young people or career changers that are resident Canadians, but because of the numbers game and the [need] for immigrants, we're going to have to train these people to our standards as well."

Joanne Ritchie, executive director of the Owner-Operators' Business Association of Canada (OBAC) is less worried about immigrants coming to Canada to cut rates, as she is about potential rate-cutters stepping in to fill the seats of qualified drivers who leave the job because the industry continues to be heavy on recruiting, but light on retention.

"If you bring in a whole bunch of drivers and business-savvy owner-operators to market, no matter where they're from, it won't make a difference unless you have a receptive carrier, and in turn, a shipper community," she explains. "By simply bringing in more qualified truck drivers, we're not going to retain them unless we're making the job more attractive as a career path, and not just a way to get into the country."

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