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Workforce issues are top concerns for Rochester businesses going into 2022

The results of a recent survey of local businesses found that the top challenge for 2021 and the top concerns about 2022 are hiring, employee costs and employee retention.

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During the Rochester Area Chamber of Commerce’s 2021 Economic Summit on Dec. 2, the results of a recent survey of local businesses found that the top challenge for 2021 and the top concerns about 2022 are hiring, employee costs and employee retention. While the pandemic exacerbated the labor shortage, experts from the University of Minnesota Extension and local business panelists all commented that the workforce issues started long before anyone had heard of COVID-19. Senior Economic Impact Analyst Bridget Tuck told the crowd at the summit that southeast Minnesota had 21,000 job openings in the third quarter and only 11,000 job seekers.

A lot of issues are worrying Rochester area business owners as the pandemic-plagued 2021 grinds to its end, but their top concerns are all about workforce.

During the Rochester Area Chamber of Commerce’s 2021 Economic Summit on Dec. 2, the results of a recent survey of local businesses found that the top challenge for 2021 and the top concerns about 2022 are hiring, employee costs and employee retention.

Overall, the survey found area businesses evenly split on their outlook on 2022 with 46 percent reporting being optimistic and 46 percent concerned about the coming year. The rest of the responses -- 8 percent -- were neutral about what is coming next.

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While the conference covered many other topics like supply chain issues, talk kept coming back to workforce problems.

While the pandemic exacerbated the labor shortage, experts from the University of Minnesota Extension and local business panelists all commented that the workforce issues started long before anyone had heard of COVID-19.

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Senior economic impact analyst Bridget Tuck told the crowd at the summit that southeast Minnesota had 21,000 job openings in the third quarter and only 11,000 job seekers.

“So we knew this was coming … If you were listening to the state demographer and the state economist about 10 to 15 years ago, they were talking about the fact that Minnesota was going to get to the point where we had more people retiring from the labor force than we had coming in. Our labor force role, in general, is very low in the state of Minnesota,” said Tuck. “What happened in southeast Minnesota was we saw sustained growth since the Great Recession. So we get to 2018 and all of a sudden we have more job vacancies than we have people looking for work…Then along comes COVID.”

One sector that is feeling the impact of a shortage of employees as well as struggling to keep the ones they have is health care. Mayo Clinic’s chair of strategic intelligence Adam Brase commented during the industry panel discussion that it is a growing problem, but it is one they anticipated. He participated in the industry panel discussion moderated by Chamber President Ryan Parsons.

“It's important to remember that the workforce challenges in healthcare didn't start 18 months ago when the pandemic started… We've heard more recently about the Great Resignation and millions of people leaving their jobs, but the workforce challenges in healthcare started years ago,” he said. “It's a supply and demand issue, right? It's an industry that is growing, because there are more and more medical needs as people get older. And at the same time, we have fewer people going into the profession. And that's created a lot of challenges.”

To address those challenges, Mayo Clinic has deepened its partnerships with area universities as well as high school STEM programs to encourage young people to become employees.

That’s an approach that construction firms like Krause-Anderson are also using to train and attract new workers.

“I think in the construction industry, labor shortages have been a topic since well before I started in this profession…. The aging workforce is not being replaced as fast as it needs to,” said Andy Johnson of Kraus-Anderson. “We're working with local organizations and bringing in high schoolers ... take them off to a site and try to intrigue them a little bit. We want to get them exposed and start to set the groundwork for training them to hopefully make construction a lifelong profession for them.”

Beside finding employees, retaining them is also an issue that is causing managers to lose sleep. The costs of labor are on the rise with the increase of minimum wage and pressures related to the pandemic.

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Scott Eggert, the general manager of Broadway Plaza, said you need to give employees a reason to stay.

“We're changing that ideology of hospitality… We try to attract by actually paying for it, and giving them an opportunity to see a path to retirement in our industry by offering 401ks and other retirement avenues. Anybody that works in the hospitality industry knows housekeeping is the hardest job in development. It's really difficult to be able to do and it causes a lot of hurt on their bodies over years. We want them to be able to retire and have enough money in their account to be able to live comfortably,” he said. “We're working very hard towards changing the thought process to the idea that this is a profession.”

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