Help wanted in Mitchell
South Dakota is poised to be on "the leading edge of a national workforce issue," according to a local development expert.
South Dakota's businesses, including those in Mitchell and the surrounding area, have been routinely hindered in recent years by a shortage of skilled workers, a shortage most apparent within the manufacturing industry.
"It is the top priority we're working on right now in economic development," said Bryan Hisel, executive director of the Mitchell Area Chamber of Commerce and Mitchell Area Development Corp., referring to the workforce shortage.
Trail King President Bruce Yakley has seen his company consistently struggle to fill skilled positions, such as welders, needed to keep up with demand for its products. Yakley, who started at Trail King in March 2011, said he knew within two months that workforce was going to be an issue.
"The experience has been frustrating, to say the least," Yakley said in an interview this week with The Daily Republic.
The trailer manufacturer, with locations in Mitchell and West Fargo, N.D., cut nearly two-thirds of its workforce during the recession. When the company looked to expand in a burgeoning economy in 2012, the workers weren't available.
"We lost a lot of business because we couldn't ramp up fast enough," Yakley said.
The company's Mitchell plant currently employs approximately 550 people, up at least 30 employees from last year, according to Yakley.
Trail King is still looking to expand, but to meet its goals the company will have to hire as many as 200 skilled laborers in the next five years, Yakley said.
"We are definitely still in need of workers."
As a large number of baby boomers start to retire during the next decade, the region's workforce issue will only become more widespread, both in geographic scope and the types of industries that are affected, Hisel said.
"There aren't enough younger members of the population to fill those jobs," he said. "That's the long-term problem."
The first Mitchell Community Job Fair will be from 4:30 p.m. 7 p.m. Thursday at Mitchell Technical Institute, where 36 employers from Mitchell and the surrounding area will meet prospective employees. The event is organized by the Mitchell Area Chamber of Commerce, the Mitchell School District and the South Dakota Department of Labor and Regulation.
Trail King plans to take part in the job fair and Yakley said the chance to interact with potential employees won't be taken for granted.
"Every single person is important," he said. "If we can meet some good people and let them know the opportunities our company has, we will."
Numbers improve, problem persists
The numbers seem to indicate a modest improvement in the size of the region's workforce during the last year.
Mitchell has added as many as 1,120 jobs since 2009, when the city's total employment fell as low as 8,010 and the unemployment rate peaked at 7.4 percent, according to the state Department of Labor and Regulation. In July, the city's job count reached 9,135 and the total available labor force reached 9,410, the highest totals since at least 2006, when the department began tracking employment statistics at the city level.
The city's total employment fluctuates from summer to winter, as the number of seasonal jobs in the tourism and construction industries start to vanish.
Total employment in Mitchell was 8,860 in December, the last month for which data is available. That's 260 more jobs than in December 2012 and 850 more than in December 2009.
The city's total labor force also increased last year, from 8,805 in January 2013 to 9,125 in December.
The number of people employed in Davison County, of which Mitchell is the county seat, also went up last year, from 10,820 in January 2013 to 11,385 in December. In July, the county's total employment climbed to 11,735, the highest total since at least 1990.
South Dakota's total civilian labor force slumped to 445,200 in December, down from 449,600 in November. Still, the December total is up about 3,500 from the same month in 2012.
"We're going to have short term ups and downs in our number of jobs," Hisel said. "The local economy and national economy are going to go up and down within a range."
Many businesses, like Trail King, were left shorthanded as they looked to expand in the improving economy after the recession.
"Everybody was in high demand to recover from the recession," Hisel said. "We're at a peak point right now."
Employers are hard-pressed to notice any improvement in the size of the region's workforce.
"Recruitment is a very high priority," said LaRue Steffes, human resources manager at Twin City Fan in Mitchell. "Some weeks are good. Some weeks aren't so good."
Several businesses in Mitchell are all competing for the same types of employees, mainly skilled positions, Steffes said.
"It's good to be a worker right now," she said.
The non-seasonally adjusted unemployment rate (the only rate provided for cities) in Mitchell dropped to 2.9 percent in July. That was the first time the city's unemployment rate fell to less than 3 percent since November 2008. As of December, the city's unemployment rate was still less than 3 percent.
The comparable, non-seasonally adjusted unemployment rate for all of South Dakota was 3.6 percent in December, down from 4.5 percent in 2012, according to the U.S. Bureau of Labor Statistics. That's the third lowest unemployment rate in the nation for the month, behind only North Dakota, where the rate was 2.7 percent, and Nebraska, where the rate was 3.5 percent.
The employment rate may as well be zero as far as employers are concerned, Yakley said.
"If people want a job, they can get a job in this region," he said. "It's just tough finding good, quality help."
Solving the issue
Greg Von Wald, president of Mitchell Technical Institute, said his school aims to provide students with training to suit the demands of the various industries in need of skilled workers.
"We adjust our programming to fit the needs of the industry," he said. "That's what we do."
As awareness of the workforce problem grows, there will be more of a value placed on the type of education provided by institutions such as MTI, Von Wald said.
"We are an integral part of solving the workforce issue for our region and the state," he said.
In an effort to train workers locally, Trail King provided nine welding students at MTI with partial scholarships, Yakley said. In exchange, those students have agreed to work for Trail King for a period of time after they graduate.
"We think it's a good deal," Yakley said.
If a solution for the workforce shortage isn't found, businesses will be unable to expand in Mitchell, or elsewhere in South Dakota, Hisel said. It's a consequence that has already started to surface.
Dan Roth, operations manager at Twin City Fan, said the workforce shortage has forced the company, which has four manufacturing facilities in South Dakota and is headquartered in Minneapolis, to look to grow elsewhere.
"We're unable to expand in communities like Mitchell, based on workforce availability," Roth said.
It won't be an easy fix, Hisel said, but a growing awareness of the problem has prompted action locally and across the state.
In an interview last month with The Daily Republic's editorial board at the newspaper's office in Mitchell, Gov. Dennis Daugaard said he is aware of the issue and his office is working on a plan to hold several workforce summits around the state in the near future.
"You can go to the people on the ground and get together and talk about it, and learn a lot," Daugaard said.
Training people who already live in South Dakota to fill these positions will be critical in solving the problem, Daugaard said, but so will attracting workers from outside the state, especially in the short term.
"We can't abandon recruitment as a tool," he said. "We don't have the critical mass of people, but we've got employers who would like to add employees."
Yakley agreed that convincing people to come to South Dakota for employment will be essential if employers want to keep growing their businesses in the state.
"Why be unemployed somewhere else, when you can live in a city like Mitchell and have a good paying job?" he said.
Improving the region's quality of life will also be important in attracting and retaining workers, Hisel said, as will maintaining availability of affordable housing.
"There are a lot of pieces that you don't naturally connect to workforce," Hisel said.
With at least six either recently completed or ongoing apartment and housing projects in Mitchell, Hisel said more people could move to the city for employment. The housing projects are the result of a recent study that identified a need for more housing in the city, which Hisel said was done with the aim of growing the region's workforce.
A long-term solution to the state's workforce shortage won't come from just one source -- it will require cooperation from local communities and state government, Yakley said.
"We need to work as a region on this problem," he said.