As oilpatch bleeds jobs, Alberta’s high tech sector finds itself in need of workers
Calgary – When Jeff Forsyth was laid off by Cenovus Energy during a company-wide downsizing last fall, he had an advantage over the hundreds of fellow employees who also found themselves out of work.
His experience with a successful oilfield technology startup, along with expertise in chemistry and project management he honed at Cenovus, helped him land a new job as CEO of nFluids Inc., a five-person research firm developing new industrial products based on nanoparticle technology.
“Essentially, I’ve been on that bridge between R&D (research and development) and product development/commercialization for quite a while, so I’m very familiar with both sides of the coin,” said Forsyth, 49.
Forsyth’s story is one of rare success. While it may seem logical that the thousands of Albertans who have lost jobs over the past two years would simply find work in the thriving high-tech sector, that’s not the case. Though often well-educated as engineers and geologists, their skills don’t match what is needed, observers say.
Investor David Edmonds, who has been working with technology start-ups in Calgary for about 30 years, helped create nFluids and has been raising money to commercialize it. The company has signed a licensing agreement with an international chemical manufacturer to market its first product, an enhanced drilling fluid additive, but it is also looking at applications ranging from pharmaceuticals to cement and lubricants, said Edmonds, 61.
“I’d been searching for a CEO to replace myself for about 18 months,” he said.
“Because of the downturn, I got probably one of the top guys in Alberta to now run that company. Three years ago, there wouldn’t have been a hope that I could have got Jeff.”
Edmonds said the province’s biggest technology labour need now is software developers and programmers, and the oil industry doesn’t employ many of those.
One of the fastest growing technology firms in Calgary is Benevity Inc., a company whose software helps clients around the world, including Google and Coca-Cola, match and encourage employee charitable giving.
Founder and CEO Bryan de Lottinville said the seven-year-old company has been doubling in size every year and has grown to about 265 employees. He has openings for 55 more staff but said he can’t find suitable people, despite industry estimates that 44,000 direct jobs have been lost in the energy industry since oil prices began sliding in 2014.
“A lot of our open positions are more technical in nature – software developers and quality assurance people,” de Lottinville said.
“When technical people work in the oil and gas sector, they tend not to be as useful to pure software companies because they are doing esoteric things,” he continued, suggesting they often work on dated software.
That said, de Lottinville said Benevity has benefited financially from the slowdown in the oilpatch. Some of the office space the company is leasing at its current location is being sublet by a previous tenant for just $5 per square foot, less than one-quarter of the original lease rate.
One of the biggest indirect benefits is the value of the Canadian dollar, he said, which has fallen with the price of oil.
“Most technology companies and ours specifically have an international market, which means the denigration of the dollar has helped us,” he said. “The majority of our revenues are in U.S. dollars and the majority of our expenses are in Canadian.”
According to Statistics Canada’s June labour survey, Alberta gained 10,000 jobs in professional, scientific and technical services compared with June 2015. Over that same time span, it lost 30,000 jobs in forestry, fishing, mining, quarrying and oil and gas.
In a forecast published last year, the Ottawa-based Information and Communications Technology Council estimated Alberta would need to add at least 17,000 information technology workers to its then total of about 75,000 by 2019, with the biggest need for information systems analysts and software engineers. Report author Sharif Faisal said in a recent email he thinks the forecast is still accurate.
At Innovate Calgary, the technology transfer and business incubation centre for the University of Calgary, president Peter Garrett said his client list has grown from under 100 to about 600 entrepreneurs over the past five years.
“I’m sure a portion of that is driven by the downturn in the oil and gas industry,” he said.
“I think a greater portion is with students graduating from the university who are unable to find high-paying jobs downtown, so they’re turning to entrepreneurship, probably more so than people who were employed downtown who are now pounding the pavement.”
Forsyth came to Calgary from the United Kingdom in 2008 to join a heavy oil technology company called Oilflow Solutions that was later sold to Secure Energy Services. He was recruited by Cenovus in 2013 to run its geochemistry centre of excellence, which was assigned the task of solving oil and gas drilling problems with research both in the lab and in the field.
He said not many of the people who lost their jobs at the same time he did have found other work.
Specialization in the oil and gas industry means many are “pigeonholed,” he said, pointing out it’s very difficult for a reservoir engineer, for instance, to find suitable work in a different field.