A strong human resources base could help the paper industry get back on track if companies would stop letting their best talent slip away to competitive businesses.

by Gilly Hitchcock and Mike Luciano

The start of a new year is an appropriate time to look back at hiring trends that unfolded in the prior year and make some projections about what lies ahead. In 2005, hiring in the paper industry sectors came in bursts and, as usual, were very cyclical.

Increased hiring by the supply and service side to the paper industry continued through 2005. Repeatedly during the year, job order requests on the pulp and paper side would pick up, but then go on hold after a company's quarterly results came out. Right sizing, down sizing, and mergers and acquisitions continued to play a big part in 2005 hiring trends.

Yet, as frequently noted in this column during 2005, the availability of talent to the North American paper industry has continued to drop. Companies need to start looking and hiring new talent now before other competing companies (many not related to the industry), start grabbing them first. And trust us, they are doing just that.

The developing talent shortage, however, is being ignored or perhaps not recognized by some managers in the paper industry. We recently received cautioning comments, for example, about being overly optimistic, and that we might be swimming upstream against a maturing industry. Some hold the view that paper industry jobs, in fact, will be shrinking. “Go West…to the Far East” is a prevailing attitude today. “That's where it's happening.”

OVER THERE
Admittedly, a lot is happening “over there,” especially in China. Sure, labor, including engineers, comes cheaply in China, at least by our standards. That emerging country, however, does have its own set of issues, and eventually some engineer is going to figure out that $3,500/yr. just isn't that great, and a “new” cultural revolution will begin.

Certain things impacting the North American paper industry are beyond its control, and lack of immediate action is sometimes understandable. But standing still in the hiring arena could definitely backfire in the long run. Mills need capital and must have the right human resources to remain competitive long term.

Recently speaking about his company, a North American mill manager said he could not control mergers, acquisitions, closures, greenfield startups, and lower labor costs in other states and countries, as well as taxes, etc. But, he said he could ensure that he has the right people, makes the smart investments in capital, and continually improves his mill's products and customer service.

This manager's optimism is based on the positive and sure things we do have in this country—natural resources and an experienced, highly talented labor force. He also pointed out the things that we continue to do well, such as niche marketing and small quantity shipping.

LEARNING FROM THE PAST
In the past, whenever the paper industry has “paused,” many human resource issues have taken a direct hit, from hiring to training. Whenever downsizing, rightsizing, or whatever term might be in vogue occurs, mills end up losing both green and seasoned “firewood” to keep them fueled for the future.

In many cases, this firewood is never replaced, at least not right away. Reemphasizing the points above, when and if the company hires again to replenish these positions, the talent they want—that they will desperately need—has gone elsewhere.

As with the mill manager optimistic about what he does have positive in his corner and can control, the North American paper industry as a whole perhaps should take stock of the great resources it has available and chart a new direction forward. Although today the “mill proper” might be outsourcing many of its non-core activities, these are nevertheless a part of our industry and also need experienced talent to help keep us healthy and alive.