Workforce front and center in Fargo

Strong, diversified economy challenged by lack of labor

BY KRIS BEVILL

When Jim Gartin visits other communities in the region he can’t not point out the incredible economic run the entire northern Plains has had over the past few years. “What an incredible time to be in this region, in this state. It’s really an amazing time for business,” he says. As president of the Greater Fargo/Moorhead Economic Development Corp., Gartin has had the pleasure of leading the organization during a period of prosperity the likes of which most economic developers only dream about. Not only are businesses strong and growing, but the F-M’s business sector, once heavily focused on agriculture and ag-related businesses, has been successfully diversifying, as evident by the continued strong local economy despite a recent downturn in the ag market.

“That sector is in a slump for the first time in 10 years and yet it’s not even having an impact on the economy because sectors like technology, health care, finance and banking and retail have all become such powerful sectors within our region,” Gartin says.

A robust economy such as that of the Fargo-Moorhead metro also requires a different approach to continued economic development. Economic development groups typically spend at least half their time recruiting new businesses to the community, according to Gartin, but the GFMEDC has adopted a model of development known as “economic gardening,” which focuses on supporting existing businesses and growing new business from within the community. Key industries included in that plan include fast-growth opportunities such as technology companies and, on the Minnesota side of the metro, data centers. The group also readily supports entrepreneurial development and foresees possible opportunities for regional distribution centers that could take advantage of the metro’s interstate accessibility in all directions.

But workforce remains the huge elephant in the room when considering any type of business growth in the region, and Gartin knows it. “Our biggest concern right now is that to go out and attract, let’s say another ag-related manufacturer, the only thing you’re going to do if you’re going to bring somebody in that’s going to employ 200 people is pull 200 people from some other existing manufacturer,” he says. “That impact has to be considered in your planning. If you had 10 percent unemployment it would be a different story. We have to be almost surgical in a sense, because with 2.4 percent unemployment … let’s face it — that’s the biggest issue any prospective company is looking at.”

Workforce is by far at the top of the list of concerns among existing businesses in the metro as well. Of 200 businesses contacted by the GFMEDC over the last couple of years, a resounding 90 percent expressed problems with workforce recruitment and retention. “When you get anything above 60 [percent], or even 50, you know you have a problem,” Gartin says. “To be in those kind of percentages, it’s past a problem — it’s really affecting people’s ability to sustain their growth here.”

In October, a group of organizations including the GFMEDC, the Fargo Moorhead West Fargo Chamber of Commerce, United Way of Cass-Clay, the Fargo Moorhead Convention and Visitor’s Bureau, the FM Area Foundation, as well as a number of local businesses and education institutions announced they would fund another workforce study in an effort to identify causes, and hopefully resolutions, to the metro’s widespread workforce shortage.

This latest study will differ from other recently conducted labor studies in that it will focus specifically on the FargoMoorhead metro and will therefore potentially identify issues and solutions unique to the community, according to supporters.

Austin, Texas-based consulting firm TIP Strategies kicked off the study on Nov. 1 and will spend the next six months evaluating labor market characteristics, including salary statistics, conducting employer surveys and identifying target industries for the area’s available workforce as well as high-demand occupations for those target industries before presenting its findings to the group. The study is expected to cost $150,000.

Sanford Health is among the list of employers which agreed to contribute financially to the study. As the metro’s largest private employer, the health care organization certainly has a healthy stake in the outcome of the study and in the future of workforce availability throughout the region. Paul Richard, president of Fargo’s Sanford Medical Center, is also a board member of the FMWF Chamber and says the chamber regularly hears from businesses across all industries that workforce is their top concern. Sanford agreed to help fund this particular study because it will potentially dive deeply into the issues at hand and hopefully help businesses determine the best way to attract and retain the next generation of workers. “It’s hard to act on guessing, so the more that you find out by way of information and realistic data, you can make better decisions,” he says.

As of Nov. 9, Sanford employed 7,744 people within the Fargo-Moorhead metro and nearly 9,400 people throughout the greater Fargo region. The organization has been steadily adding employees since 2009, despite the admitted challenges in recruiting new workers to the area, and it intends to continue adding employees over the next few years. In fact, projections call for an additional 2,000 employees to be added in the greater Fargo region over the next five years. In Fargo alone, 300 new employees are expected to be needed in 2016 as it prepares to open its new medical center in 2017. The massive facility ranks among the 10 largest health care projects currently under construction in the U.S., although Richard notes that the center will only add 26 beds to Sanford’s current in-patient capacity. Many of the organization’s staff members will transfer from existing campuses to the new center when it opens, but new employees will need to be added to fill out the staff, along with anticipated additional employees that will be required to meet the growing demands of health care in the rapidly growing region. And Richard points out that the organization doesn’t only employ medical personnel; it also requires many workers in other high-demand fields such as IT, which makes the latest workforce study very relevant to the organization.

Gartin stresses that the study will only be as successful as the information provided for it, and encourages area businesses to complete surveys and sit on workforce groups when asked to help identify and resolve the issue at hand. His group is working to help existing businesses identify other possible solutions, such as establishing satellite offices in nearby communities or utilizing remote workers to fill staffing gaps, but he is optimistic the business community can also work together to attract and retain the workers needed to maintain overall growth. “We’re really hoping the community will step up and be a partner and participate in the process.” PB

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