Unemployment rates in South Dakota have finally returned to pre-COVID levels, yet some businesses are still struggling to attract workers.
The latest statistics from the U.S. Department of Labor shows South Dakota unemployment rates have dipped back below 3%, down from its peak of 9.2% in April 2020.
Locally, the South Dakota Department of Labor and Regulation’s monthly report said, as of May, fewer than 300 eligible workers in Davison County are currently unemployed.
“With the demand the way it is, businesses are doing whatever they can to get some workers in,” said Devon Bartscher, manager of the South Dakota Department of Labor of Regulation’s Mitchell office.
In Bartscher’s conversations with area businesses, hiring bonuses have been a hot topic as of late.
“We’ve been chatting with some of the businesses in town and they’ve been having to get creative,” Bartscher said.
Low unemployment numbers, combined with wage competition and the sheer number of options available to job seekers, have created a “seller’s market” in South Dakota’s job market, according to Jason Schoolmeester, vice president of human resources for LifeScape.
LifeScape, a non-profit community service provider focusing on the health and wellbeing of people, is no exception to the state of the job market. They began offering hiring bonuses in Sioux Falls and Rapid City in an effort to entice workers to apply.
Unemployment numbers in both Minnehaha and Pennington Counties sit at or below 3%, but the organization is struggling to hire specialized employees.
“We do have a high degree of vacancies across the board, just like everybody else,” Schoolmeester said. “Skilled and qualified licensed professionals are in very high demand at the moment.”
Lifescape currently has 30 positions open at between each of their four locations in Sioux Falls, Rapid City and Sioux City, Iowa — some of which include hiring bonuses of up to $10,000.
Schoolmeester said the organization has previously relied upon its mission, values and current staff to draw in prospective employees, but that the pandemic shook things up.
“COVID has magnified our reliance on [hiring bonuses] and it seems to be — especially in the realm for licensed professionals — getting to be industry standard for certain positions at certain times,” Schoolmeester said. “Especially in the world of therapists, you may be looking for someone outside of the region.”
Most hiring bonuses come with additional stipulations. Whether that includes a required length of service, the signing of a contract or eventual repayment of the bonus is up to individual businesses. With LifeScape, the conditions of the bonus are intended to increase retention by giving employees a reason to stay, beyond simply enjoying their job.
“There are typically repayment agreements [with LifeScape],” Schoolmeester said. “So you have a little bit of skin in the game to look at this as a longer-term move.”
While a hiring bonus is surely a benefit, offering more benefits across the board typically leads to better employee retention.
“A hiring bonus alone isn't going to get you the best people and keep the best people,” Schoolmeester said. “They’re one component in the employer value proposition. That’s really the total package of what we offer to the employee, and that could include pay, benefits, work-life balance, schedules, and more.”
However, businesses need to be cautious of workers who only apply for the bonus, while also being mindful of those who find the job may not be the right fit.
“Things change for people, and that’s okay,” Schoolmeester said. “Fortunately, we haven’t had anyone try to game the system.
Many businesses and organizations across South Dakota are currently publicizing offers of hiring bonuses of varying amounts for specialized or daily support employees.
Enertech in Mitchell and Cargill in Emery are both offering hiring bonuses between $500 and $1,000 for entry-level positions. Prairie View Healthcare in Woonsocket and Avera in Pierre are offering bonuses between $1,000 and $2,000 for certified nursing assistants.
Trucking companies such as C.R. England, Metal Sales Manufacturing and more are offering bonuses between $5,000 and $10,000 for truck drivers who hold a Class A CDL license.
None of those companies returned requests for an interview.
“Most of the companies likely won’t speak publicly about their bonuses, because then the competition might know what they’re up to,” Bartscher said.
Bartscher added that offering hiring bonuses is just one of many tools that make for successful recruiting when unemployment numbers are low.
Increasing connections with students and non-English speakers, creating a more diverse workforce and retraining management are some of Bartscher’s suggestions for tapping into the remaining unemployed workforce.
"I think the companies I’ve seen that have the best success think outside the box,” Bartscher said.