CEO Blog

Category Archives: Finance & Accounting

All blog posts by Kevin Dee, Chairman at Eagle — Canada’s premier staffing agency, related to finance and accounting.

The Value in Attending Good Conferences

FEI Canada logoLast week I spent a couple of days at the annual FEI (Financial Executives International) conference in Winnipeg.  While I do not have a financial background myself, Eagle does provide our clients with finance and accounting talent, so the participants were potential clients for Eagle.

Heading to the conference I had a number of goals,

1.  Learn.  In particular what was interesting to my potential client base, understand what challenges they were facing and soak up some of the content.  (I was not disappointed)

2.  Network.  That does not mean bending people’s ears about Eagle, but rather building relationships, bringing value where I could and investing time in new people.  People were friendly and fun so this was just great.

3.  Fun.  There were some fun events, a gala evening at the Museum of Human Rights which was a spectacular venue with the added bonus of Gail Asper providing insight into the journey to get the museum built!  Good food, good wine, good company and and excellent venue … mission accomplished!

I did not have a goal to come away with new clients, or new orders.  I know that when I am attending an event and I get targeted by salespeople it makes me uncomfortable, which is not a great way to start any relationship.  I don’t think it does any supplier much good to use conferences as a “target rich hunting ground”!

I feel pretty good that I met some interesting people, exchanged cards and swapped stories with many of them.  I had fun at the gala event, enjoyed the company of some new friends and found the conference content to be excellent.

Cenovus logoThe first keynote speaker was Brian Ferguson, CEO of Cenovus Energy and a very engaging speaker.  His background is Finance so I was interested to see a former CFO make the CEO role, which I think appears to be a growing trend.  He talked about the kinds of challenges he faces, including the recent drop in oil prices that caused a 50% reduction in revenues!  Brian talked about leveraging his financial background, about having a great team and about having a passion for what you do.  He also talked about the importance of giving back … something near and dear to me too.  It was an interesting insight into the work day of  guy running a multi billion dollar corporation … and he still has his feet on the ground.  I like that!

Suncor logoThere was an interesting panel of CFOs with Don Selman (Richardsons), Janice Fukakusa (Royal Bank) and Alistair Cowan (Suncor) moderated by Bruce Waterman (a retired CFO who sits on several high profile boards).  This panel talked  lot about the role of the CFO today.  There was discussion about the differences between private companies and publicly traded companies (Richardson being a private company).  While there are some obvious differences (whose money is being spent) the structure and governance is remarkably similar.  There was talks about accessing capital, risk appetite and the impact of technology.  There was also a discussion around communication, so I was a little disappointed to find out none of the panel are active on social media!  (Room for improvement?)

I attended an interesting presentation about multi generational workplaces, with an emphasis on the millennials.  I have seen much of the content previously, but it was still an interesting session and the speaker from Morneau Shepell was very good.

There was an interesting session on social media and it was interesting to see IBM’s CFO on the panel, (good job Xerxes Cooper) when the other panelists were more technical.  The bottom line was social media is a great communication tool, internally and externally … it can be used to manage your brand (or your brand will be managed for you) and is one way to get employee engagement.

Canadian council aboriginal businessThe surprise session of the conference for me was “Doing Business with the Aboriginal Community”.  I really did not know what to expect, but the session was both interesting and thought provoking.  Aboriginal businesses will make up a large part of Canada’s GDP in the coming years!  There is an under utilised workforce waiting to be engaged and an influx of education and some investment could produce a great return … especially when you consider all of the work that gets outsourced abroad today.  I will personally be following up with Joe Dion (CEO Frog Lake Energy Resources) and JP Gladu (CEO Council of Aboriginal Businesses) both very articulate, successful representatives of a great opportunity!

I attended the obligatory Economic Outlook with economists Dawn Desjardins (Royal Bank, despite having the same name as another bank) and Todd Hirsch (Alberta Treasury Branch).  They took out their crystal balls and talked about (a) energy prices, with a focus on Alberta, (b) house prices with a focus across the country, (c) politics with a focus on Alberta and (d) inflation.  They talked about growth sectors and sectors of concern all in relation to Canada’s economic outlook.  Generally they were cautiously optimistic … that’s the shortened version!

We wrapped up the conference with a high energy motivational speaker and author of the book Nine Minutes on Monday, James Robbins.  As a big Time Management guy I’m always up for new productivity ideas and was intrigued by Jim’s ideas and thoughts … so I left with a copy of the book!

This is a long review of the conference … but my intention is to demonstrate that the right conference can bring a lot of value for a reasonable cost.  I think I ticked all the boxes and received a ton of value from this conference.  I also made some new friends … which is always valuable, whether business flows or not!

I would certainly encourage any financial executive in Canada to sign up for the Montreal conference next year.  Hope to see you there!

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Kevin Dee is CEO of Eagle (a Professional Staffing Company)
Want to know where Canada’s hot jobs are?   Visit the Eagle Job Centre!
Gain a competitive edge!  Join Eagle’s Executive Consulting Network!
Have you tried Eagle’s (very cost effective) VirtualRecruiter service?
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The Many Hats of the CFO

Jim Rohn quote on leadershipI was at the FEI (Financial Executives International) conference in Niagara Falls a few weeks ago.  There was some great content over a couple of days, but one of the best sessions was the opening keynote from Maureen Sabia who is Chairman of the Board at Canadian Tire.  She has enjoyed many years serving on public company boards, and is very clear in what she expects from a CFO.  With her experience, knowledge and confidence I was not about to argue, and she was very compelling with her views.

To many people the CFO is “the bean counter”, and there is a stereotype expectation that he/she will be a little “straight”, not necessarily a people person, a little risk averse, a little nerdy and not very social.  Many accountants will play up that stereotype, but my experience with senior financial executives and especially those at the most senior levels is that they are not at all like those stereotypes.

Here is what Maureen Sabia had to say about CFOs.

  1.  The very basic expectation of a CFO is that they know the technical aspects of their job cold.  Good with numbers, good with understanding the nuances of the numbers and able to report efficiently and accurately.
  2. There is an expectation that the CFO will offer no surprises to those who rely on her to provide information.  The board and the other company executives should have absolute trust that she will not hold back.
  3. Board members and most importantly the audit committee should expect to meet with the CFO prior to any board meeting, and should expect to hear anything they need to know before going to the board meeting (see #2).
  4. The CFO should cultivate relationships beyond her domain … with other executives, board members, industry members and peers.
  5. Maureen talked about the 4 distinct roles that the CFO will have … The Strategist, The Catalyst, The Guardian and the Operator.
  6. The Strategist.  In this role the CFO applies his financial leadership in M&A situations, capital markets, financing and in aligning the financial strategies with the business strategies.  The CFO should have an excellent understanding of the business, so much so that a previous role with business management responsibilities is extremely valuable.
  7. The Catalyst.  The CFO will share in leadership responsibilities with the CEO, ensuring the disciplined execution of the corporate strategy (together with the rest of the executive team).  The CFO will bring a rigor to the processes of the company, change management skills and a good understanding of the risks inherent in the business strategy.
  8. The Guardian.  The CFO will protect the assets of the company, bringing the right balance of risk to the growth strategy.  She will not shy away from challenging the CEO, bringing a healthy tension to the executive suite ensuring that the CEO is not surrounded by “yes men”.  The CFO must have the trust of the executive and the board, which is achieved through openness, honesty and her strategic value to the organisation.
  9. The Operator.  The CFO will bring the right talent to her team, delegate and mentor to ensure she has the time to execute on all of the expected roles.  The CFO is just expected to be extremely competent at this part of the job … the numbers need to be reported accurately, completely and efficiently.
  10. Tenure is important … when a company has a great CFO they need to hold onto them, ensuring continuity and reducing the risks inherent in turnover.

I must say that having worked with my CFO for the last 18 years, in a private enterprise, I can understand exactly what Maureen is describing.  To be able to trust absolutely, to know that the advice comes with a deep understanding of the business and to know that the technical aspects of the CFO role are “a given” is very important to any CEO.

How does your CFO stack up?  If you are a CFO are there areas that you need to work on?

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Kevin Dee is CEO of Eagle (a Professional Staffing Company)
Want to know where Canada’s hot jobs are?   Visit the Eagle Job Centre!
Gain a competitive edge!  Join Eagle’s Executive Consulting Network!
Have you tried Eagle’s (very cost effective) VirtualRecruiter service?
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CANADIAN JOB MARKET – Second Quarter 2012

General Observations:

From a job market perspective, the second quarter of 2012 here in Canada has been very consistent for some time now.  The unemployment rate in June 2012 is 7.2%, the same as it was at the end of the first quarter which was a little better than the 7.5% at the end of December 2011.  As at the mid-year point we have added 181,000 jobs over the previous 12 months.

Western Canada remains one of the markets with the biggest demand, largely driven by the oil industry.  While the price of a barrel is down from the $110+ highs, it is still a healthy $85+ per barrel.  Other factors that affect the Western Canada job market include an ongoing environmental influence that keeps some check on oil industry growth, a strong Canadian dollar that dampens demand a little, and a low price of natural gas which has restricted investment in that sector.  Should the price of gas ever take off there will be a severe shortage of talent in the resource rich regions of Western Canada!

The financial sector in Canada, headquartered mostly in Toronto with strong presence in Montreal, continues to create demand for talent. Canada’s financial institutions have fared better than most around the world and are a big driver of job growth, most particularly in the GTA.

The instability with the Euro and a dampened US economy do negatively affect Canada’s economy and hence job growth.  The TSX is a good indicator of this impact, with highs of 13,500’s and lows of 10,800s in the last 12 months.  In the second quarter of 2012 the TSX has settled in around the 11,500 mark, whereas it had been above 12,500 in mid Q1.

Federal, Provincial and Municipal government employ a lot of people in Canada and all levels of government continue to find ways to reduce spending.  This has meant fewer projects, less hiring and active layoffs, particularly at the Federal level.  This all means that the public sector has not been a place to find job growth in Canada this year.

The staffing industry is a good indicator of the job market and the second quarter continues to be reasonably positive.   The Canadian Staffing Index (which is an indicator of hours worked by temporary and contract resources) has seen fairly steady growth this year and the May index was up 26% over the same month last year.

More Specifically:

For Eagle, the GTA (Greater Toronto Area) continues to be Canada’s hottest job market, largely because it is home to the largest number of Canadian head offices.  Toronto is also the largest financial centre in Canada, and that sector is currently one of the biggest drivers of demand for talent.   The other industry sectors driving demand here include retail, insurance and the telecommunications sectors.

As previously mentioned, it is the continued strength of the oil patch that keeps Calgary as the hottest job market in Western Canada with strong demand for skilled resources at all levels and across all of Eagle’s lines of business.  Edmonton and Regina are two smaller markets that also show strong demand for talent.  All of that means Western Canada is a good place to look for work.

Eagle’s Eastern Canada region is impacted largely by the Federal Governments cutbacks and reduced demand in Ottawa, however Montreal is enjoying fairly healthy demand, particularly in the financial, insurance and telecommunications industries.  The Maritime provinces are generally tough places to find jobs, however the ship building contracts for Halifax, plus the oil off Newfoundland seem to be creating some buzz.  SW Ontario is currently struggling as RIM comes to terms with its situation through attrition.

 Summary:

The first half of 2012 continues to be a little “ho hum”, with unemployment rates in the low to mid 7% range.  The challenges facing Europe and the US continue to dampen optimism and affect investment in growth.  While those regions are making some progress, it is not enough to remove the concern about slipping back into recession and until those risks are allayed we will continue on this cautious path.

Here at Eagle we are seeing good growth in demand from our client base year over year, but as we head into the Summer months we expect to see some slow down as holidays kick in and decision makers become harder to pin down.

If I were looking for work, the cities that I would be focused on would be Toronto, Calgary, Edmonton, Montreal and Regina … the city I would be avoiding, if possible, would be Ottawa!  The industries where I would focus would be the financial sector, the oil companies, telecommunications, insurance and retail.  The sector to avoid would be the public sector … although I expect that to change next year.

In the hotter markets there are definite skills shortages and we are seeing “in demand” people receiving multiple job offers and having the ability to “pick and choose”.  So … IF you want to hire the best talent here are some things you should consider:

(a) Start the process early with a strong PLANNING phase;

(b) Develop very clean processes to find, screen, choose, hire and onboard these new resources (if you drag out the hiring process you WILL lose);

(c) Know that you will have a lot of competition and therefore speed in decision making will be critical;

(d) The job doesn’t stop there … retention becomes the next challenge!

That was my quarterly look at the Canadian job market and some of its influences.

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Kevin Dee is CEO of Eagle (a Professional Staffing Company)
Want to know where Canada’s hot jobs are?   Visit the Eagle Job Centre!

Gain a competitive edge!  Join Eagle’s Executive Consulting Network!
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CANADIAN JOB MARKET – First Quarter 2012

General Observations:

From a job market perspective, the first quarter of 2012 here in Canada has been very similar in many respects to the last quarter of 2011.  The unemployment rate has bounced around a little but today at 7.2% unemployment it is somewhat better than the 7.5% unemployment rate in December.  After a couple of months of little change we added 82,000 jobs in March which means that Canada has added 197,000 jobs in the last 12 months.

The high price per barrel of oil is the primary driver behind the “hot” job market in Calgary, yet that is somewhat dampened by the strength of the Canadian dollar which has been at or close to par with the US dollar for some time now.  The continuing extremely low prices for Natural Gas have somewhat dampened the demand for talent in Western Canada, if you can believe it.  A high gas price would result in a severe shortage of talent!

The financial sector in Canada remains strong and hence is a strong source of employment, with new projects and initiatives creating jobs that impact primarily the GTA and Montreal … and we continue to see demand in those cities. 

A stable economy is essential for business to invest in growth, and while Canada has been very stable for some time now, we are affected by global economic conditions creating a dampener on job growth here.   This can be seen in the continuing fluctuations in the stock market with the TSX bouncing between 11,500 and 12,500 for about the last nine (9) months, yet performing very slightly better this quarter than last.

The multiple levels of Government here in Canada employ a lot of people and yet most governments have been struggling to reduce deficits and contain costs, which will affect the opportunity for work in this sector.  There will always be work with these employers even as lay-offs happen, but current restraint means there is a reduced demand there. 

The staffing industry is obviously a good indicator of the job market and the first quarter of the year has been quietly positive.  The Canadian Staffing Index is up about 10% over the same period last year but down a little from a busier last quarter of 2011 … again suggesting a “3 steps forward, 2 steps back” type of recovery.  On the professional staffing front here at Eagle we have seen demand from our clients increase by about 20% in the first quarter of 2012 as compared to the last quarter of 2011.

More Specifically:

For Eagle the GTA (Greater Toronto Area) has been Canada’s hottest job market for some time now.  This is because it is Canada’s largest city, with a large number of head offices and home to the greater part of the financial sector in Canada.  The Ontario Government is still hiring, but the opportunities are definitely impacted by a need to cut back costs.  The biggest drivers for growth have been the financial, retail, insurance and telecommunication sectors.

The continued strength of the oil patch keeps Calgary as the hottest job market in Western Canada with a continued demand for skilled resources at all levels and across all of Eagle’s lines of business.  As mentioned earlier a high Natural Gas price  would create serious skills shortages in Calgary, but the demand is strong based largely on the high price per barrel of oil.  Edmonton and Regina are also enjoying strong employment, so Western Canada continues to be a busy place, and jobs are there to be had.

Eagle’s Eastern Canada region is impacted largely by the Federal Governments cutbacks and reduced demand in Ottawa.  Montreal however continues to provide job opportunities, most specifically in the financial, insurance and telecommunications industries.  The Maritime provinces are generally tough places to find jobs however the ship building contracts for Halifax and the oil off Newfoundland should create some decent demand.  In SW Ontario the Auto sector has stabilised again but RIM’s woes cast a shadow in this region.

 Summary:

The first quarter of 2012 has been “more of the same”, a slow recovery (if we can still call it that) and unemployment rates in the low to mid 7% range.  The recovery remains tentative but probably more optimistic than 2011 as the US and Europe seem to be finding their way through their significant challenges.

Anecdotally (Eagle’s experience) and from a staffing perspective, there has been increased demand for people this quarter over the same period last year.  The indicators are that the pace of demand is increasing and that the second quarter should see that trend continue.

The Canadian Federal Government, along with many other levels of government are looking at ways to cut costs and reduce deficits.  This has led to lay-offs and a reduced demand for people and thus the bigger opportunity for jobs is the private sector.

The cities with the most opportunity remain Toronto and Calgary, with Montreal still showing good signs.  Some other markets like Edmonton and Regina seem to be faring well too.  Outside of that the Maritimes will enjoy some job growth associated with the shipbuilding contracts and oil business off Newfoundland.

The hottest markets are experiencing some skills shortages for the highly skilled professionals, and we expect to see these issues worsen in Q2.  I would also expect to see increased demand for skilled trades particularly in hot areas like Toronto and the oil patch.  By necessity, hiring managers are beginning to recognise the “need for speed” in their hiring decisions.  Thus I will end this write-up with my “standing advice” to ANY company needing people:

(a) Start the process now with a strong PLANNING phase;

(b) Develop very clean processes to find, screen, choose, hire and onboard these new resources;

(c) Know that you will have a lot of competition and therefore speed in decision making will be critical;

(d) The job doesn’t stop there … retention becomes the next challenge! 

That was my monthly look at the Canadian job market and some of its influences. 

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Kevin Dee is CEO of Eagle (a Professional Staffing Company)
Want to know where Canada’s hot jobs are?   Visit the Eagle Job Centre!
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The Power of Long Term Thinking

Over the last several months in conversation with friends and acquaintances the subject of the recession and its affect on the stock market arose.  I was very interested to hear that so many people actually “bailed out” when the value of their portfolio dropped, hoping to “stem the bleeding”.  My approach, after talking with our advisor, was to ride out the storm … and ultimately things rebounded and we did OK.

That got me thinking about “short term” versus “long term” thinking, and how each has its place, but they can get you into trouble too.

I took a long term view with the investments and it paid off … those who took a short term approach probably suffered.  Incidentally the way the markets have been behaving today it looks like we are in for another rough ride … but I will remember the lessons from last time around.  My investments are in companies with good fundamentals, well financed and strong balance sheets … sure their market value will fluctuate as the markets fluctuate but at the end of the day they will still be around and healthy when the markets recover!

 There are many areas of our life affected by short and long term thinking.

Public companies are often driven to meet quarterly numbers … at the expense of long term strategies!  Does that make sense? 

We sometimes make career decisions based upon a few more dollars in the pocket today … versus a better long term career path.  Does THAT make sense?

We sometimes react in the heat of the moment (very-short term thinking) causing issues with friends, colleagues and family when taking a few minutes to catch our breaths might make us realise that this “incident” is really not worth the impact in the longer term picture of the relationship we are harming.

In business we can easily be driven by our environment … reacting to client and market needs and the every day pressures we face.  Yet, in order to be successful we need to plan, to take a longer term picture of our business, develop a vision for where we want to be and what we want our business to be in the future.  The long term thinking can then influence the daily decision making, ensuring that you “stay the course”.

Those are just a few examples … but invariably taking the time to develop a longer term view will give a much better pay back than the short term view.   So … hold onto those investments, as long as they are strong companies.  Do not get spooked by all the “short term” thinking that makes the news … “the markets are tanking”, “the Dow is down at record lows” etc. etc. 

Now if only those US and European politicians causing all these problems could learn to think long term, instead of the next election, life would be good! 

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Kevin Dee is CEO of Eagle (a Professional Staffing Company)
Want to know where Canada’s hot jobs are?   Visit the Eagle Job Centre!
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CANADIAN JOB MARKET – Mini update Feb Mar 2011

 CANADIAN JOB MARKET – Mini update Feb Mar 2011

General Observations:
 
In February Canada added 15,000 jobs which means 115,000 jobs added in Canada in the last three months.  The unemployment rate stayed steady at 7.8%, same as last month.

The events of the past couple of months have had a significant impact on the markets … the tsunami and subsequent nuclear fears in Japan, coupled with the popular rising in the middle East have caused a fair bit of uncertainty, reflected throughout the markets. 

Canada’s relative stability, resource based economy and recent performance through the recession makes it a fairly safe bet for investors … so the Canadian Dollar remains very strong, still close to parity and as we speak it is trading at 99c U.S. The TSX is down about 300 points at 13,718, from this time last month, which is not so bad given the world events!   The price of oil means a lot to Canada’s Western economy and with it hovering around $100 a barrel and expected to be $116 a barrel this year the oil companies, and Canada’s Western economy, should have a good year.

For Eagle, February is normally a short month from a billing perspective and thus always impacts the revenue numbers.  As expected the numbers were lower, however, we did see an increase in the number of billable resources which is indicative of a steady increase in demand for skilled resources.  The number of orders from clients was also up about 10% over January, with approximately the same number of resumes coming in the door from people looking for work.  All of this is consistent with a continued steady growth in resource demand in the marketplace.

More Specifically:

The GTA (Greater Toronto Area) is the largest economic centre in Canada, has the most “head offices” and therefore can be expected to be a big demand market for people.  In February (the) we saw an increase in the already heavy demand from our clients … with the financial services sector and telecommunications industries leading the charge.  In addition, we are seeing an increase in demand from most industries, the system integrators, media, retail and insurance are some that are picking up the pace.

In Toronto we are reaching that “tipping point” where finding resources is becoming a major challenge, and with many people now receiving multiple offers … which shifts the balance of power a little.  Clients need to make their decisions quickly if they want to get the best people.

The types of people in demand cover a broad spectrum, with a big demand for “niche” industry skills such as banking or telecommunications specialties, in addition to Architects, Business Analysts, Project Managers, Senior & Intermediate accounting staff and even an increase in demand for developers. 

In Western Canada, as previously mentioned, the price of oil being almost $100/barrel means that many Calgary based companies have money to invest in their systems.  This creates demand throughout the “systems” of suppliers, and ancillary companies supporting that economy.  So Calgary is booming and Edmonton is busy, but expecting to get busier as a part of the booming oil economy.  In Alberta, like Toronto, we are seeing the pendulum swing to being a market where the skilled resource can pick from several jobs.  This makes it tough for companies to get the people they want unless they move very fast!   February was a month were we started to see some signs of increased demand in the BC market too, a market that never seems to have the same torrid needs of a Calgary or Toronto but increased demand is always welcome . and a good sign that things in general are picking up.

Eagle’s Eastern Canada region is mostly Ottawa and Montreal, as we spend less time focused on the Maritimes … however we are seeing signs of increased demand for people in the Maritimes too.  Ottawa is not extremely busy but there is a continuous demand as departments plan for the future and change their means of accessing resources.  We saw a big shift at Canada Revenue Agency, with CGI the loser of a large contract and a number of small companies are now supplying contract resources there … which creates demand and activity.  Montreal remains quite busy, and it is still largely driven by the financial services and telecommunications clients.
The following are some facts/indicators we are watching as of time of writing:

> The price of oil skyrocketed with the middle east disruption, and is currently at $100.80 a barrel, with a one year forecast of $116.

> At 13,718 the TSX lost about 300 points from last month’s reading of 14,027.

> The Canadian dollar continues to be strong and remains north of 99 cents US.
> Prime remains at 3% however there continues to be talk about when this will go up again!
> Canada added 15,000 jobs (322,000 in the last year) and the unemployment rate remained steady at 7.8%.

> Eagle experienced growth again in February, in the number of candidates applying, in the number of orders received from clients and in the number of people billing.

 Summary:
  Canada’s economy, like any other in the 21st century, is affected by world events.  If companies are doing well and feeling confident then they can invest, which creates jobs.  Currently Canada is doing well on the world stage, is a stable economy as reflected in a strong dollar which continues to hover around parity with the US dollar (when we started Eagle it was about 60 cents US!).  The unrest in the Middle East has affected oil prices which benefits Canada’s western economy resulting in investment in projects and jobs there, the largest market being Calgary but affecting most of the Western provinces.

 

All of this means that despite the terrible events in Japan and the upheaval across the Middle East, Canada is still in a recovery/growth mode.  In fact, its two largest markets (Calgary and Toronto) are seeing very active demand and signs of skills shortages.  The demand across all markets is generally up and we are moving from an “employer driven” market to an “employee driven’ market.  Hence my “standing advice” to ANY company needing people  (a) Start the process now with a strong PLANNING phase; (b) develop very clean processes to find, screen, choose, hire and onboard these new resources; and (c) know that you will have a lot of competition and therefore speed in decision making will be critical!

That was my monthly look at the Canadian job market and some of its influences.

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Kevin Dee is CEO of Eagle (a Professional Staffing Company)
Want to know where Canada’s hot jobs are?   Visit the Eagle Job Centre!
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The Canadian Economy Needs Independent Contractors

Recently Canada’s Revenue Agency (CRA) has been targeting independent contractors with a view to classifying them as Personal Services Businesses.  The rules applied are 30 year old rules that have not changed … which begs the question “why now?” … but the bigger issue is that the world today is VERY different than that of 30 years ago.  Suddenly interpreting these rules in a way that will damage the independent contractor eco-system is going to be helpful to nobody.

CRA will suggest that they will pay more taxes, but the reality is that our tax system will receive minimal benefit and the economy will suffer significantly … resulting in companies (that pay taxes) being less effective (read less profitable, resulting in less tax paid and people hired).

I contend that the independent contractor is an integral part of Canada’s economy and we cannot afford for that to change.

What is an Independent Contractor?

Typically he/she is a skilled person with a marketable skill who chooses to be self-employed.

What Risks/Costs Does an Independent Contractor Assume?

Job security.  They need to find their own work, typically on a project by project basis.  Their contract can be terminated with no notice due and for any reason … typically not within the control of the independent contractor.

Obsolescence.  They are responsible for their own training, and if they fall behind in skills then they become less employable.  This is particularly relevant in fast moving industries like High Tech.

Financial.  They are a business and can lose money if their client chooses not to pay them.  This will happen if the client is not happy with their work.  The contractor may also bear the cost of financing if their client is slow in paying them.  The contractor may incur expenses for travel and living in particular, which are usually reimbursed at a later date … but cause cash flow and interest payment considerations.

Tools.  While in the high tech industry most clients will not allow a contractor to bring their own computer (typically for security concerns), the contractor still needs to have state of the art tools.  A computer powerful enough to do training, in addition to marketing efforts, invoicing and other “housekeeping duties” associated with any business.  They may need to have specialized software to support their role, when working from home.  They will typically have a PDA and the ability to stay connected 24/7 in order to be available when opportunities knock.  They may have their own website and marketing materials, perhaps maintain a blog and twitter accounts to keep their name “out there”.

Incorporation.  The professional contractor operates like any business, with legal and accounting advice and an incorporated entity.  This will allow them to grow their business, to reduce some risks and to hopefully take advantage of some tax benefits … but the setup and ongoing costs are a real business expense.

Why Do People Become Independent Contractors?

There are many reasons … here are some.

  1.  Independence of not having a boss.
  2. To avoid the politics of being an employee.
  3. To have an opportunity to choose the work they accept.
  4. To have the opportunity to start a business, with a view to growing it into something bigger.  (Note that many of the BIG consulting companies and some software companies started with a couple of  independents getting together).
  5. Because they want to focus on their technical skills … not management.
  6. To earn more.
  7. To be an EXPERT in their field.
  8. For variety … working for various clients, various industries even in various geographies.
  9. To allow them more control over their own time.

Why Are Independent Contractors Important To Canada’s Economy?

Again there are many reasons … and here are just a few reasons that they help Canadian companies to be more effective.

  1.  Companies can bring in expertise that “hits the ground running” enabling them to implement projects more efficiently.
  2. Companies can bring these highly skilled, and more expensive resources in on a project basis … only paying for them when while they are actually needed.
  3. Companies can staff up to the minimal levels needed, and bring in contract help to help meet peak demands … allowing them to remain lean and competitive.
  4. Companies can use these experts to bring their own staff’s skill levels up, through knowledge transfer whilst implementing projects.
  5. Scarce skills in the market can be shared across multiple companies over time … allowing more companies to be successful than if those resources worked for one company.
  6. Using external help allows companies to get access to different perspectives, while still retaining their core staff.
  7. Companies can use contract staff to try out pilot projects with less risk … if it doesn’t work then the contractors leave.
  8. Companies can use contract help for short term needs such as covering for employees on extended leave … they come with good skills and leave when it suits the company.

The Canadian business model that includes independent contractors occasionally comes under attack, particularly when they are viewed as “employees” or “quasi employees”.  At an individual level there can be cases where the line is grey, but at a global level these companies bring tremendous value to Canada’s economy and it would be short sighted if our various levels of government targeted this group and made it unattractive to be a contractor … or too expensive for clients to be able to engage them.

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Kevin Dee is CEO of Eagle (a Professional Staffing Company)
Want to know where Canada’s hot jobs are?   Visit the Eagle Job Centre!
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CANADIAN JOB MARKET – Mini update Jan Feb 2011

CANADIAN JOB MARKET – Mini update Jan Feb 2011

General Observations:

 

 

In January Canada had a net gain of 69,000 jobs, split equally between full time and part-time.  An increase in job seekers caused an increase in the unemployment rate from 7.6% last month to 7.8%.  Over the last year Canada has added 327,000 jobs.

The Canadian dollar continues to be very strong, remaining very close to parity with the US dollar with a value around the 99 cent mark. The TSX continues to perform strongly, up more than 700 points from 13,304 last month to 14,027 today.  Generally there appears to be more optimism with 88% of CEOs at the World Economic Forum expressing confidence for the next 12 months.  Overall Europe is performing quite well, driven primarily by Germany and France, but some European countries are still struggling.  The upheaval in Egypt appears to have been resolved for the better, which will again be good for the markets which dislike uncertainty.

For Eagle, January was a decent month that resulted in some growth however the way the holidays worked out the number of hours worked was down a little.  As the month progressed we saw a large increase in orders which suggests that 2011 will see a continuation of the recovery experienced in the latter half of 2010

More Specifically:

The GTA (Greater Toronto Area) is Eagle’s busiest market and other than a slow start to the year (vacations) it does NOT look like it is slowing down at all.  As we have seen for many months now, the banks are extremely busy however we are also seeing a growth in demand from the insurance sector too.  The other sector with big demand has been the telecommunications industry and that has not slowed down either.  As the economy has recovered we have seen a steady growth across all sectors and most are now getting to that “very busy” stage, the retail sector comes to mind, as does the integrator market which has been enjoying strong demand for its services.  The Ontario Provincial Government was not exceptionally busy, however there is talk of an election and typically the government is a little slow to get going in January.  Eagle has seen this increase in demand across ALL of its offerings, clients need contract help from technology resources, finance & accounting professionals AND executive consultants.  In addition there is a big increase in demand for full time resources too!

In Western Canadathe price of a barrel of oil has meant that Calgary continues to be the biggest, most demanding market.  This leads to growth in demand from all of the related industries too, including the system integrators.  Conscious of the labour shortages during the last boom we are seeing an increased interest in outsourcing and offshoring among the big Calgary clients too.  Already we are seeing signs that skills shortages are close, with the best candidates getting “multiple job offers”, and clients who are slow to make the hiring decision losing those people.  With a change in political leadership expected in Alberta there is some caution in government spending so Edmonton is not as busy as it might have been otherwise.  The other Western cities are not experiencing a torrid start to 2011, so we will need to see how that unfolds.

Eagle’s Eastern Canada region was a little mixed this last month.  A slow Ottawa market could be a result of budget realignment, talk of an election or because the fiscal year end is on the horizon.  Montreal however continues to be busy, driven by the financial sector and telcos but we are also seeing media companies get a little more active.
The following are some facts/indicators we are watching as of time of writing:

> The price of oil is still “up there” at a little more than $85 a barrel, with a one year forecast of $98.
> The TSX jumped more than 700 point from last month’s reading of 13,304 to 14,027.
> The Canadian dollar continues to be strong and remains North of 99 cents US.
> Prime remains at 3% however there continues to be talk about when this will go up again!
> Canada added 69,000 jobs (327,000 in the last year) and the unemployment rate was up slightly to 7.8%.
> Eagle experienced growth again in January, in the number of candidates applying, in the number of orders received from clients and in closed business.

Summary

The start of January was a slow period as people continued their vacations, took a little time to get “back in the groove” and plans were made for the New Year.  As the month progressed and heading into February we saw a big increase in activity as clients looked to fill their open positions and candidates picked up their hunt for work.  In Canada we added 69,000 jobs and the unemployment rate is at 7.8% … not bad compared to 9.8% in the US and 9.6% in the EU.  The Canadian dollar is strong, which helps some sectors and hurts others … but is generally a sign of a healthy economy.

Across Canada the two big markets, with the most demand are Toronto and Calgary.  These are also the two cities with the most head offices, so this makes sense.  Montreal, Vancouver, Edmonton, Ottawa and the South West Ontario area are building in demand … if a little slower.

What has changed from the last boom is that companies are much more open to creative solutions to their people needs … companies are actively finding offshore and outsourced solutions.  The big demand in Canada is for skilled resources, whether that be technology, engineering and accounting professionals or tradespeople.  During the last boom in Alberta we saw a big demand for every kind of resource, with “help wanted” signs in every window and some stores closing due to lack of staff.  It remains to be seen whether we will return to those days, but I would NOT bet against it!

My standing advice to ANY company needing people is as follows:  (a) Start the process now with a strong PLANNING phase; (b) develop very clean processes to find, screen, choose, hire and onboard these new resources; and (c) know that you will have a lot of competition and therefore speed in decision making will be critical!

That was my monthly look at the Canadian job market and some of its influences.

CANADIAN JOB MARKET – Mini update Dec 2010/Jan 2011

CANADIAN JOB MARKET – Mini update Dec 2010/Jan 2011

General Observations:

In December Canada had a net gain of 22,000 jobs and the unemployment rate stayed at a pretty respectable (certainly for 2010) 7.6%.  Concerns about inflation were allayed in November with the consumer price index rising just .1% for an annual rate of about 2%, considered very reasonable.   The Canadian staffing index dropped to 83, which looks like a big drop however the index measure hours worked and December is a big vacation month and the seasonal expectation is for lower hours.  The index was up 9 points from December 2009. 

The Canadian dollar continues to be strong, remaining very close to parity with the US dollar with a value of greater than 99c. There continues to be concern in the markets, whether it be the economic state of Portugal or Ireland, the strength in the Chinese economy, the effects of Wikileaks or potential for strife around the World.  The TSX has however continued to perform strongly, up another 100+ points from last month at 13,304 as opposed to 13,172 in November.

For Eagle, December represents one of the biggest “contract end” months of the year and is always greeted with some trepidation.  For us December was a busier than normal month, with client demand remaining strong and a larger than normal number of contracts extended beyond the year end … another good sign that our clients are more optimistic and the Canadian economy is still doing well in its recovery!

More Specifically:

The GTA (Greater Toronto Area) has been Eagle’s consistent engine of growth for 2010 and December was again a very busy month.  If anything it is getting even busier, with consistent demand from the financial institutions as they invest in their systems.  The Telcos are also very busy as they invest in their systems to remain competitive in an ever more competitive landscape.  As expected the increased demand across large clients has meant that the system integrators also enjoying growth which means increased demand in the professional staffing world too, as they seek to augment their teams and access niche skills.  Even the provincial market has been relatively busy of late!  The GTA market generically has been busy in both of Eagle’s areas of focus technology resources and finance and accounting professionals.  The need has been for both full time resources and contract/temporary resources … so Toronto is a good place to be looking for a job if you have skills in IT or accounting.

Demand across Western Canada continues to increase, yet clients are also very careful about how they spend, and so rates, to date, are being held down and the demand for full time staff is fairly high.  Like the GTA this phenomenon is happening in demand for both IT resources and finance and accounting professionals.  Calgary remains the hottest market with increased demand across multiple industries but driven by the oil and gas sector and its supplier base.   The other Western markets continue to see increased activity too, just not at the Calgary/Toronto pace!  

Eagle’s Eastern Canada region continues to heat up too, with Montreal particularly busy in demand for finance and accounting professionals as well as technology professionals.   The Federal Government in Ottawa has been fairly busy in their need for contract resources of late.  Technology employment in Ottawa is heavily dominated by the government too as the number of private sector jobs have dwindled over the last few years as the hi-tech sector has shrunk.  There is an uptick in demand for full time employees too but the strong supply in the region means that Ottawa is still an employer’s market.

The following are some facts/indicators we are watching as of time of writing:

> The price of oil is steady at just over $88 a barrel, meaning oil companies in the West are investing in projects again.
> The TSX had another decent month currently sitting at 13,304, up more than 100 points from the last month reading of 13,172.
> The Canadian dollar continues to be strong and remains North of 99 cents US.
> Prime remains at 3% after three recent increases, and is not expected to rise again soon!
> Canada added 22,000 jobs and the unemployment rate stayed steady at 7.6%.
> December was a strong month for Eagle, following a bumper quarter.
> The Canadian Federal government market continues to generate demand, focused primarily on renewing their aging systems, and addressing the “boomer’ brain drain to retirement.

 Summary:

December is often a slow month due to less work days and the distraction of the holiday season.  This year however we continued the job of recovering from the recession.  Unemployment rates are respectable, certainly on the world stage, the Canadian dollar remains strong and inflation is not an immediate concern.

Across the country employers continued to demand resources to help them to be more competitive in this global economy, comply with changing regulatory requirements (IFRS) and differentiate from competition.  We have seen steadily increasing demand in the larger markets for some time now and the pendulum is switching from an employer market to a candidate market.  Clients want to bring on the very best employees and the top contractors whether in the technology space or the accounting world.  More and more we are having to instruct our clients to be a little more flexible in their demands and the need for a speedy hiring process is paramount.

I said it last month and at the risk of being repetitive I will offer this advice to any companies considering hiring.  (a) Start the process now; (b) develop very clean processes to find, screen, choose, hire and onboard these new resources; and (c) know that you will have a lot of competition, so don’t procrastinate!

That is my monthly look at the job market across Canada and some of its influences.

Kevin Dee is CEO of Eagle (a Professional Staffing Company)

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