Economic outlook remains strong for Montana, employers must continue to battle workforce shortage

Patrick Barkey, director of the Bureau of Business and Economic Research at the University of Montana, said the outlook for Montana is mostly positive in 2020. Thom Bridge/Independent Record, via Missoulian

By Katy Spence

For those who’ve lived through tough economic times, a workforce shortage can seem like a good problem.

“We have, incredibly, more job openings in the economy than we have unemployed workers in the US economy,” Pat Barkey, director of the Bureau of Business and Economic Research (BBER) out of the University of Montana told attendees gathered at the Missoula stop of the 2020 Economic Outlook Seminar (EOS) tour.

Aptly named “Finding Good Workers,” this year’s EOS tour is focusing on workforce challenges around Montana and across the nation. While challenging for employers, a tight labor market has been good for Montana workers: increased wages and benefits, better job security, low unemployment, and increased consumer spending are the earmarks of a thriving worker population. 

For Montana employers, however, fewer workers can mean slowdown in business growth. For five years, Montana tech companies have reported that a lack of skilled workers has been their top barrier to growth. Now it seems the trend is affecting other industries in the state, as well. 

The Montana Chamber of Commerce, in their recently-released statewide Workforce Development Study, found that the number one impediment all Montana businesses face in expanding total employment this year is a lack of available skilled workers. Seventy-two percent of businesses report that they were not satisfied with the availability of skilled workers in the state. 

 

Barkey said a number of factors could contribute to the tight labor market. A skill mismatch between available workers and open positions means that some potential employees are simply not qualified for the jobs that are open. An aging population makes it difficult to train for and fill senior-level positions, and points to the impending “Silver Tsunami” retirement of the populous Baby Boomer workers. Even a poor online reputation can discourage younger generations from pursuing a career with a company. 

Barkey suggested that employers need to better understand upcoming generations of workers who may operate differently from their predecessors. For example, he said, look at those born from 1996 – 2010, or Gen Z.

“Compared to millennials, they value job satisfaction more,” Barkey said. “They value college education more. A large fraction want to go to college. They value flexible hours.”

With each generation of workers bringing different values and skills into the workforce, employers must be adaptable and flexible to draw in and train the talent they need for their business. 

Barkey listed a number of other things companies can do to attract and retain workers. Reassessing what kind of benefits they offer can mean catering to each generation’s priorities. Younger generations value employers who help them pay for tuition and student loans, while older generations might place more value on traditional benefits like retirement accounts.

Upskilling existing workers and training employees in hard skills when they bring in the appropriate soft skills is another way employers can combat the tight labor market. Initiatives like All-In Missoula, a partnership between Cognizant ATG and Missoula College pay potential employees to learn consulting, systems analysis and design, data analytics, and more that could help them in a career at ATG. 

Businesses should also consider recruiting future workers, Barkey said.

“If I were running a construction company, I’d be worried about these survey results I just showed you,” he said. “I might start to think, you know, I better start teaching these 12-year-olds, 14-year-olds, that construction is a viable career.”

Barkey is not alone in looking for more connections between public schools and private companies to help train the future workforce. 

According to the Montana Chamber study, 80 percent of businesses agreed that school districts should be required to incorporate workforce readiness skills into their curriculum and 77 percent said that career advising in middle and high school needs to be strengthened.

Some programs like this already exist. On Feb. 10, the Missoula Area Chamber of Commerce will host its annual Workforce Connections event (previously called Career Pathways), designed to connect employers directly to high school teachers and career counselors. These educators want to know what businesses are looking for in potential future employees.

For the first year, BBER included tech among its lineup of industries, which includes agriculture, real estate, and health care. Alliance Executive Director Christina Henderson joins the BBER economists to tell the story of tech’s growth in Montana, and to echo that workforce challenges ring acutely for technology companies in the state.

The unique mix of advantages and challenges to doing business in Montana do draw a certain kind of individual, Henderson said.

“The kinds of people who live here and are drawn here tend to be hardworking, willing to tackle the risks,” Henderson said. “Those types of people shape our entrepreneurial ecosystem in ways that are beneficial to doing business.”

 

She highlighted Montana tech’s growth to more than $2 billion in annual revenue, as well as paying twice the median salary in the state. In each city, Henderson features local companies and shares entrepreneurship successes in their home communities.

The manufacturing industry reported a similar lack of skilled workers. Todd Morgan, Associate Director of BBER, reported that 64 percent of manufacturers reported that they were not getting enough qualified applicants for positions. Morgan said companies anticipate salary and/or benefits to be more of an issue in the coming years.

“Maybe thinking outside the box and things like flexible scheduling, providing childcare, providing on site housing, or providing some sort of commuting ability or support for employees is something manufacturers can look at,” Morgan said.

However, 97 percent of surveyed manufacturers reported that 2020 would be the same or better than 2019.

Despite challenges in attracting workforce, BBER has predicted positive things for Montana this year: general, continued growth, albeit at slower rates, for the state.

“It’s kind of a funny year for forecasting,” Barkey said. “ Forecasting is all about worrying about the future, and here we are showing up with a forecast where we’re saying everything is growing. … we’re optimistic.”

 

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The Alliance is working with a number of educational partners across the state to communicate our member needs and connect employers with educators to build better pipelines. Let us know if you want to join the conversation.

The BBER Economic Outlook series has four more stops on its 2020 Economic Outlook Tour: Kalispell on February 11, Havre on March 17, Lewistown on March 18, and Big Sky on March 19. Learn more and buy tickets on the website, and watch for invitations for MHTBA meetups in these communities the night before each seminar.

 


About the Author: Katy Spence is the Communications Director for the Montana High Tech Business Alliance. She worked previously with the Missoula Current and Treesource, and has an Environmental Journalism Master’s Degree from the University of Montana.

About the Publisher: Launched in 2014, the Montana High Tech Business Alliance is a nonpartisan nonprofit association of highly-engaged high tech and manufacturing companies and affiliates creating high-paying jobs in Montana. For more information, visit MTHighTech.org or subscribe to our biweekly newsletter.

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