Help wanted: South Dakota pays to lure workers

  • Article by: PAM LOUWAGIE
  • Star Tribune
  • August 18, 2012 - 7:17 PM

Dehab Isaac is packing up her apartment and moving her family this month from St. Paul to Sioux Falls, where she will start a new job as a network engineer for a bank.

Her new employer can thank the South Dakota government, which hired the recruiting firm that found Isaac and will pay half of the $5,000 fee it took to recruit her.

As the nation's jobless rate remains stubbornly high, now at 8.3 percent, the Mount Rushmore state has a problem most others can only envy: Too many job openings. So the state government there is making a bold and possibly unprecedented move by paying up to $5 million to a private recruiting firm to lure 1,000 workers.

Through the firm, the state aims to add 100 professionals each in engineering, finance and information technology, as well as 700 skilled manufacturing workers. They are recruiting health care workers and math and science teachers in other ways.

"Everything has been quite good here, but apparently people don't know that and are a little uncertain about moving here," said University of South Dakota business school dean Mike Keller. "Some people derisively call us the fly-over states. ... They think it's empty, I guess."

South Dakota has weathered the nation's economic storm better than many states in part because of its agriculture-fueled economy, business climate and smaller housing boom and bust, economists said.

South Dakota and its neighbors round out the country's top three lowest unemployment rates, with oil-booming North Dakota ranking first at 3.0 percent and Nebraska ranking second at 4.0 percent. South Dakota's is 4.4 percent. All three states are trying to lure workers in various ways -- the North Dakota government has hosted job fairs in Minnesota and elsewhere. Latest figures show Minnesota unemployment at 5.8 percent.

The idea for South Dakota to hire a recruiting firm grew out of a brainstorming session in Gov. Dennis Daugaard's office, according to one of his policy advisers, Kim Olson.

Business leaders around the state kept telling Daugaard that they were lacking the qualified workers. "He was hearing 'We're productive here. We want to grow more and we need more people in order to grow,' " she said.

So the state put the recruiting work out for bids and contracted with Wisconsin-based ManpowerGroup this spring. Their goal is to get the 1,000 workers in the state by spring of 2014. Every job opening is listed in South Dakota for a month first, so locals get first chance.

Selling South Dakota

ManpowerGroup is working hard to sell South Dakota.

"Are you ready to get moving toward a great career and enviable lifestyle?" its job listings say. "Your window of opportunity is wide open in South Dakota."

E-mailing and searching for candidates on LinkedIn and in its own database, the company is targeting prosperous areas in the region and depressed areas around the country, said Clinton Brown, permanent placement consultant for Experis in Sioux Falls, part of ManpowerGroup. "It sure seems like a lot of people don't realize that there's other places that have jobs. They think, because they watch all the national news, that there's no jobs anywhere," Brown said. When they tell them of the jobs in South Dakota, he said, "a lot of people don't believe it."

The firm has most success recruiting people with ties to the Upper Midwest, Brown said. "We definitely try to talk to, let's say, the guy that went to Iowa State University that now lives in Arizona and say, 'Hey, you know, have you thought about coming home?' "

The recruiters tout the lack of a state income tax, the low cost of living, high graduation rates and low crime. Some promote the state's agriculture and outdoors tourism, too, if they think it'll interest a potential employee. "We do ask them some personal behavioral questions, like trying to find out: Are they outdoorsmen? Are they hunters? ... Is our scenery going to match what they're interested in?" Brown said.

They also recruit in neighboring states that have taken some of their workers away. In North Dakota, for instance, many oil boom-related workers are earning high wages working long hours, but ManpowerGroup boasts that South Dakota jobs offer less burnout with more of a balanced lifestyle.

So far the state has forwarded 200 job openings to the recruiters, who have proposed more than 600 candidates. Sixty positions have been offered, accepted or filled, Olson said.

Mitchell-based Trail King, a semitrailer-truck manufacturing business, was one of the first companies to sign on with the effort in May and expects to fill 20 of 26 open positions by the end of the month.

One new employee came from Mississippi. Willard Hendry, 51, had never been to South Dakota before he got a call back about a painting job. He and his wife moved up about a month ago, he said, and they like the good wages, the open scenery and the friendly people.

"I am so impressed with ... everybody I have met in South Dakota. I have yet to meet a person that has a sour look on their face," he said. "I was in shock the first week I was up here. I told my wife ... 'Have we fell into one of them Dorothy and Toto deals and ... got left in a strange land?' "

Isaac, the computer network engineer, had never stepped foot in South Dakota when recruiters found her. Experis also found a job for her husband, so they and their children, ages 6 and 2, will be moving into an apartment in Sioux Falls soon.

She said that, when she went for the interview in Sioux Falls, "I fell in love with it, because it looks like a place you can raise your kids." Isaac added that she's happy it's just a four-hour drive from family in the Twin Cities.

Friendly state competition

The irony in South Dakota's worker shortage is not lost on some economic analysts. In past years, several Minnesota politicians feared publicly that South Dakota would steal businesses with a more favorable tax and regulatory climate.

Now that they're paying to find workers? "Means they must be desperate, I think. I don't know," said Mark Phillips, Minnesota's commissioner of Employment and Economic Development.

South Dakota may have jobs, but "I'm always tempted to make a quip about, 'Then you have to live in South Dakota,' " he said. "Quality of life is still one of the top site selection criteria for companies because they have to be able to attract employees, and you can do that in Minnesota because it's a great place to live. ... South Dakota is a nice place and everything, but I think we're a more desirable place."

Art Rolnick, former research director at the Federal Reserve Bank in Minneapolis, disagreed that "desperate" is the right word. Nationally, "we're matching unemployed workers to jobs," he said. "You go to the East Coast and West Coast and they hardly know those states exist, so they have to advertise."

Pam Louwagie • 612-673-7102

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