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Finding Diamonds in the Rough

by Mark Schultz
August 2106

According to DEED's Local Area Unemployment Statistics, there are 10,264 unemployed individuals in Southeast Minnesota as of June 2016; a 3.7 percent unemployment rate. Of the 13 Economic Development Regions in the state, Southeast Minnesota has the lowest unemployment rate. And while this appears to be a strong point of the region since it appears that people are finding and retaining work, one integral problem arises from this apparent strength - there are fewer jobseekers per vacancy which is making it difficult for employers to fill job openings.

The most recent data from DEED's Job Vacancy Survey show that there are 8,240 vacancies in the region across all occupations as of the fourth quarter of 2015. During this same quarter an average of 7,842 unemployed individuals resulted in slightly over one jobseeker per vacancy. As seen in Figure 1, the jobseeker per vacancy ratio has seen a steep decline since the height of the recession, dropping from a high of 9.3 jobseekers per vacancy during the second quarter of 2009 to a low of 0.8 per vacancy in quarter two of 2015. During this time there had only been three increases, one of 0.1 from quarters two to four in 2011 and another of 0.3 between the same quarters the following year. These increases paled in comparison to the overall massive decline since 2009.

Figure 1: Jobseekers Per Vacancy in Southeast Minnesota, 2007-2015

As shown in Table 1, there are many vacancies in the Southeast region – over 8,200 across all occupations. The leading occupations for job vacancies include food preparation and serving related, sales and related, healthcare practitioners and technical, and production. What is somewhat unsettling is that the top two occupational groups with the highest number of vacancies have a high percentage of part-time vacancies, and most of these probably do not come with benefits such as retirement plans and health care. According to DEED's Occupational Employment Statistics data the median wage for food preparation sits at $9.29 and $11.14 for sales and related – both of which are well below the $17.77 median wage across all industries. Thus, we are facing a phenomenon where there are fewer jobseekers per vacancy, and the occupations with the highest number of vacancies may not be too appealing to those who are looking for work. Granted, jobs in these top two occupational groups may work fine for those looking for a second job for some extra money, but for those looking for a career they may not be an attractive option.

Table 1: Vacancy Counts and Characteristics by Occupational Group
Occupation Number of Job Vacancies Percent Part-Time Percent Temporary or Seasonal Percent Requiring Post-Secondary Education Percent Requiring 1 Plus Years Experience Percent Requiring Certificate or License
Total All Occupations 8,240 41% 9% 33% 30% 30%
Food Preparation and Serving Related 1,407 79% 1% 3% 20% 1%
Sales and Related 1,011 76% 10% 9% 13% 3%
Healthcare Practitioners and Technical 841 27% 1% 81% 55% 78%
Production 788 9% 17% 9% 12% 2%
Office and Administrative Support 643 37% 32% 9% 24% 7%
Personal Care and Service 556 47% 1% 27% 12% 35%
Transportation and Material Moving 485 51% 27% 1% 46% 63%
Construction and Extraction 446 0% 2% 80% 14% 84%
Healthcare Support 421 56% 0% 48% 12% 75%
Education, Training, and Library 235 32% 15% 90% 48% 69%
Building and Grounds Cleaning and Maintenance 233 16% 1% 0% 21% 2%
Installation, Maintenance, and Repair 201 7% 0% 31% 32% 46%
Management 191 1% 0% 91% 95% 25%
Computer and Mathematical 169 2% 8% 92% 91% 6%
Architecture and Engineering 153 1% 1% 90% 74% 20%
Life, Physical, and Social Science 104 0% 1% 98% 89% 62%
Community and Social Service 99 2% 2% 98% 82% 78%
Arts, Design, Entertainment, Sports, and Media 98 43% 19% 29% 32% 28%
Business and Financial Operations 88 4% 2% 69% 65% 10%
Protective Service 58 54% 3% 33% 13% 47%
Source: DEED Job Vacancy Survey

So the question becomes "How is Southeast Minnesota going to find workers to fill these vacancies?" One answer is to recruit from other states that border the Southeast region – Wisconsin and Iowa. As seen in Table 2, the counties bordering the east and south of EDR 10 already have workers commuting into the region from these two states. Winona and Houston Counties recruit 14.6 and 14.1 percent respectively from Wisconsin while Fillmore County draws in 5.7 percent of its workers from Iowa. Is it feasible to draw even more workers from these two states to fill the vacancies in the Southeast region?

Table 2: Commuting Patterns from Border States
County Jobs Approximate Percent Commuting from Wisconsin Approximate Percent Commuting from Iowa
Goodhue 20,033 12.1% N/A
Wabasha 7,130 11.3% N/A
Winona 26,973 14.6% 0.5%
Houston 5,874 14.1% 6.5%
Fillmore 6,293 1.7% 5.7%
Mower 16,754 N/A 5.0%
Freeborn 12,523 N/A 5.0%
Source: U.S. Census OnTheMap

The regional group Southeast Minnesota Together has already identified this as a plan of attack and has begun working to help better market the region and communities within it to help draw people in. The region has a lot to offer for workers of all ages, including, but not limited to, the big city life of Rochester which may be appealing to younger workers as well as more quiet rural areas which may be more alluring to older workers.

Marketing the region to try to bring in workers from other states is not the only thing employers can do to fill their openings. There are also more marginalized groups of individuals who could help ease the shortcoming that the region is facing, including trying to keep older workers on the job longer, hiring individuals with criminal backgrounds, drawing in younger workers, and hiring people with disabilities. There are many benefits to utilizing people that fall into one or more of these categories (see Table 3).

Table 3: Benefits of Hiring Individuals from Certain Groups
Group Benefits
Older Workers Brings Experience in the Field
High Scores in Leadership
Good Listeners
Writing Skills and Problem Solving
Source: AARP (www.aarp.org)
Ex-Offenders Tax Credit and Bonding*
Grateful, Engaged, and Loyal Worker
Transferable Training Learned While Incarcerated
Hard Working
Source: CAREERwise (careerwise.minnstate.edu), Business Insider (www.businessinsider.com), Beyond the Conviction (www.beyondtheconviction.org)
Youth Trainable and Teachable (not just the job skills but attitude, good work habits, and confidence)
Prompt and Respectful
Accept Lower Wages and Few Benefits
Source: New Hampshire Businesses for Social Responsibility (www.nhbsr.org)
People with Disabilities Tax Incentives
Low Turnover
Positive Attitude
Increased Productivity
Inspire Other Workers
Source: www.barrierfreecareers.net
* The Federal Bonding Program was developed by the U.S. Department of Labor in 1966 and provides Fidelity Bonds to employers who hire individuals with criminal backgrounds. These bonds provide protection against dishonesty for potential employees who may be considered "at-risk" by providing insurance, free of charge, which covers loss of money or property due to things such as employee theft, forgery, larceny and/or embezzlement. For more information visit www.bonds4jobs.com.

So, while the region is struggling to fill the vacancies it currently has, this is not a hopeless issue. Much can be done by employers, economic development agencies, and chambers of commerce to help alleviate the shortage of workers. The list of things that can be done includes recruiting from other states and hiring from sidelined groups of individuals such as older workers, ex-offenders, and younger workers.

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