Wages In Alberta – Increasing Pay For Short Term Gain

Date PublishedMarch 27, 2014
CompanyPlains Fabrication
Article AuthorTom McCaffery
Article TypeMarch 2014 Issue
CategoryArticles, Oil & Gas
Tags, , , , , , ,
HUB SEARCHPlainsFabrication
PULSE Interactive

Wages In Alberta – Increasing Pay For Short Term Gain

In Alberta, when things heat up, there are some companies that automatically go out into the talent pool and start splashing more and more money out on wages.

plains-logoIn the past few months, the industry has been a little soft overall. There are lots of projects being bid on, but the work has been slow to trickle in. Overall, we would say we have been steady but far from busy. That is expected, as it is generally the way the industry runs. It actually ebbs and flows more than it should in my opinion. I would say it is in the vendor’s best interest to make sure they don’t overload the industry to ramp things up on a project, because it requires us all to incur costs that must be passed on to them.

When things get slow, we employ a different approach. We try desperately not to layoff, because in our opinion, it is very shortsighted. However, by not laying off, it causes issues, because we are paying for people who aren’t producing value in the traditional way. But, we also know the value of a great employee, so to us, it is the most important cost of doing business. When we are slow, our people focus on using continuous improvement tools, so when production ramps up, our company is fully prepared.


Other companies may look to layoff employees and rehire when the work returns. This is also a typical business strategy, and it has its own benefits and downsides as well. My point is when things get busy, regardless of what strategy a business employs, we all need people, and we all go out into the same talent pool seeking the best individuals we can find.

At Plains, we employ our own ethical standards, we pay a fair wage, we have excellent benefits, and we have an advanced policy when it comes to keeping people employed through the ups and downs in the market. Our people respect what we offer, and because of that, we have very long-term employees, which is another way in which Plains Fabrication is a leader in Alberta manufacturing.

So, if we all go looking for the same talent from the same pool, then all should be fair and equal right? Well we all know this is not really the way things always work. In Alberta, when things heat up, there are some companies that automatically go out into the talent pool and start splashing more and more money out on wages. Every industry has a range of wages for the same type of work, and there are a variety of wages available depending on the company you choose to work for. I also realize “wage” is a touchy subject. I am an employee too, and in a free market, we as individuals are selling our services just like any business does, so we should be able to get as much value for those services as possible, and I totally agree with that. If a company is willing to pay, then the market can obviously bare what that company is offering, right? The short answer to that is no. Companies are paying for warm body’s not high producing employees, and no the market can’t bare it, at least not on a long-term basis anyway.

I understand free market principles, and I do not disagree with an employee accepting an inflated wage, but I do take issue with companies offering it, because I think it is shortsighted.

Payment day

So, with that in mind, what I am about to say is purely from a business perspective. This is my opinion, and it may not be a popular one, but I feel it is a valid one. When things heat up in Alberta, and companies seek to steal employees, think solely of themselves, and increase average wages by several percentage points beyond what is reasonable, it damages Alberta’s economy.

Again, I understand free market principles, and I do not disagree with an employee accepting an inflated wage, but I do take issue with companies offering it, because I think it is shortsighted. I think the employee is shortsighted as well, because when our industry ebbs, which it inevitably will, you should think to yourself that you will be one of the first people to go.

Recently, we have seen companies increase the average wage by over six dollars an hour, and we have all just come through a very slow period. To make matters worse, the increase appears to be for individuals who are really not fully qualified to even do the work. They may have the basic skills, but these are not fully trained fully functional people. They are not the highly trained or highly skilled employees you can expect to see large production out of based on experience. These are people who need training and time to become productive. These companies may be fully aware of this, and they may be prepared for it, but in our experience, that usually isn’t the case. I am not proposing we live in a socialist society.

I just think Alberta companies have recognized some weaknesses in our overall approach, and we need to seek new methods. It seems to me some competitors aren’t learning from past mistakes and are prone to repeat them. It seems to me our industry overall is geared in a way that will perpetuate our problems.

People should be paid fairly, they should be given great benefits, they deserve paid time off, and they should be treated with great respect and appreciation. I could go on and on about how much I respect the people that work for Plains, but if I, as a General Manager, decide to circumvent the market with short-term unsustainable wages, then the long-term Alberta Advantage is going to disappear.

A Call to Arms… A Vision for a Stronger Canadian Manufacturing Industry

Tom McCaffery
General Manager






Originally published in the 

March 2014 Issue of Oilfield PULSE