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Pledge of 170 jobs starts at -21

The CHR Solutions building in northern Mitchell. (Sean Ryan/Republic)

 CHR Solutions Inc. has lost 21 jobs at its Mitchell facility since announcing last summer that it planned to add 170.

 The drop in jobs has happened despite the help of nearly $1 million in total assistance from state government and the local development corporation.

 As of April 30, 104 people were employed at CHR’s Mitchell office, according to Stan Victor, head of investor relations for the company. That’s down from the 125 people employed there last year when CHR announced plans to add 170 jobs in Mitchell over five years.

 Victor said the company still intends to make up the lost jobs and add 170 new jobs in the five-year time frame.

 “We’re committed to the number,” Victor said. “As soon as we can, we’re going to start ramping it up.”

 CHR, headquartered in Houston, Texas, provides engineering, information technology and business consulting services to rural telecommunication companies. CHR’s Mitchell facility is located at 1515 N. Sanborn Blvd.

 The company is nearly finished with an extensive upgrade of its data center at its Mitchell site, which will require additional support staff, Victor said, and has also obtained a significant amount of outsourcing work from telecom firms across the country.

 “We expect to be bringing a lot of those jobs into the Mitchell facility,” he said.

 The company also expects to add jobs by growing its bill printing operation in Mitchell, Victor said.

 Last summer, the company announced plans to grow its locations in Sioux Falls and Rapid City along with its Mitchell location. Since then, the company has gained four employees in Rapid City but has lost four employees in Sioux Falls, Victor said.

 CHR received a $997,000 incentive package from the South Dakota Governor’s Office of Economic Development and the Mitchell Area Development Corp. for agreeing to bring 170 new jobs to its Mitchell facility.

 Pat Costello, commissioner of the Governor’s Office of Economic Development, said the office provided CHR with two grants — a $500,000 technical assistance grant and a $310,000 workforce development grant. The first grant will be used to help offset the cost of new IT equipment for the company’s data center in Mitchell. The second will be used to help pay to train new employees.

 Both grants are paid out on a reimbursement basis, Costello said.

 “We don’t like to see any job loss within the state,” Costello said. “But, relatively speaking, it’s not a huge number.”

 Costello said he has been reassured that the company still intends to live up to the agreement.

 “They’re still committed to it,” he said, “and we’re still expecting the jobs to happen.”

 CHR has already spent a portion of the $500,000 grant to upgrade its data center in Mitchell but has yet to spend any of the $310,000 grant intended for employee training, Victor said.

 “We’re not in an aggressive training mode or hiring mode yet,” he said.

 MADC provided a $187,000 loan to CHR based on a rate of $1,100 per projected employee, according to Bryan Hisel, executive director of MADC.

 CHR will need to make up the lost jobs and add 170 new jobs in Mitchell before the end of the five-year time frame to fulfill its agreement with the state and MADC. If CHR does not create the jobs, it will owe money to MADC at the end of the fifth year.

 “That’s not an auspicious start to the first year of the agreement,” Hisel said. “On the other hand, that’s why we gave them a wide time frame.”

 The agreement also includes a provision to allow the state to recover money if the projected number of jobs is not reached, Costello said.

 Last year, CHR’s announcement of its plan to add 170 jobs in Mitchell came less than two months after Verifications Inc., a human-resources services company, announced it would be shutting down its operation in Mitchell. The closure put the company’s 79 employees in Mitchell out of work.

 CHR’s Mitchell location formerly housed Martin Group.

 That company was formed in 1971 as a consulting and engineering company specializing in telecommunications. Martin Group merged with CHR in September 2009.

 Martin Group, Hisel said, was the spark that led to the creation of a telecommunications industry in Mitchell. Other communication companies with offices in Mitchell now include Innovative Systems, Vantage Point Solutions and Larsen Data Communications.

 “We’re the communication technology hub for South Dakota,” Hisel said. “We made this agreement because we want them to be a major part of our future.”