Workforce is Hot Issue at Luncheon

By: Clay Schuldt – New Ulm Journal

New Ulm, MN – Workforce development struggles and solutions were the hot topics at Friday’s Chamber of Commerce Hot Topic Luncheon.

The event featured presentations from Region 9 Economic Development Director Kristian Braekkan, who gave an overview analysis of the workforce issues facing the nine-county region of Brown, Watonwan, Martin, Sibley, Nicollet, Blue Earth, Faribault, Le Sueur and Waseca.

He opened the presentation by asking, “What is an economy?”

Braekkan said often people think of the local economy as on the periphery of the global economy, but he argued local economy was at the center of the global economy.

“That’s the only way to address these issues we’re dealing with here in terms of maintaining and creating a workforce that will sustain the livelihood of the community,” he said.

Braekkan informed the audience that many of the workforce’s struggles that have come to light in the last two years because of the COVID pandemic, but really it is a result of demographic challenges starting in the 1970s.

Since the 1970s the nine-county region has grown by an average of 304 people a year. In the same period, the region has created 1,037 jobs. That’s a job deficit of 700 people every year for 50 years.

Based on these numbers Braekkan argued the region was great at creating jobs but has actually created too many jobs and was not embracing automation enough. Businesses like 3M and Kraft were embracing some automation, but he believed this was not true throughout the region.

The U.S. population has grown at an average rate of 7%, but the Region 9 counties have only grown by 1.3%. Some counties have seen negative growth.

From an ethnicity standpoint, the Region 9 area has seen significantly less growth in the Hispanic population than the rest of the country. The national growth rate for the Hispanic population over the last 10 years is 18%. Most of the Region 9 counties were in the single digits for growth except Watonwan County, which had a 25% growth in the Hispanic population.

The region does well in high school graduation rates, which are higher than the national average. However, the region has a lower rate of bachelor’s degrees. Braekken said many people from the region do attend four-year schools but do not return to their hometowns after graduation.

“That’s one of our biggest challenges from an economic development standpoint: how do we get kids with that four-year degree to remain or return here?” Braekkan asked.

He praised the creation of the Career and Technical Education (CTE) Center and investments in Project Lead the Way, as this will invest in youth.

Following Braekkan’s presentations, multiple local industry representatives spoke about how they were handling the work shortage.

AMPI Plant Manager Bill Swan spoke on how the company has addressed worker shortages by targeting minority communities. AMPI was down 26 employees, hurting production and cutting into business margins. However, staffing has improved since AMPI hired from the Hispanic and Hmong communities. He said the demographics are going to have to change in New Ulm to meet the workforce demands.

Swan said housing was an issue. Employees were struggling to commute. In response to the 118-unit housing development on North Highland, Swan asked, “When is the next 118 (coming)? Because that’s what it is going to take.”

Jake Mason, 3M operation manager, said currently they have 24 full-time production positions open, which is relatively high but is down from a high of 60 openings.

“We’re making progress this year, but it has been hard fought,” he said.

About 7% of 3M’s workforce are baby boomers, with 53% being Generation X. Mason said retirements are a significant problem, but employee turnover is high among those working for 3M less than five years.

He said the company is hiring people new to manufacturing and deciding it is not the correct career for them and leaving. This is expensive and time-consuming to invest in short-term employees. The company is working to give employees recognition to keep them long-term.

Brandon Maceman, Human Resource director at New Ulm Medical Center, said the hospital is at 88% strength. Housing is a concern for NUMC. He said employees are split almost equally between living in New Ulm and commuting. Applicants frequently cite the housing shortage as the reason why they commute. The average commute time is 35 miles. The detour on Highway 14 has become a significant challenge in hiring individuals.

Growing a professional population for a medical center is time-consuming in normal circumstances, but the recent COVID pandemic was a huge deterrent. With cases going down, motivation for joining the medical community is growing again.

He said many of the young professionals coming up in the medical community, communicate in different ways. Allina as a whole is trying to switch its approach. He believes this will be the new area of growth.