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Coming up empty: Long-running unemployment poses mounting hiring challenges

FNS Photo by David Samson Steve Varty, left, of Professional Transportation Inc. interviews Ismail Dini on Thursday during an on-site job fair at the Fargo Job Service office.

FARGO — A software engineer with about five years’ experience, Blaine Booher is seemingly the answer to North Dakota’s workforce woes. He and his wife, who moved here from Cincinnati six months ago, will even be featured in a series of online videos meant to attract out-of-staters to North Dakota’s abundant job market.

But as owner of Clifton Labs, a hardware, software, mobile and Web development firm with offices in Fargo and Cincinnati, Booher is experiencing the exact same worker crunch as many local employers.

“It’s a great problem to have as an economy,” Booher said.

North Dakota’s low unemployment rate is touted as good news, a sign of prosperity. The state has boasted the nation’s lowest rate since spring 2009, said Michael Ziesch, manager of Job Service North Dakota’s Labor Market Information Center.

But there’s a dark side to that seemingly sunny stat.

In the Fargo-Moorhead area, where unemployment is 3.3 percent, employers often can’t find enough workers or those with the right skills. It’s a common refrain across sectors: retail, service, tech, industrial and skilled labor.

Fargo Job Service has more than 6,300 local job openings listed on its website, compared to just over 2,100 people seeing work, said Carey Fry, Fargo Job Service office manager.

That’s three jobs for every person in their system. And a lot of those seekers already have a job, Ziesch said.

“People think all the jobs in North Dakota are out in the west. That’s just not the case,” Fry said.

Fry has had to turn away more companies from Job Service job fairs than ever before, and she’s seen a huge increase in on-site job fairs. Individual employers set up a desk in the Job Service office about three times a week, she said.

“It’s increased over the last couple years,” Fry said. “Before that, it didn’t really happen at all.”

The tight labor pool gives leverage to workers. Those willing to be trained for an in-demand skill can improve their fortunes, Fry said.

But the ongoing worker shortage keeps local companies from expanding. It also makes it more difficult to attract new businesses or industries.

“As good as things are in our region and in our marketplace, they could be exponentially better if we had an unlimited supply of labor and qualified labor,” said Mark Vaux, executive vice president of business development with the Greater Fargo Moorhead Economic Development Corp.

In some cases, if companies can’t find or attract the labor here, they open satellite operations in other parts of the country or world.

“That’s a bit concerning, because sometimes when that business leaves, it doesn’t come back,” Vaux said.

Effects widespread

In the Fargo Moorhead West Fargo Chamber’s 2013 survey of members, nearly 40 percent of respondents said difficulty attracting and retaining qualified employees was the No. 1 factor expected to adversely affect business in the next 12 months. That was up from fifth in 2012, and more than 80 percent placed it in their top five.

Vaux and Craig Whitney, president of the local chamber, say the topic is discussed with almost every business their organizations visit.

“We have such a strong manufacturing presence in this community that we’re very fortunate to have, but it requires a specially trained worker,” Whitney said.

The shortage is seen in other skills and trades, such as the plumbing and heating industry. Kevin Riley, vice president of service, sales and marketing for Robert Gibb & Sons, said the company has been trying for six months to find someone for its Bismarck location. It even started advertising on bathroom signs.

“We’ve tried everything,” Riley said. “We just can’t get anybody.”

Riley said the company is concerned for the future. Fewer and fewer people are going into the field, while the industry projects a 21 percent increase in demand over the next 10 years. The company has talked about offering scholarships or paying back student loans.

“HVAC and plumbing are old professions that don’t get the glitz and glamour that some of the newer professions get, but are very lucrative and respected,” he said.

Booher, of Clifton Labs, would like to hire 15 engineers by the end of the year and double in size by next year. Open desks that were earmarked for administrative staff are remaining open for his potential engineering hires.

So far, Booher has hired three electrical engineering grads from North Dakota State University. But software engineers with the right skill set have been harder to come by, he said. So are mid-level engineers.

It’s a small talent pool to begin with, Booher said, and he can’t compete with the pay larger firms offer. He focuses on what he can provide: flexible hours, workplace culture and interesting projects.

“We do get job applications from time to time,” he said. “Then you’re playing the sales game.”

Even jobs that require no specialty training are staying empty, prompting the sort of aggressive hiring incentives that have drawn attention in the Oil Patch.

Lakemode Liquors in Fargo has had a dearth of applicants, despite advertising on multiple websites, bumping up starting wages and offering a $100 sign-on bonus, said co-owner Jodi Arneson.

Ziesch said North Dakota’s labor force participation rate — non-institutionalized civilians over age 16 who are engaged in the workforce — is 72 percent, compared to 63 percent nationally.

But Oxbow Country Club General Manager Livingood said hiring has been more challenging this year than before, especially in the grounds crew and kitchen. He said the club has had to increase wages. It’s also been touting its ancillary benefits, like rounds of golf.

Public relation campaigns aren’t enough, though, Whitney said, suggesting a comprehensive workforce study.

“It’s our number one challenge,” said Vaux, “and we’re certainly very aware of it and addressing it in partnership with the businesses, Job Service and education providers all across the board, K-12 and beyond.”