Even with the third lowest unemployment rate in the United States (projected at 4.3 percent for February 2012), South Dakota is confronting a challenge: filling vacant jobs with qualified workers.
It’s a problem repeated throughout conferences and testimonies across the country: the jobs are there, but the employees aren’t. About 3.5 million job openings were unfilled at the end of January, according to the Bureau of Labor Statistics, even though there are nearly four times that many people who are unemployed.
So South Dakota is doing something about it. The state has hired Manpower, Inc., a workforce consulting firm, to steer its 1,000 New South Dakotans initiative. The goal is right there in the name: bring 1,000 qualified workers to South Dakota in the next two years to fill positions that the state’s businesses already have available.
After crunching the numbers, state officials concluded that there were about 1,700 open jobs in four areas with specialized skills (accounting, engineering, information technology and welding) in South Dakota, and fewer than 100 native citizens on state unemployment with the credentials to take them. With those numbers in mind, Gov. Dennis Daugaard set the goal of attracting new workers to the state of 824,000 people.
“Even though you might try to put more South Dakotans into the training pipeline, they’re not going to come out of the other end for a while. In the meantime, we’ve got job openings right now,” said Daugaard. “Some employers were talking about moving those jobs to another location. That’s the last thing we wanted.”
South Dakota received six proposals for achieving its goals. After reviewing the applications and conducting interviews, Daugaard settled on Manpower, which employs more than 1,000 recruiters nationwide, because of its reputation and resources. The firm will have 15 people on the ground dedicated to the project, said Clint Brown, a placement consultant in the Sioux Falls, S.D., office, mining through a database of 40 million potential candidates for jobs in those four areas.
The two-year contract (with an optional third) began this month. The state legislature approved $5 million for the program in March. Six employers have already submitted job descriptions, and Brown said he has had preliminary conversations with more than 60 companies that are expected to eventually apply.
Positions must be posted on the South Dakota Department of Labor’s website for 30 days before Manpower can begin its search, ensuring that state residents have an opportunity to apply.
The initiative comes with a price: Daugaard’s office estimated that the state will pay between $3 and $5 million for Manpower’s services. The state and businesses will split the firm’s fee: starting at $3,000 for a job with a salary below $40,000 up to $12,000 for a position with a salary above $100,000. Manpower guarantees an hourly candidate will be employed for at least four months (six months for a salaried employee), Brown said, or the company will refill the position free of charge.
If all goes according to plan, the state’s spending will be offset by increased tax revenue (up to $5 million annually, based on initial estimates) and a boost to the state’s gross product (up to $120 million annually).
“It’s very much a self-interested investment,” Daugaard said, adding that he has resisted calls to increase tax rates to raise revenue. “We want to raise revenues at the same tax rates by having more intense economic activity. This is one way to do that.”
Some might balk at recruiting out-of-state workers to take homegrown jobs, and state officials stress that the Manpower contract is part of a broader effort to revitalize South Dakota’s workforce. Daugaard has launched the South Dakota Workforce Initiative, of which the Manpower program is a part, with the goal of improving career education and technical training programs throughout the state. But there is a recognition among state officials that those plans are going to take time to come to fruition.
Business leaders seem to agree. The long-term goals are important, but South Dakota companies have an immediate demand, said Eric Christensen, vice president for finance and administration at Trussbilt, a detention and security manufacturer with two plants and 175 employees in the state.
“Business is picking up, and we’re just trying to find people. The particular skilled worker that we need, there just aren’t that many of them in the state,” he said. “We need people today to meet our current need.”
Trussbilt began experiencing a shortfall in qualified welders and machine operators back in February 2011. For a while, company leaders considered opening a factory in Carson City, Nev., which had a much higher unemployment rate and a solid supply of community college graduates with the right skill sets.
But Daugaard’s proposal changed their plans, Christensen said. Trussbilt, one of the six companies that already formally applied for workers, is instead expecting to fill up to 20 new positions through the program and keep those jobs (and that revenue) in South Dakota.