Thu, Oct 20, 2022 1:30 PM
By Mary Stroka, The Center Square
Minnesota’s employers are roughly average compared to other states in their hiring challenges, according to a new report released by the personal finance website WalletHub.
Yet, the North Star state ranked at least seven positions above each of its neighbors. Minnesota ranked 26th. South Dakota ranked 33rd, Iowa ranked 37th, North Dakota ranked 40th, and Wisconsin ranked 42nd.
The report rated states based on the rate of job openings both in the latest month and the last 12 months to determine percentages of job openings. The latest month metric received double weight.
The North Star State’s job openings rate in the latest month reported was 6.20%. In the past year, the rate has been 7.24%. Wisconsin’s rates were 5.40% for the past month and 7.05% for the past year.
Alaska’s employers are struggling most in hiring, the report said. Its latest month reported job openings rate is nearly double Minnesota’s, at 11.90%. Alaska’a past year rate is 9.78%. In New York, employers have struggled least, the report said. The past-month job openings rate is 5% while the past-year rate is 5.78%.
The states struggling the most to find employees are Alaska, Wyoming, Montana, Kentucky and West Virginia. Those struggling the least include New York, the District of Columbia, Washington, Kansas and Michigan.
University of Minnesota Carlson School of Management Associate Professor Alan Benson was on WalletHub’s panel of experts who weighed in on the findings.
Benson said the current labor market is particularly challenging because employers’ needs are quickly evolving so it’s hard to find candidates with the right skillset.
He said turnover factors include workers determining they’ll get higher wages through a job change, amid very low unemployment rates and rising inflation.
“Moreover, some of the norms around work are also evolving, and workers may find they disagree with the paths their long-term employers are taking,” he said.
Low unemployment rates, rising wages and turnover, and stagnating labor force participation could hold back productivity in the short-term, he said.
“In the long term, a greater reshuffling of the labor market could lead to better-matched workers, and workers who are better-sorted among employers differentiated by their work models, but the transition could be painful,” he said.
Employers should be very clear about the kind of person they want to attract and retain, he said. Employers should determine how their demands are distinct from their labor market competitors and offer pay and work experience that fits their ideal hire, he said.
“Employers will sometimes take too narrow a view – for instance, the desire to hire the best person cheaply does not leave much room for strategy,” he said.
For example, if an employer decides they can offer a high degree of autonomy and work-life flexibility, they can tailor their pay, work flow and culture around that amenity, he said.
Benson said that while it’s hard to determine how long labor market trends will continue, the lower labor force participation rate may signal a tight labor market for at least the rest of the year even though some businesses may limit hiring.
“There is just enormous economic uncertainty,” he said.