Cash bonuses and free lunches: No end in sight to labor shortage

A woman prepares bagels sandwiches.
Ashley Bulmer owns Big Apple Bagels in Forest Lake, Minn. Her shop is closed several hours each day because she can’t find enough workers to help her. “It's just unreal," Bulmer said.
Mark Zdechlik | MPR News

Ashley Bulmer is spending a lot less time on marketing and otherwise growing her business than she would like.

At Big Apple Bagels, the business she owns in Forest Lake, she’s working the line with her relatively low-wage employees trying to fill a wholesale order. And the shop is closed several hours each day because Bulmer can’t find enough workers to help her.

“It's just unreal. I thought we were past this to be perfectly honest,” Bulmer said. “I never thought that I would experience such a shortage of staff. And my husband, who has been in restaurants since he was 16 — we're almost 40 now, and this is the first time in his lifetime that he's ever seen a labor shortage like this.”

Minnesota Department of Employment and Economic Development Commissioner Steve Grove said many factors are contributing to the worker shortage, including challenges in finding transportation and child care. And as the population ages, many people are retiring. Minnesota’s economic potential is being held back because of the labor shortage, Grove said.

“Employers across Minnesota tell us every day they're struggling to find workers, and it really applies to almost every industry,” he said.

As employers realize they have to enhance their offerings to retain workers and attract new people, employee incentives are becoming more common, Grove said.

“We're seeing just a huge influx in creative solutions across a whole host of companies, whether it's catered lunches or signing bonuses or child care slots, to try to help give workers that pathway to come and work at their firms.”

Karl Amlie is seeing businesses offer bonuses, too. He runs Express Employment Professionals, an employment agency in Forest Lake where he tracks job openings on giant whiteboards.

“We've got a customer that's offering a $10,000 starting bonus for heavy truck mechanics," Amlie said.

Amlie said he’s seen a rise in people interested in finding work since about the time the extra federal unemployment benefits ended earlier this month. 

“We went from a month-and-a-half ago, we're doing in the mid-20 interviews per week, to the last five weeks, we've averaged roughly 40 interviews per week,” Amlie said. “So we've really seen numbers uptick here in the last four or five weeks as people are anticipating those unemployment benefits ending. A lot of people started becoming a little bit more motivated to reach out and start looking for a job.”

Ted Chalupsky, the founder and CEO of a company called The Right Staff, a professional staffing recruiting company based in the Twin Cities, works with hundreds of companies looking for employees. He too has seen an uptick in interest in finding work since the extra federal unemployment money went away but hardly the flood some had predicted. 

Never before in his 40-year career has he seen prospective workers in such a strong position, Chalupsky said.

“I don't believe that they've had this much leverage in a very, very long time,” Chalupsky said. “So it's a good time for people to be looking for jobs, and obviously, a tough time for employers.”

While incentives such as free lunches might be attractive to some, Chalupsky said what people really want is higher pay, and businesses need to come to terms with that.

“These positions that paid, let's say $12 to $15 a year ago, they need to be looking at minimum $16 to $20 an hour,” Chalupsky said. “And obviously that increase is going to be passed on to the customer.”

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