Editors Notebook

KEEPING PACE
From ared gas to safety measures, support services companies must grow with the industry to stay on stable ground By Luke Laggis

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Luke Laggis

n January 2010, North Dakota alone had 4,628 producing gas and oil wells. The number rose all the way to 8,224 by December 2012, the most recent numbers available. Thats an increase of 78 percent in three years. Over the same time period, oil production jumped from 7.3 million barrels per month to 23.8 million barrels per month, an increase of 226 percent. Gas production jumped 216 percent, from 7.9 million MCF to just shy of 25 million MCF. More oil and gas is being pulled from the ground more efciently, and less gas is

homes. The gas processing unit, natural gas generator and portable LP storage tank are all on wheels, so they can be moved quickly when a gas pipeline is built to the well and G2G is no longer needed. The boom has had a huge impact on all the companies that provide support services for the drillers in the Bakken area. Workloads have grown at unprecedented rates, and companies have been forced to hire at equally impressive rates to keep up with the demand for their services. In this months Building the Business column, Marsha

Taking a chance on someone to ll an open labor position might not be a big deal for a major drilling company, but if youre a smaller company oering pumping or hauling services, you dont want to take a chance on someone who may not represent your company as you wish. You have too much to lose.
being ared off. Part of the reason for that is the development of new technology to capture the natural gas liquids. One of the developers of that technology is G2G, a service company proled in this issue. G2G, formed by three engineers with different backgrounds but much common ground, has developed mobile technology to capture gas liquids that would otherwise be ared off and wasted. Theyve created their own boom by identifying a problem and developing a viable, cost-effective solution. About a third of the gases from new wells are ared, according to recent estimates, and a single G2G system will prevent 4,000 to 5,000 tons of CO2 equivalent emissions from gas ares in a year and capture enough energy to heat nearly 1,300
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Lindquist discusses how to make sure youre attracting and hiring the right people. In a booming oil area, workers ood in from all over the country. Taking a chance on someone to ll an open labor position might not be a big deal for a major drilling company, but if youre a smaller company offering pumping or hauling services, you dont want to take a chance on someone who may not represent your company as you wish. You have too much to lose. Of course, when you do nd the right people, you need to take care of them and treat them right. This months Safety First and Tech Perspective articles both address this important issue. Safety First takes a look at injury prevention programs and their importance in protecting workers from

hazards and employers from big hits to their bottom line. A study conducted by the Ohio Bureau of Workers Compensation analyzed the policies of 16 employers over a 12-year period from 1999 to 2010. The study compared the employers experience before and after entering into the OSHA Safety and Health Achievement Recognition Program (SHARP), which recognizes small employers that operate exemplary injury and illness prevention programs. Results showed that the average number of claims for these employers decreased by 52 percent, the average claim cost decreased by 80 percent, and the average lost time per claim decreased by 87 percent. Those are certainly signicant numbers for anyone employing people in potentially dangerous environments, and they speak both to the human and nancial rewards of taking care of employees. Peter Kenters Tech Perspective article takes a different look at safety. After witnessing an accident at a remote fracking site and having no proper place or supplies to deal with the injury until help arrived, Josh Galindo realized oil and mining contractors needed something better. He developed the concept for a medical trailer and eventually founded Nomadic Safety, Inc. of Loveland, Colo. The company designs and builds the trailers to provide immediate medical assistance at remote sites until qualied medical teams arrive. The trailers provide a clean, climatecontrolled environment for immediate patient care, along with the necessary supplies, equipment and instructions. Most importantly, they provide the potential for better outcomes when workers are injured, and thats good for everyone involved. Better outcomes are what were all after, in business, life and emergency situations. An important part of this magazine is providing you the information and insight necessary to improve your business. I hope these stories help you in that regard. Enjoy this months issue. GOMC

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Building the Business

THE RIGHT PEOPLE

Evaluate your needs, take your time, and use creative hiring practices to land great employees
By Marsha Lindquist

n times of higher unemployment, people are out there looking to enter the workforce. But you dont want to hire just any worker you want to nd the right employee for your company. And chances are, youve found the hiring process a frustrating exercise in the past. Consider the typical scenario: You place a classied ad in the newspaper for your open position and you receive a slew of applications. Out of those applicants, you only nd a few you want to interview. After you conduct interviews, youre not impressed, but are forced to make a decision because you need to hire someone, or so you think. Too often, employers hire the wrong people out of a sense of urgency. As a result, they fall into the same pattern theyve always used to seek employees, and theyre less than pleased with the results. Reliable workers are out there; you just have to know how to nd them. The key is to try a new approach. The following tips will enable you to nd quality workers you can count on. Seek seasoned employees Companies often employ young, inexperienced workers, who sometimes think and act like they know it all. Having young, dynamic and energetic people in your workforce is great. But you also need to have seasoned individuals with the knowledge and skills gained from years of experience. If you need to hire help, dont automatically go for a recent high school graduate for a driver or a college grad as a manager or sales representative. Instead, consider what you gain by hiring

someone with years of experience. When you hire seasoned individuals, its a win-win situation for everyone involved. The experienced people take great pride in being asked to help develop younger workers, and young workers gain a great depth of knowledge from the seasoned employee. Consider more than one job category If you cant seem to nd the right person for the job, you may be looking for the wrong type of employees. Often employers automatically think they have to hire for

Dont rush Its often a mistake to be in a hurry to ll an empty position. Slow down and analyze what needs to be done and what type of person you are looking for to join your team. Think of all of the possibilities. Can you move people around within your organization? Do any employees have crossover duties you can combine into one position? Maybe youll nd that you can combine jobs previously done by two different people, thus freeing one of them for the position you are seeking to ll. Take the time to evaluate your needs and you may nd the solution is not hiring anyone. Consider a different demographic Dont forget about retirees and senior citizens. You can nd a lot of talent in people who dont want to work a lot, but they have incredible experience. This group is likely not seeking full-time employment, so you may be able to hire them as parttime employees and save the expense of providing health insurance or retirement

Too often, employers hire the wrong people out of a sense of urgency. As a result, they fall into the same

pattern theyve always used to seek employees, and theyre less than pleased with the results.
full-time permanent positions. You need to get out of that mindset. Re-evaluate the position youre hiring for. Is it really a permanent position? Do you really have enough work to justify bringing someone on full time? Might you be better off hiring part-time people, consultants or a virtual assistant? This evaluation could save your company a lot of money. When you consider job categories besides full-time permanent, you can alleviate a nancial burden for your company, and you may be able to bring in more creative individuals. Thinking you can only hire full-time permanent people limits your possibilities. benets. Older workers understand your expectations and know how to work hard. Dont hire from a piece of paper You probably have a wish list in mind of exactly what skills and qualities youre looking for in an employee. But you should look for a great attitude rst. Always base your hiring decision on the person, not on whats on his or her job application. In the end, you will be better off hiring the person with the right attitude and only some of the skills you are looking for rather than someone with the right skills and the wrong attitude. You can always train for the job, but you cant train for a good attitude.

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On the Money

KEEPING STOCK
Smart inventory control will help you save money and boost prot
By Erik Gunn

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Erik Gunn

f you think of your business as providing a service more than selling products to customers, you might not think about inventory very much. After all, thats really an issue for retail stores isnt it? Think again. Whatever service you provide inspecting sewers, cleaning out clogged drains, pumping out septic tanks you still have inventory to consider. A lot of your business will involve repairs of some kind, which means you have to stock spare parts. And then there are the tools of your trade another sort of inventory you need to manage properly.

really want your customer to have to wait an extra day until you get the pipe? Not if you want to get called the next time. Staying on top of inventory is critical to keeping your business healthy and your prots up. And its the same kind of problem Goldilocks had when she visited the empty home of those three bears. You want to avoid the extremes not too much, not too little and gure out what is just right. THE BASICS For some suggestions, I called up Ted Angelo, executive vice president at Grunau

much youve used in the last year, then keep enough to last you 30 days. Set a trigger point for stocking up; dont wait until youre all out before you re-order. But also, be sure that whoever is responsible for maintaining your supply isnt replenishing it two or three times a month, which means wasted time. And if your employees have specialized tasks, you may nd that those regular items for one are quite different from what a coworker may need to stock. Make sure you take those kinds of differences into account. Dont use it all up at once. When a big job comes along that will demand all, or even a signicant portion, of your 30-day inventory of a particular part, dont take it out of the regular inventory. On that particular occasion, well get a whole box to use on that job, Angelo says. We dont want to use up our inventory on one job. That way workers dont run short on one of those highdemand items when they respond to routine customer needs. THE LEAN DIFFERENCE Those are some pretty straightforward principles for managing inventory, however large or small your business. But what about the products you only use 20 percent of the time? That can be where the biggest problem arises. Do you keep all of those products around, taking up space in a warehouse when you might hardly ever need any of them? Grunau doesnt do that anymore, says Angelo. And thats where the companys unconventional approach comes in. The company has been pioneering the use of lean techniques in construction for several years. Lean is all about getting waste and inefciency out of the system. Its been the byword for manufacturing for more than a decade now, but its still a new concept in industries like construction. I got to know Ted a couple of years ago when I helped edit his book on the subject. And part of thinking lean is rethinking inventory. How do you do that? Here are some of the ideas that Grunau has put in place. No warehouse. The bread-and-butter components are stocked right on the companys service trucks, Angelo says. Those other

I stress to our people over and over again, if the technician or his helper cant go into his van and nd something in 30 seconds, he hasnt labeled it properly.
Ted Angelo

And you must manage it. If you store too much, that means youve spent money you didnt have to in order to buy the stuff in the rst place. Even the storage space is costing you something. And while some of your stock might keep on the shelves forever, there are other products you know which ones, depending on the business youre in that will go bad over time. (I once made the mistake of buying up a lot of ink cartridges for my computer printer because of a discount only to learn the hard way that it can get old in the package. I had to throw out some unused cartridges, and now I only buy ink as I really need it.) Too little inventory can hurt you, too. Suppose youre unclogging a drain and discover a previously undetected leak demanding a new replacement drainpipe. Do you
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Co., a large mechanical contractor based in the Milwaukee suburb of Oak Creek, that does business across the country. Were unconventional when it comes to inventory, Angelo says. Indeed, thats true, and Ill explain why, and what you can learn from that, in a moment. But rst, a word or two about the basics. Remember the 80-20 rule. That old formula ts your inventory supply just as it does so many other aspects of your business: Roughly 80 percent of what you do probably entails a pretty small selection of components. Angelo calls those the breadand-butter items for the business, and Grunau maintains a master list of those. They are about 80 percent of what the company keeps in stock. Keep a 30-day supply. For those bread-and-butter components, count how

Safety First

A POUND OF CURE
Injury prevention programs yield safer workplaces with low cost and little hassle
By Luke Laggis

N
Luke Laggis

o one plans to get injured on the job. Likewise, employers never want conditions to be unsafe for their workers. Still, tight deadlines, difcult circumstances and unpredictable work site conditions can all lead to situations that put workers at risk. Injury and illness prevention programs are aimed at nding and xing workplace hazards before workers are hurt. OSHA estimates that employers can expect up to six times a return on their investment for every dollar spent on injury and illness

do work for small businesses. For example, the Ohio Bureau of Workers Compensation analyzed the policies of 16 employers over a 12-year period from 1999 to 2010. The study compared the employers experience before and after entering into the OSHA Safety and Health Achievement Recognition Program (SHARP), which recognizes small employers that operate exemplary injury and illness prevention programs. The preliminary results of the study show that the average number of claims for these employers decreased by 52 percent,

Ultimately, safety needs to be part of the culture, not just an exercise in compliance, and OSHA cites several sources of research showing that prevention programs are eective in transforming workplace culture.
prevention. A recently released white paper detailing how to create a prevention program, how such programs work, and how they affect businesses and the workforce provides a good overview on the real costs of workrelated injuries and the steps you can take to prevent them. SMALL BUSINESSES For contractors with only a few employees, creating an injury prevention program may seem unnecessary, but the time and money that can be saved through injury prevention makes the effort worthwhile. After all, a two-person operation will suffer much more from a lost-time injury than a larger operation where a bigger pool of workers can absorb the workload. There is strong evidence that injury and illness prevention programs can and
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the average claim cost decreased by 80 percent, and the average lost time per claim decreased by 87 percent, according to the paper. LOW-COST APPROACH The OSHA paper acknowledges that for many small businesses, establishing an injury and illness prevention program can be daunting: Any program based on formal structures can be difcult to establish in a small organization because of tight budgets. Yet simple, low-cost approaches have been shown to be effective in small businesses. Injury and illness prevention programs lend themselves to such low-cost approaches because they are highly exible the core elements can be implemented at a basic level suitable for the smallest business, as well as at a more advanced,

structured level that may be needed in a larger, more complex organization. OSHA estimates that employers who do not yet have safety and health programs can reduce injuries 15 to 35 percent by implementing injury and illness prevention programs. At the 15 percent program-effectiveness level, this saves $9 billion per year in workers compensation costs; at the 35 percent effectiveness level, the savings are $23 billion per year, the paper states. The paper notes two industry consensus standards for injury and illness prevention programs. The American National Standards Institute (ANSI) and American Industrial Hygiene Association (AIHA) have published a voluntary consensus standard, ANSI/AIHA Z10 2005 Occupational Safety and Health Management Systems. The Occupational Health and Safety Assessment Series (OHSAS) Project Group, has produced a similar document, OHSAS 18001 2007 Occupational Health and Safety Management Systems. When it comes to injury and illness prevention programs, every business is different, and one size certainly does not t all, OSHA states. Employers who implement injury and illness prevention programs scale and adapt these elements to meet the needs of their organizations, depending on size, industry sector or complexity of operations. Ultimately, safety needs to be part of the culture, not just an exercise in compliance, and OSHA cites several sources of research showing that prevention programs are effective in transforming workplace culture. That, in turn, leads to a host of benets. The paper notes that, Based on the positive experience of employers with existing programs, OSHA believes that injury and illness prevention programs provide the foundation for breakthrough changes in the way employers identify and control hazards, leading to signicantly improved workplace health and safety environments. The complete white paper can be viewed and downloaded from the OSHA website at www.osha.gov/dsg/topics/ safetyhealth. GOMC

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