Skilled labor remains big issue for Minnesota employers

Aaron Benike needs journeyman carpenters and project managers in his commercial construction business in Rochester. Loren Nelson needs welders and computerized machine controllers in his equipment manufacturing shop in Braham.

Neither man's business lacks for work. Instead, they lack for workforce.

Workforce development has bedeviled Minnesota for roughly a decade, partly because of an aging baby boom population that produces so many retirees that the labor pool struggles to replace. But well beyond demographics, a mismatch persists between good jobs and available applicants. Federal and state programs and millions of dollars have not yet solved the problem and may not do so for a long time.

"The reality in Minnesota is that there are not enough bodies to go around," said Nelson, a member of the Governor's Workforce Development Board. The board includes leaders from the business, labor, education and government sectors, as well as community groups. It advises the governor on strategies to improve the state's labor pool.

Despite multiple workforce development initiatives, skilled craft jobs in Minnesota remain hard to fill, a new survey shows.

Roughly 92% of private Minnesota employers who participated in a national poll conducted by Associated General Contractors (AGC) reported difficulty filling some or all salaried and hourly craft positions. The figure was well above the national average of 80%.

Nearly half the 24 survey participants believe it will become even harder to hire over the coming 12 months.

Minnesota's construction industry grew 20% from 2014 to 2018, said Sean O'Neil, a workforce development coordinator with the Minnesota Chamber of Commerce. From 2013 to 2017, the latest numbers available, the state's labor force grew just 2.8%.

"The math and demographics have been there; we saw this coming," said Benike, whose fourth-generation family building firm employs around 200 people. It grosses about $60 million a year erecting churches, schools, hospitals and manufacturing facilities.

Benike's hiring problems mirror many of those mentioned in the AGC survey. He relies on skilled craft feeder programs from Workforce Development Inc., a nonprofit that matches private needs to public programs. He also uses union apprenticeship programs. But Benike can only handle so many apprentices if he wants to get his business done on time and on budget.

"We need experienced field leadership," he said. "My best people are retiring."

The shallow talent pool extends to manufacturers and other businesses in need of skilled craftsmen, University of Minnesota economist Aaron Sojourner said.

Nelson employs 75 people at Aurelius Manufacturing Co. in Braham, making parts for railroad maintenance, agricultural and construction equipment.

"It's frustrating," said Nelson, who does about $10 million in business per year. "We build hydraulic cylinders. We need welders and computer numerical control operators. We would ship more product if we had more people."

The state now has 140,000 unfilled jobs of all kinds, said Steve Grove, commissioner of Minnesota's Department of Employment and Economic Development (DEED). Grove said that among the state's various workforce development programs, the most effective have been those that "tightly partner with a business from the beginning."

DEED development programs are generally worker driven. But Grove says his goal is to "make business the primary customer," because that ultimately benefits job seekers.

Another issue, according to Grove, is that the state's worker base is growing primarily from communities of color. He has asked his agency to find ways of drawing in and training minority groups.

"Construction is a great place for people new to the country to get jobs and get ahead," he said. Minnesota "needs to be the most welcoming place for immigrants."

The new AGC survey calls into question the effectiveness of existing programs meant to train skilled craft workers of all backgrounds. Minnesota businesses responding said roughly four in 10 "craft personnel" coming out of local pipeline programs were poorly trained. Roughly half had only a "fair" level of training, survey respondents said.

Programs pairing technical schools with specific employers seem to work, employers and state officials agree, especially when those businesses provide the schools with the kinds of machines on which graduates will work.

"A guarantee of employment is also critical," said Kent Olson, a professor of applied economics at the U.

However, on-the-job training plays a big role for logistical and financial reasons. At Aurelius Manufacturing, Nelson pulls workers off the floor and pays them to sit in front of a 50-inch television set to learn advanced skills from an instructor at a remote site. He favors training in bite-sized bits — "stackable skills," he calls them — that let students succeed in small ways that build on each other as employees demonstrate more sophisticated levels of competence and certification.

"I'm buying machines that help one guy do the work of two because I only have one guy."

Automation will reduce the need for a certain number of skilled craft workers, but it will not eliminate the need for all of them in the near future.

"We have a talent crisis," said Burnsville Mayor Elizabeth Kautz. It is a question of culture as well as public policy, she added.

Kautz oversees a city whose high school has piloted some of the state's most aggressive promotion of technical and vocational education. That includes an auto mechanic curriculum paired with a local car dealership.

Burnsville High School wants "to address children's passion," Kautz said.

"People with a technical education," Kautz said, "can come out with a job that pays $60,000 to $70,000 a year with no debt."

Jim Spencer • 202-662-7432