During the Great Recession, people across the country had trouble finding work. Now, a decade later, businesses in Minnesota and Wisconsin are struggling to find workers to fill open jobs.
One local group that has felt the impact is the Red Wing Housing & Redevelopment Authority. Director Randal Hemmerlin said the HRA was having a hard time filling maintenance positions in November.
“This was going on now for a while,” Hemmerlin told the Red Wing City Council during its December 9 meeting. “So I decided that we needed to figure out what was going on.”
Mark Schultz is a labor market analyst with the Minnesota Department of Employment and Economic Development.
“The big issue is what we call the ‘job seeker per vacancy ration,’” he said.
This ratio looks at how many people are looking for a job compared to the number of jobs that need to be filled. Currently, the southeastern Minnesota ration is 0.6 to 1.
“That kind of sets the tone for pretty much everything,” explained Schultz.
Cause of the shortage
The population of most of the country is aging. In this region, the number of workers between the ages of 45 to 54 is expected to drop by 11,600 people from 2020 to 2040. Simultaneously, the 75 to 84 population is projected to increase in number.
While the population is aging, it is also declining in numbers. It is projected that there will be fewer people in the 15 to 24 category in 2040 than there are now.
Combating the shortage
The Red Wing HRA found through a study that looked at the organization’s job positions that it needed to offer a higher salary to attract the limited number of people looking and qualified for the maintenance job.
Employers in the region are currently testing a variety of incentives to get people to work for them. These include hiring bonuses, education reimbursement, higher wages, and reconsidering people they wouldn’t have considered 10 years ago. Schultz explained that more companies are hiring people with a criminal background.
One manufacturing company in Mankato did away with background checks completely. This practice will not expand to all jobs or industries, specifically those that work with children or vulnerable adults, officials said.
There also has been a push to keep employees with a company. A decade ago, many companies offered severance packages as incentives for early retirement during the recession.
Now, according to Schultz, companies “offer incentives to keep people on past retirement age.”
There is data suggesting that employees are staying with a company longer than in years past. The Pew Research Center published “Changes in the American Workplace” in 2016. The report states:
“Job tenure, measured by how long workers have been with their current employer, has increased in the past three decades. Most of this increase occurred since 2000. In part, this is due to the rising share of older workers in the labor force. These workers tend to have a much longer tenure with their employer. But the economic downturns this century, such as the Great Recession, may also have been a factor, making it harder for workers to switch jobs.”
In 2014 the median tenure for all workers was 4.6 years. In 1983, the median tenure was 3.5 years. The median time spent with one company varies by demographic. For example from 1983 to 2014 female employees went from a median of 3.1 to 4.5 years with an employer. Men, meanwhile, went from 4.1 to 4.7 in the same time frame.
By keeping employees on longer, employers spend less time looking for and training new people.
The workforce was also impacted by the “ban the box” campaign. Beginning in 2009, public employers in Minnesota were required to remove the box on job applications for applicants to mark if they had a criminal record. This ban was expanded to private employers in 2014, according to the Minnesota Department of Human Rights.
Schultz stressed that this law does not mean that employers can’t ask about criminal backgrounds or do a background check during the hiring process. It simply allows people with a criminal background a chance at an interview and the ability to explain their past in person. Schultz concluded that everyone has done something bad or illegal during their life. The only difference?
“Some of us haven’t been caught.”
The Minnesota Department of Employment and Economic Development is working on a study that looks at employment for people with criminal backgrounds. The results are not yet available to the public.