Montana worker shortage starts to pinch state’s employers

By Erin Loranger Helena Independent Record

HELENA (AP) – When Denice Harris started working at AAA, she had to wear nylons and men were required to wear ties. Now struggling to recruit employees, AAA is doing everything from allowing jeans to being flexible on the required qualifications for some positions.

Montana is facing a workforce shortage that will put the unemployment rate below 2 percent by 2025, according to predictions by the Montana Department of Labor and Industry.

While DLI is trying to minimize harm to the state’s economy by encouraging apprenticeships and getting businesses to be more competitive with wages and work schedules, Commissioner Pam Bucy said it’s not enough to offset the shortage, the Helena Independent Record reported Sunday.

Statistics provided by DLI say Montana’s population of those 65 and older is expected to grow by approximately 7,000 people each year, while the typical working age population, people aged 16 to 64, is projected to grow by only 475 people each year.

“We do not have enough human beings,” Bucy said.

Businesses are starting to see symptoms of a workforce shortage and how it can impede growth. Bucy said she thinks it will encourage employers to be more aggressive in recruiting employees and getting creative to appeal to young people entering the workforce.

While a dress code might seem like it wouldn’t be a big deal to potential employees, a shortage of people means applicants can be picky when choosing an employer, which forces businesses to be more accommodating.

AAA is also following recommendations the Department of Labor said are proven to improve employee efficiency and prevent high turnover rates. The company updated policies on short-term disability and maternity leave and offers part-time work and flexible schedules.

Harris, the vice president of Brand and Membership at AAA in Helena, said she thinks there’s several factors that make it particularly difficult to find employees. Since Helena isn’t a traditional college town, there aren’t as many graduates looking for an entry-level position like the insurance and other sales jobs for which AAA is almost constantly hiring.

When they do graduate from the flagship universities, Harris said it’s difficult to sell someone on moving to a smaller town. If they are looking for work in Helena, young people entering the workforce are less likely to want a job in sales, she said.

“We’re noticing that millennials don’t like to sell. They look at it as slimy,” she said.

All of the positions at AAA ask for at least a two or four year degree, and higher level positions require a master’s degree. Harris said they’ve been more willing to forego the education requirements in sales jobs if people demonstrate they can interact with clients.

Harris said low wages also keep people from taking a position or from staying long. Although AAA has increased pay over the last few years, she said applicants often say it’s not enough.

“We’ve increased our wages so that we can be competitive,” Harris said. “I’m sure there’s people out there who think we’re not.”

Wage growth has increased in Montana over the last six years, but the state is still 20 years behind, Bucy said. Because there has always been an influx of workers, Bucy said employers have gotten away with paying people less because there was a pool of people looking for work. But that’s quickly changing.

“If you can’t get people,” Bucy said, “you have to wonder if you’re paying enough.”

Some state legislators have been advocating for a minimum wage increase for numerous sessions, but lobbyists concerned the increase would put too much of a burden on small businesses have effectively killed the legislation each time. A bill this session to raise the minimum wage to $10.10 died in committee.

Bucy said the minimum wage conversation often results in state leaders saying the first priority should be to keep graduates from leaving the state for work. But it’s a misconception that the majority of educated people leave the state when it’s time to enter the workforce, she said.

About 74 percent of two- and four-year college graduates are working in the state five years after they graduate. Montana does lose a higher portion of graduates with master’s and doctorate degrees, however.

“That absolutely has a lot to do with wages,” she said.

Bucy said there is good data on cases where improving the minimum wage can both help and hurt businesses.

“This is a tough catch 22,” she said.

The state is working on providing tax incentives to employers to offer apprenticeships. More people can stay in the workforce while getting trained, instead of leaving for several years for schooling.

Gov. Steve Bullock recently signed legislation to provide Montana businesses with a tax credit of $750 for every employee hired and offered training through the Montana Registered Apprenticeship unit. Businesses will receive a $1,500 credit for each veteran they hire.

He also signed a bill giving local governments the option to waive up to 75 percent of a new or growing businesses’ equipment tax for the first five years. Ideally, the cost savings will allow businesses to increase wages.

DLI also encourages businesses to get creative with recruitment strategies.

Now employees are looking for meaningful jobs, especially if they’re millennials, Bucy said. Instead of only talking about job qualifications and duties in descriptions, the state is crafting their government job descriptions to talk about responsibilities and potential impact an employee will have. Bucy said it’s made a difference, and DLI now encourages other businesses to rewrite their own job descriptions.

Other strategies, such as offering flexible hours for people who want to work part-time, increases the pool of people applying for jobs and minimizes turnover.

Bucy said she recently had a conversation with an in-home health care provider who found lasting employees by offering flexible schedules and advertising at ski areas.

“They marketed their flexible schedules to outdoor people,” she said. “Businesses are required to be much more creative.”