How Growth Hurts

Valuing Human Capital in the Midst of a Hiring and Housing Crisis

By Kate Downen, 5-16-06

Ask just about any employer in the Flathead and you’ll get the same story: hiring and retaining employees is a nightmare. Unemployment rates are lower than ever, open jobs at the Flathead County Job Service are over 600 (compared to 300 at this time last year), construction continues to boom and housing costs are sky high. These issues are defining business in the Valley as development unyieldingly marches on and able workers seem to be more and more scarce.

Wanna work? Vacant entry-level and service jobs are at your command. Pizza Hut’s marquee announces a pleading $200 hiring bonus. A local restauranteur told me the other day that he’ll hire just about anyone with a pulse who walks through his door.

My friend Steve Anderson owns Artisans Doors of Montana, a high-value, custom wood products business. He pays an average wage of over $12 an hour for entry-level positions, with benefits. Each summer he loses employees to the construction industry. Valley development is at an all-time high, and construction workers can start around $20 an hour to hammer away in the sunshine. It’s tough competition. The construction industry isn’t the only culprit though; employers tell stories of ‘come and go’ employees, lacking skill sets, and other businesses hiring away top workers. Steve has encountered all of these issues at Artisans, and has had a difficult time finding people with work ethics and values that fit his company.

Attrition isn’t going out of style any time soon. In four years Artisans Doors hasn’t laid off one person, yet the business has gone through over 130 employees. Right now they’re actively recruiting for at least six positions; entry-level, high-skilled and designer spots whose vacancies leave the company short 10% of its workforce. Fewer applications come in now than when Steve started four years ago. The problem’s getting worse, and surrounding circumstances aren’t helping.

Many of Artisans' employees have been people who are new to the Valley. Affordable housing and cost of living, he says, are major problems his employees—and Valley workers at large—are facing right now.

“After the first three or four months of living here, when the Rocky Mountain Fever wears off, people realize they just can’t keep living the way they’re used to. Life in the Flathead is cost prohibitive—eating, recreation, housing…it’s expensive. They realize that they need to make a change, and they find out that it’s going to take more than $50,000 a year to support a family and make a life here.”

When employees come to Steve and tell him they’re moving somewhere else where life is more affordable, he does all he can to keep them. He’s even visited some of them at home to get a real picture of what their lives and homes are like.

“Employees have come to me to tell me they’ve got to take a different job because they want to settle down, buy a home. It’s really tough trying to make a living here. I would rather help them—ask if I can work with them on financing a home—than lose them.”

Steve’s on to something. Investment in employees may just be the path to business salvation in a climate like this, and no, we’re not necessarily talking about dollars.

Virginia Sloan at the Flathead County Job Service has an outlook that’s contagious, regardless of the bad numbers and hard luck stories. It’s all about taking stock in people.

“Human capital in a business is critical to success,” she says. “There are huge opportunities for employers who want to invest in the potential of their employees.”

New businesses are on their way. Two Hilton hotels are likely to be sprouting up in Kalispell in the near future, along with Highway 93 retail stores that will need entry-level employees galore. Where will they come from? Where will they live? In the midst of this rapid development and employee shortage, our growing pains are surfacing like never before.

We can build it, but it may just be too damn expensive for them to come. Or stay.

To solve these problems, we need smart solutions in housing, and employers need to be creative, supportive and serious about acknowledging their human capital.

It'll be an uphill battle, but here's to fighting it, the right way.

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