Local economy proves resilient, but businesses struggle to fill jobs
Area businesses are having trouble finding qualified employees, and face other challenges that include high health care costs, a shortage of child care and increasing minimum wages.
Those are among the findings from interviews the Alexandria Lakes Area Chamber of Commerce's Grow Minnesota team conducted last year with 16 local businesses.
In all, nearly 900 business owners and managers across the state took part in confidential one-on-one conversations in 2019 as part of the Minnesota Chamber’s Grow Minnesota! Partnership, a private-sector business retention and assistance program.
Statewide, the report showed that job growth has slowed as businesses continue to struggle to find and retain workers. As of October, Minnesota’s job growth fell to 41st among all states, increasing at an annual rate of 0.4%.
Those struggles were also noted in the Douglas County area. Two consistent messages the Alexandria Chamber received throughout its visits were a “lack of a workforce” and a “lack of a qualified workforce,” said Tara Bitzan, executive director of the Alexandria Lakes Area Chamber of Commerce.
“Many businesses simply cannot find enough workers to fill the jobs they have, or to fill jobs they would like to make available with growth or expansion,” Bitzan said. “Because of this, some businesses are choosing not to grow or expand, which may factor into why Minnesota’s overall job growth has slowed.”
Nicole Fernholz, executive director of the Alexandria Area Economic Development Commission, called the worker shortage the No. 1 economic problem in the area. She said it has been an issue for the last decade, and could remain one for the next 10 years.
The Alexandria Area EDC is a partner with the Chamber for this cause and Fernholz came to a number of interviews with local businesses. Also on the Grow Minnesota team in 2019 were Shari Laven of Viking Bank, Sue Lundeen of Runestone Electric Association, Laura Urban of Alexandria Technical and Community College, and Bitzan, Andrea Dwyer and Lauren Johnson of the Chamber.
Some companies trying to solve this problem have turned to implementing sign-on bonuses for new employees and creating their own training teams.
To address the high cost of health care, some companies are implementing their own health care clinics. Alexandria Industries and Douglas Machine Inc. have their own walk-in clinics.
The lack of child care has caused workers to either quit their job in order to care for their child, or ask grandparents or other family members to care for them, Fernholz said.
First Children’s Finance ran a study last year about child care that showed parents of 270 children in Douglas County could not find child care. This could mean that 270 employees could not work anymore, she said.
Increasing minimum wages could cause a company to go out of business, Fernholz said, because it might not be able to afford the higher minimum wage. It also could be problematic because employees tend to move to places with a higher minimum wage, so businesses with lower minimum wages lose those employees.
Despite these issues, many local Chamber member businesses reported an overall good year in 2019 revenue-wise. The downtown retail sector had significant traffic over this winter, Fernholz said. Chamber members that took part in the study are optimistic that this trend will continue through 2020.
The statewide report showed similar results. Businesses remain fairly optimistic about their outlook for 2020. Sixty-three percent of those visited in the second and third quarters of 2019 projected increased revenue growth in the coming year, compared with 57% that reported revenue growth during the past year.
On a similar note, 41% of the state respondents plan to add workers in 2020, compared to the 32% that added workers this year.
Fernholz said industries sometimes pull workers from each other because the market for employees is so competitive and there are many options.
“It’s an employee market and they might have no issue leaving a job for 25 cents more an hour, whereas you didn’t hear of that 10 years ago,” she said. “You liked the company, you liked the culture, you felt comfortable, you knew your job and you stayed.”
Another problem is the fact that the baby boomer generation is retiring and there aren’t enough of the younger generations, such as millennials and generation Z, to fill the empty space, Fernholz said.