Company builds housing, funds daycare to keep workers

Proactive approach to shortages pays off for western ND manufacturer

BY KRIS BEVILL

Workers, housing and daycares. All three are in tight supply throughout the region and many businesses are finding it difficult to expand their operations because of it. The situation is most dire in the Bakken region, where some companies have decided the best solution to the problem is to provide their own housing and child care options for employees.

Killdeer Mountain Manufacturing Inc. has been making equipment for the aerospace industry for 25 years and is headquartered in Killdeer, N.D., about 40 minutes north of Dickinson, N.D., amid the region’s bustling oil boom. A few years ago, employees at the Killdeer office began losing child care for their children as high-paying energy industry jobs lured daycare workers away from their businesses.

“We were at the point where we were going to lose some of our key employees because they couldn’t find daycare,” says Don Hedger, president of KMM.

KMM decided to subsidize a daycare facility in order to keep its employees and help other workers in the community who were also facing daycare shortages. For the past three years, the company has provided rent-free space and covered the utility and insurance costs for a child care facility, which otherwise operates as an independent business. Hedger says the arrangement allowed his employees to stay on the job and has provided a needed service for the entire community, which has made it worth the expense. “The main thing we need are employees, and particularly key employees, so we’re happy to do it,” he says.

Housing also became an issue a couple of years ago as KMM sought to fill open positions in Killdeer, but no housing was available for new employees. KMM opted to build its own 24-unit apartment building and made it an affordable housing project, which allowed the company to utilize several state programs, including the popular Housing Incentive Fund, which is administered by the North Dakota Housing Finance Agency. A $1 million HIF allocation for the $3.3 million project helped make it a feasible option for the company, Hedger says. Additional partners in the project included the Bank of North Dakota, the city of Killdeer, Dacotah Bank, Roers Development and Stark Development Corp.

“We’re glad we did it, and with the help from the state we can make it work,” he says. “When you need employees — and we’ve had a certain drain on our employees due to the energy boom — you have to do something. That was one of the key things we did.”

The apartment building opened last July. Hedger estimates that about seven of the building’s 24 units are currently occupied by KMM employees. A KMM sister company owns and operates the property.

The U.S. Department of Agriculture’s North Dakota Rural Development agency provided guidance for KMM’s housing project and Director Jasper Schneider says he has noticed an uptick recently in the number of inquiries his office has received from businesses regarding both employee housing and daycares.

“Employers are recognizing that in order to recruit and retain talent, finding solutions to the limited number of options in the housing and child care market is important,” he says. “These two issues have very much become workforce issues and the reality is that the communities and employers that figure it out are the ones that will be able to retain talent.” USDA Rural Development can provide assistance for housing and child care projects through its business and community programs, he says.

KMM’s operations also include locations in Dickinson, Hettinger and Regent, N.D., and Hedger says the company would consider building more housing to accommodate its workforce if needed, but it has no immediate plans to do so.

Business has been “mushrooming,” according to Hedger, and the company has nearly doubled its annual sales in the past five years, from about $25 million to an anticipated $44 million this year. To further address the lack of available workers, the company has invested in automation to reduce its manpower requirements and is making the most of its current workforce. “We’re adopting every LEAN principle that we can put our hands on to become more efficient with the number of people we have,” he says. PB

Kris Bevill Editor, Prairie Business 701-306-8561, kbevill@prairiebizmag.com