Five Montana Business Trends for 2016
At the Montana High Tech Business Alliance the stories we’re excited to tell in 2016 – about the state of the industry, high-growth companies, and scores of new employees hired - all point to a state on the rise. Here’s a sneak peek at five positive trends I see in the year ahead for Montana businesses.
1. More women in high tech and manufacturing.
While women represent nearly half of the total U.S. labor force, they only make up around one third of the workforce in tech and one quarter of the workforce in manufacturing. These are industries that face an exploding demand for talent and need more women to join the ranks. Montana employers and educators are ramping up their efforts to attract, retain, and advance talented women in high tech and manufacturing jobs. Here’s a sampling of exciting recent developments:
The top graduates from the inaugural class of the Montana Code School in Missoula were young women. Who had multiple job offers in Montana.
Growing tech firms like Workiva in Bozeman and Missoula and SoFi in Helena are actively looking to hire more female programmers.
The number of female engineering faculty members at Montana State University is the highest ever in university history.
40 percent of the computer science faculty at Montana Tech in Butte are women, including the current department head.
The University of Montana’s Blackstone LaunchPad received a $25,000 grant from the Kauffman Foundation in December to study ways Montana can increase women’s participation in entrepreneurship. The award comes on the heels of the launch of UM’s Pursue Your Passions program to encourage more women (and men) to launch new ventures with mentoring and support.
Bozeman marketing technology firm Elixiter was named one of Fortune’s 100 Best Workplaces for Women in 2015 and just expanded to a new office this year.
In Lewistown, Tom Spika, CEO of Spika Design and Manufacturing, is countering the false assumption that manufacturing work is unfit for women by offering Manufacturing 101 workshops to give newcomers a chance to try out an engaging, well-paid career. Tom’s daughters, Katie Spika and Bekhi Spika, are COO and Marketing Director of the company.
2. More high-paying Montana jobs.
As technology increasingly allows employees to work from anywhere and stay connected, more out-of-state tech firms are willing to go where the talent is and locate offices in Montana. Recent examples include rising SaaS companies like Workiva (Bozeman and Missoula) and Helix Business Solutions (Dillon and Bozeman), tech consulting firms like Advanced Technology Group (Missoula), and fintech powerhouse SoFi (Helena). Software giant Oracle recently broke ground on a new operations center that will bring more tech jobs to Bozeman.
Companies headquartered in Montana like Elixiter (Bozeman), PFL.com (Livingston and Bozeman) and EDULOG (Missoula) are also expanding rapidly and hiring accordingly. In 2015, SoFi expanded to bigger offices in Helena and announced plans to double its development team to 100 people. Imagine the impact on the workforce in a city of around 30,000 people when a new employer hires 100 computer programmers in two years in a state that doesn’t graduate half that many computer science majors in a given year.
The Alliance’s 2015 survey conducted by the University of Montana Bureau of Business and Economic Research found Montana high tech and manufacturing firms are growing eight to ten times the rate of the overall state economy and pay an average of about $50,000 – twice the median wage. This industry now makes up 15 percent of the state economy. Results from our 2016 survey will be released in February. The Alliance doubled our membership this year, so twice as many companies took the survey. I expect the upward trends to continue. Montanans who left the state for greener pastures in Silicon Valley or Seattle will be scanning sites like the Alliance’s high tech jobs portal in hope of a chance to come home. As of this writing, there are 99 open positions on MTHighTech.org/jobs with new ones added every week. Job seekers can subscribe for weekly email updates.
This week alone school bus routing software company EDULOG posted 15+ jobs in our portal. When I visited college classes in 2014 and 2015 to give presentations about a dozen growing Montana companies with available jobs, students had typically only heard of two or three on the list. With some big names like Oracle, students were often familiar with the company but didn’t know the firm had a presence in Montana. Top Seniors were intrigued by the options, but had already accepted job offers out of state. As word spreads through the Alliance’s outreach and peer-to-peer conversations among students, college Freshmen and Sophomores will seek internships in Montana and build relationships with in-state companies. Unlike past generations of Montana graduates, they will no longer assume they have to leave the state to find a good job.
3. Fierce competition for talent.
Well-funded tech firms are aggressive about hiring the best people. They send their top managers to Montana campuses to cherry pick graduates from the top of the class. They build elaborate recruiting and training programs to develop and retain their best talent. They make sure their compensation is regionally, even nationally, competitive. Montana salaries at some companies can range from $50,000-$75,000 with senior people earning more than $100,000. When RightNow Technologies sold to Oracle in 2011, the average wage was $86,000.
Fancy offices, free food, happy hours and bonuses are common perks. As employment in this sector grows, many established organizations used to hiring great Montana workers for “very reasonable” wages will be blindsided by the coming war for talent. This trend could prove particularly disruptive to small companies with low turnover because they’re less likely to see the changes in the job market until late in the game. They may also be less able to afford big salaries and benefits. Montana employers will suddenly find their old playbook for hiring doesn’t work any more, particularly for high-skilled positions like computer programmers and upper management.
They will be surprised when their best people leave. They will wonder why the resume pool suddenly got shallow for jobs that used to attract lots of interest. They will be shocked when their “very good” offers get rejected and the best candidates flock to the hot new companies. It has already started. It will only increase. One of the best benefits I’ve seen for members of the Montana High Tech Business Alliance is the opportunity for owners and top managers to network with their peers across the state. Employers share their salary ranges and hiring strategies with one another and learn pretty quickly whether their practices are aligned with the market.
4. A more empowered workforce.
The Alliance doesn’t shy away from the sad statistic that Montana is 49th in the country for wages. In fact, changing this data point is what drives me to jump out of bed and do my job each day. Montana workers are highly educated and highly engaged, but not highly paid. Based on countless conversations with economists in the state, this is due to a number of complex factors that are difficult to explain.
My own theory is that Montana employers have paid low wages because they could. The supply of workers who want to live in Montana, often for reasons related to lifestyle and family, has historically been greater than the demand for labor. Job seekers have accepted lower pay and benefits because that was the best offer they could get. In many cases, Montana workers have stayed in positions longer than they should have because they felt they couldn’t find an equivalent or better job elsewhere in the state. Sometimes star employees don’t know their own value because they get used to being underpaid. This is changing. I see increased competition for talent shifting the balance of power in favor of skilled Montana workers and higher wages.
New college grads and mid-career professionals are finding more opportunities in Montana, and more freedom to leave “safe” jobs for something better. Many pursue entrepreneurship as a career path, making Montana the number one state for startup activity three years running. Workers have better options, and they are expecting more from employers.
5. Brilliant free agents launching new ventures.
This is perhaps a small trend, but an important one. A lot of smart people at the top of the workforce food chain – think PhD research scientists at national labs and high-profile software executives – left their big jobs last year and are still in Montana. Some are starting their own companies, others are investing their money and expertise in other entrepreneurs’ startups. Watch for these men and women to be a quiet engine of economic growth. I for one can’t wait to see what they’re up to.
