Survey shows worker shortage and a 'skills gap' are stifling business growth in Grand Forks
Praxis Research Group outlines workforce challenges from employer perspective
A shortage of workers is stifling growth in the public and private sectors, Grand Forks area employers say, but the problem is further compounded by a “skills gap,” according to a survey commissioned by the Grand Forks Region Economic Development Corp.
To address this problem – and build a case for a proposed career and technical education center in Grand Forks – the EDC received a grant from the North Dakota Department of Commerce to hire Mark Schill, vice president for research, Praxis Research Group, to analyze available labor market data and conduct student and industry surveys.
The results of the surveys will be used to strengthen a $10 million grant application the Grand Forks school district plans to submit for a portion of the $70 million the 2021 North Dakota Legislature set aside for career and technical centers. The application, due Dec. 1, must include matching cash or in-kind contributions from public and private sources.
A steering committee, which includes representatives of business, industry, health care, manufacturing, education and North Dakota Job Service, is overseeing several subcommittees working on aspects of the grant. After a review of several options, the committee selected the former Holiday Inn site, near the intersection of Gateway Drive and I-29, as the preferred location for the proposed Career Impact Academy.
Defining the problem
“I would say that workforce is largely the biggest challenge in almost every community – and nationally,” said Schill, whose firm works with various clients on economic development issues. “There’s a lot of talk right now about changing, shifting demographics and the baby boomer generation getting older and retiring."
He said there just aren’t enough people to replace them, particularly in higher-level management occupations.
“We’re seeing all these other national trends in workforce – decreasing labor participation rates nationally, young men leaving the workforce. Certainly the pandemic has exacerbated that to some extent and the opioid epidemic is considered a factor as well. So all these things are sort of adding up,” he said.
“And maybe most critically, for instance, the national labor force participation rate has been dropping since the 1970s.”
Schill’s survey was sent to entities on a list provided by the EDC and Chamber of Commerce. Those entities are hiring different occupations, and they represent “the other side of the workforce equation – those looking to create the demand for workers.”
About 88% of the survey recipients were Grand Forks employers – “not just private sector businesses, but also any employer that’s hiring, including school districts, government entities, or any other nonprofits or organizations like that,” he said.
Of the 115 responses, about two-thirds indicated that the workforce shortage is preventing their business from growing. Altogether, respondents said they had nearly 1,700 jobs that could be filled if the workforce shortage was not an issue.
Most of the responses, 69%, came from for-profit businesses, along with 23% from nonprofit organizations and 8% from government entities, Schill said.
A total of 84% reported that it is “somewhat difficult” or “very difficult” to recruit and hire employees for their organization. On average, respondents had 15.2 open positions they would fill immediately if they could locate qualified workers.
Schill was not surprised by these results.
He said persistently low unemployment in Grand Forks and the region creates a situation where "a lot of employers are looking for employees constantly.”
Most pressing shortages
Schill’s survey also reveals that, according to respondents, the toughest jobs to fill are in the categories of management; installation and maintenance; and business and financial.
Respondents ranked the three most significant hiring barriers as:
- “Lack of trained workers locally,” 54%.
- “What we can afford to pay,” 32%.
- “Lack of awareness about the opportunities in my industry,” 31%.
And a concerning barrier to growth, according to business and other organization leaders, is a lack of awareness, particularly among high school students, of the types of high-paying, in-demand jobs that are available in their fields. Increasing students’ awareness “will be an important component” as plans for the CTE roll out, said Becca Cruger, EDC workforce development manager.
A skills gap also exists, Schill said.
“You may have workers who are looking to acquire skills to fit the new jobs that are appearing – and so that’s where this (survey) effort fits in, is trying to do the best job we can at training and offering the specialized training needed. That’s always changing, it’s a moving target,” he said. “We don’t necessarily know the occupations of tomorrow, and trying to stay on top of that is a challenge.”
Public and private support
Schill’s survey not only explored the nature of the workforce challenges, but also respondents’ attitudes about private sector support for dealing with them.
Nearly half, 48%, said they strongly or somewhat agree employers should financially support career academy programs in Grand Forks schools, Schill said.
Nearly 70% of respondents said they strongly agree or somewhat agree that public investment in career and technical education is appropriate.
Workforce shortages are not unique to this area, but are slowing or preventing growth in business and industry nationwide, Schill said.
The national unemployment rate is 5.2%, while in this area it hovers around 4%, Cruger said. It has been lower than that in recent years.
The purpose of the Career Impact Academy is “to build a future workforce pipeline so kids are career-ready and college-prepared,” she said.
High school students could earn more dual credits – to meet high school and college requirements – that could accelerate their entry into the job market. Cybersecurity is one example of the many in-demand, high-paying careers that may not require a four-year degree, she said.