Can North Dakota really fix its labor shortage?

BISMARCK — Hiring in North Dakota used to be much simpler.

A "help wanted" sign hung in the window or a classified ad placed in the newspaper might have brought applicants through the door at JL Beers, a burger joint with seven locations in the state.

But amid a severe labor shortage, the popular chain, like so many other restaurants, has encountered a harsh reality when it comes to employee recruitment, said JL Beers president and co-owner Lance Thorson.

"Even just getting people to show up for an interview seems like a win these days," Thorson said.

North Dakota has one of the lowest unemployment rates in the country, and thousands of business owners like Thorson frequently come up empty when diving into the shallow pool of job seekers.

A November jobs report found about 16,000 openings in the state, but Job Service North Dakota estimates there may be as many as 40,000 vacancies. (Many employers don't post all their vacancies for similar positions, according to the agency.)

And it's not just restaurants and retail feeling the shortage. More than a quarter of the vacancies in the November report came in health care-related positions, including nurses and medical specialists.

With a four-month legislative session just around the corner, workforce development seems to be top of mind for all of the state's most powerful decision makers.

Republican Gov. Doug Burgum has referred to labor shortages as North Dakota's "No. 1 barrier to economic growth."

Senate Majority Leader David Hogue, R-Minot, said his chamber's main priority next year will be finding ways to attract and retain workers. The Senate will establish a brand new workforce development committee to focus on the issue.

"The problem is getting worse — not better. When you have more openings and more unfilled positions, you have to think, ‘Am I doing enough?’" Hogue said. "If the problem is increasing in severity, you try to increase your response."

Legislators will consider several proposals that would use millions of dollars in public funds to recruit workers, but North Dakota State University economics professor Jeremy Jackson warns that policymakers might not be best-equipped to remedy labor shortages.

"It's not really a problem that a policy is going to solve. It's an issue with respect to the marketplace," Jackson said.

North Dakota's labor shortage is hardly a new problem. Many employers in the state have struggled to fill vacancies since the Bakken oil boom began in the late 2000s.

But North Dakota employers no longer have an advantage in the wages they can offer due to a tight labor market in the rest of the country, Jackson said.

Troubles endured by businesses and consumers during the COVID-19 pandemic also made the lack of workers more noticeable, he noted.

The hospitality industry has been battered over the last several years, and the frequent headlines about labor-starved restaurants shuttering bring attention to an issue that previously flew under the radar for most ordinary people, Jackson said.

Labor shortages have an effect on every part of the supply chain, including the production and distribution of goods, Jackson noted. Americans are seeing the results during shopping trips.

"You go to the grocery store, and in the past I almost always expected to find what I need," Jackson said. "Now, sometimes you get there, and there's just an empty spot on the shelf."

Hospitals in North Dakota have long grappled with a nursing shortage, and surges of COVID-19 infection pushed health care systems to their limit during the worst of the pandemic.

Hiring medical workers was very difficult during the period following the pandemic as many frontline staff left the industry due to burnout, said Sanford Bismarck Human Resources Director DJ Campbell.

Sanford Bismarck still has about 350 job vacancies for both clinical and non-clinical positions, but Campbell said the health system has recently had slightly better luck with hiring.

Bismarck's biggest health care provider fills many vacant medical positions with contract staff to keep some of the load off local nurses and doctors, but burnout remains an area of concern, Campbell said.

Campbell said patients don't usually feel the impact of the nursing shortage, but they could potentially have to wait longer to see medical providers if hospitals are short-staffed.

Sanford has tried to strengthen ties with NDSU, University of Mary and other institutions to hire newly graduated nurses, Campbell said. The company also recruits internationally and employs nurses from the Philippines, Nigeria, Brazil and Canada, he said.

Thorson said JL Beers has gotten more creative in the way it reaches prospective job applicants. The company is producing online multimedia ads to urge people to apply, rather than simply posting listings on social media and job sites.

"I feel like in this day and age you have to reach out to the person that's not satisfied at their job because they’re not always the ones looking (to apply)," Thorson said. "It needs to be almost a direct message to them."

The chain has also raised its wages and beefed up its benefits package to lure applicants, Thorson said.

Emily Riedman, a spokeswoman for Job Service, said workforce shortages affect North Dakotans’ quality of life regardless of whether they work in a heavily impacted industry.

"Whether you’re an employer struggling to fill job vacancies, an employee taking on a bigger workload, a parent who left the workforce due to lack of child care, or a consumer whose neighborhood grocery store or diner shut its doors, we are all sharing the burden of this labor shortage," Riedman said in an email.

Burgum and Hogue have promoted a multi-pronged approach for addressing the state's workforce issues.

The governor's proposed state budget sets aside $167 million for investment in a variety of workforce-targeted programs. Nearly half of that money would go toward making child care more available and affordable for working families.

If stay-at-home parents had better options for child care, more of them would enter the labor market, Burgum said during a budget address earlier this month.

Burgum also proposes spending $25 million on the recruitment of workers from other states, as well as $30 million in grants to local governments and colleges for workforce development programs. Burgum has supported the expansion of tax credits for companies that use automation to replace worker production.

Hogue favors spending public money to incentivize out-of-state students at North Dakota colleges to stick around after graduation. The lawmaker added that bringing in more legal immigrants should be a piece of the workforce formula, though he noted that's mostly up to the federal government.

Jackson said some policy decisions, like establishing a favorable tax environment, might help bring more workers to North Dakota, but there's only so much the state government can do to solve a problem that finds its roots in demographics and economics.

The imbalance between older residents reaching retirement age and young people entering the workforce leaves North Dakota with an uphill battle on the workforce front, Jackson said.

"The demographics are not working in our favor," Jackson said.

The onus for attracting out-of-state workers to move to North Dakota should fall on private businesses, Jackson said. The compensation packages firms offer would have to exceed what workers can get in other states, he noted.