Help (still) wanted

Labor crunch continues to challenge employers

A year ago, some Flathead Valley employers were just beginning to realize the growing challenge of finding workers to run their businesses.

And they weren't alone. It is a dynamic that exists from one economically robust county to the next in Montana, from one state to the next. It is a trend that now is developing around the world.

"The problem is that the labor shortage isn't unique to the valley. It is global," said Gregg Davis, economics professor at Flathead Valley Community College and director of the Center for Business Information and Research.

The baby-boom generation is gradually retiring worldwide and "there aren't enough young workers to replace us in producing goods and services," Davis said. "I think Montana is going to have to increasingly rely on out-of-state labor. The problem is that we are going to be competing with other states."

That competition is well under way.

While "help wanted" signs have been decorating business fronts for the last few years, many Flathead Valley employers have only recently kicked into high gear in a scramble for workers.

"We know wages have gone up in the valley," said Davis, who asserted a year ago that the labor crunch had caught many employers by surprise, after years of viewing minimum wage as a staple in local economics.

"Our wages have increased, but so, too, have wages everywhere else. The question is if the gap is closing [between wages in the Flathead and elsewhere]. If the gap isn't changing, it really isn't going to help."

Davis moved to the Flathead 15 years ago, and for the first eight years he said there was an obvious labor surplus, with the unemployment rate hovering between 6 and 8 percent.

"I had lots of students working minimum wage," he said. "Now it's hard to find a student who is working for minimum wage. The dynamic has changed really, really fast."

FLATHEAD County's unemployment rate dropped from 5.5 percent in 2003 to 2.7 percent in August 2006. Now it is at an unprecedented 2.2 percent, said Bill Nelson, manager of the Flathead Job Service in Kalispell.

"There's not a lot of unemployed people out there when you are talking about a 2.2 percent employment rate," Nelson said. "It's considered full employment at about 4 percent, so that tells you a lot."

But it's also telling that Flathead County doesn't have the lowest rate in the state: That title belongs to Gallatin County with 1.4 percent unemployment.

The situation has created a growing awareness that the market favors employee choice over employer choice in some cases. Employees are becoming more likely to hop from one job to the next, especially in entry-level jobs, to find better pay, scheduling and benefits, Nelson said.

"There's a fair amount of that," Nelson said. "And there is employee thievery. They'll slip workers their business card and say give me a call. We've heard stories about it."

AS THE valley's second-largest employer with 1,250 workers, Plum Creek Timber Co. has ramped up its efforts to recruit and retain workers. Rather than simply raising wages, the company has crafted a hiring focus that emphasizes careers over temporary jobs.

"The last thing we want to get into is a competition for workers simply based on price," said Henry Brown, the company's human resources director. "What we try to focus on … is the overall career opportunities at Plum Creek. That's our biggest selling point. Plum Creek prides itself on not just offering someone a job, but offering them a career."

Besides emphasizing opportunities for advancement within the company, Plum Creek has adjusted wages and benefits to be competitive in hiring.

About 18 months ago, the company bumped its entry-level wage from $11.50 an hour to $14.24. It also offers a benefits package including medical/dental insurance, retirement contribution and vacation.

Most recently, Plum Creek has beefed up its recruiting program, hiring an additional recruiter and increasing advertising for open positions.

"The market is very tough out there," Brown said. "People are struggling to find qualified people to place in many of these jobs in the valley."

THE LOCAL McDonald's franchise has taken a similar approach, boosting radio and newspaper advertising for recruits and holding its first-ever job fair, largely to conjure up around 40 employees for a new location on U.S. 93 near Costco.

"We don't think it's going to be easy, but just because of the fact that it's a new location, that in itself will bring in people," said Scott Hadwin, who already manages a work force of nearly 200 people at four McDonald's locations.

The company has been training management for the new location for the last year, and the job fair on Monday was intended to fill out the ranks. "Anyone who comes in for an interview gets a free meal," Hadwin said.

Part of the focus of the job was to explain what the franchise has to offer, which is more than it offered just a few years ago.

There are a variety of benefits aimed at attracting young workers: free meals when working and 50 percent discounts for off-shift purchases; bonus pay for good grades and attendance at school and work; health and dental insurance; a potential for college scholarships; a resource line to help workers with everything from homework to credit counseling to legal advice; and a rapid pay raise schedule.

The starting wage, now at $7.25 an hour, can rise to $7.75 within just a few weeks, Hadwin said.

There was a period when McDonald's jobs kind of lost their cachet, Hadwin said.

"But we are trending back to being an employer of choice. I see that changing and I'm encouraged."

A turnaround that attracts workers couldn't have come at a better time.

At the national level, Hadwin said, McDonald's is forecasting 2008 to be the tightest year in the company's history for recruiting workers.

But Hadwin considers Flathead County's 2.2 percent unemployment rate and the possibility that the local worker shortage may be ahead of national trends.

"The employees have always been our biggest resource," he said. "I believe we've always done well [recruiting], but we've really focused in the last year to do it better. And I think that will make a big difference."

A KEY pursuit for employers is retaining good workers and the Job Service and the Kalispell Chamber of Commerce are among the organizations encouraging those efforts.

"Once you get an employee, do what you can to keep them," Nelson said. "It's about being an employer of choice and retaining the good you do have. It really is a focus for us."

An "employer of choice" delivers benefits that transcend pay - for example, flexible schedules that meet an employee's needs.

The valley's largest employer, Northwest Healthcare (parent company of Kalispell Regional Medical Center), has gone to greater lengths, offering benefits such as discounted access to The Summit fitness center and Kid Kare, a day-care service for employees and their children.

Those benefits, among others, have been helpful in recruiting and retaining employees, according to the hospital's human resources department.

The Kalispell Chamber has established a Work Force Focus Group where innovative approaches for recruiting and retaining workers are discussed. Among the considerations is a day-care service supported by a pool of workers. A recent chamber luncheon focused on the issue of work-force housing.

While the federal government has recently reported continued strong job growth, therein lies a Catch 22 - a relentless long-term growth in the national economy has translated into more and more jobs to be filled by a shrinking work force.

Davis and other economists predict it will be a force to be reckoned with for years to come.

Reporter Jim Mann may be reached at 758-4407 or by e-mail at jmann@dailyinterlake.com