Business booming in NW Minnesota despite tight labor market
The words “rural” and “remote” are practically synonymous with economic decline and empty storefronts in much of the country. Yet, in far northwestern Minnesota near the Canadian border, several major manufacturers and one giant global distribution company are thriving. The area’s unemployment rate is low and local Main Streets appear healthy.
With the demand for labor as high as ever, it’s striking that the region’s businesses are still finding the workers they need. How have they navigated the tight jobs market? The answer begins with experience — this is not a new issue in northwestern Minnesota.
“This section of the country has dealt with low unemployment and growing employer demand for workers for years,” said Brigid Tuck, a senior economic impact analyst with University of Minnesota Extension in Mankato.
Experience has taught local employers that it helps to have a career path pipeline for their workers if they want to keep them. "To get people from sort of entry-level positions to our more skilled positions,” said Tuck. “And kind of keep them in our communities and moving through that pipeline."
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Worker training, free education
Take Erin Shegrud. She started working at Polaris Industries in Roseau, Minn., in 1994 at the age of 18.
“At the time, I had started a family at a young age and didn't have the ability to go to college,” she said. “So, I decided to start in manufacturing and have since let Polaris provide all of my schooling and education."
Her path at the company took her from the metal paint department, where she started, to a lead and then supervisor role in the welding department. She now supervises the warehouse and shipping departments at Polaris.
At the same time she is working to get her four-year degree at the University of Minnesota in leadership management — courses her employer is helping to pay for. "My hopeful plan will be to be a manager over one of the [company’s] departments," she said.
Polaris was founded by three local entrepreneurs in the early 1950s. The manufacturer of snowmobiles, motorcycles, boats and ATVs is now a publicly traded company with a workforce of more than 16,000 employees around the country. That includes 1,400 employees in Roseau, a town of just 3,000 people.
Company leaders say their investment in employees’ knowledge and skills is a key ingredient fueling Polaris’ economic success.
Flexible work, flexible hours
The challenge of recruiting and retaining so many workers has also pushed Polaris to adopt flexible shift schedules. Potential hires can choose part-time work and hours that suit their needs, said Kellie Roth, head of human resources at Polaris.
“Maybe the ideal fit is to have five full-time regular hires, but you can't find those five. So, you might have 10 part-time hires to meet that need,” she said. “So, if you are a school bus driver and you want to then fill in between your routes, we can work with you on that. If you're an 18-year-old and you're in your senior year of high school and you want to work a couple of hours after school, maybe three nights a week, we will work with that.”
Meeting the needs of workers is a common theme among employers in northwest Minnesota.
When Dennis Brazier co-founded Central Boiler on the outskirts of Greenbush, Minn., in 1984, he typically hired employees to do one specific job. That was the dominant model in manufacturing at the time.
Now, the company lets employees change up their work to keep it interesting. “We try and break jobs up because it's hard for people to do the same job all the time. It can get boring,” said Brazier.
The skill involved in many of the region’s manufacturing jobs from the Polaris plant in Roseau to Marvin Windows in nearby Warroad is another factor that can make the work more satisfying over an employee’s career.
“For example, the snowmobile assembly and the window assembly at Polaris and at Marvin, it involves skill,” said Louis Johnston, a professor of economics at the College of St. Benedict and St. John’s University in Collegeville, Minn.
“It involves people not simply taking components and putting them on all day, like in a Charlie Chaplin movie,” he said. “It involves thinking about things, it involves working in teams, it involves very customized manufacturing, in ways that you couldn't necessarily get if you don't have a well-trained workforce.”
Good pay and benefits help sweeten the deal. The average manufacturing worker’s paycheck is more than one-third higher than the average for all jobs.
The same goes for wholesale trade, according to Anthony Schaffhauser, a labor economist with the Minnesota Department of Employment and Economic Development. Manufacturing and wholesale trade account for 44 percent of payroll in northwestern Minnesota.
And, noted Schaffhauser, the cost of living in the region is low relative to most counties.
No-layoff policies
Northwestern Minnesota is something of an anomaly. While many of the anchor companies in the region have expanded operations elsewhere, the founders and their successors have maintained a major local presence and commitment to the people in the area.
When Marvin Windows was founded by George Marvin in 1912, the story goes he was trying to provide jobs for his friends in the small community.
“So they wouldn't leave,” said Paul Marvin, chief executive officer.
Over the years, that focus on employees over profits has been tested.
Take the great recession of 15 years ago — a housing market depression that crashed the window business. The third generation of Marvin leaders was at the helm. The company kept to its no-layoff policy.
“I would say it started with a commitment,” said Marvin. “That's not a small thing to say, ‘Our people are our biggest priority.’ A lot of people say it, but your actions actually have to back it up.”
Among the steps the company took to survive the downturn at the time was a hiring freeze, 32-hour work weeks and pay cuts for salaried employees. Benefits went on pause except for health insurance.
Marvin could have saved more money by cutting staff but company leaders say that would have made it harder to entice workers back when the economy improved. As the housing market heated up again, Marvin’s business quickly rebounded.
Now the need for workers is as great as ever, and Marvin and other anchor businesses in northwestern Minnesota credit the investments they’ve made in their workforce as a big reason for the region’s continued economic growth.