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For the past four years, owner Karen Farr has struggled to hire and retain employees at her automation components wholesale business in Savage.
Whether it’s for six months or a year, the employee eventually leaves her Universal Power Conversion for a higher-paying job that doesn’t match hers.
“There’s always someone wielding the bigger dollar,” she said.
Turnover has left Firle in a constant state of employment. Meanwhile, she is filling the gap in the lost workforce.
Small business owners like Farre said that over the past two years, small businesses have become a jobseeker’s market. This means it will be difficult to fill needed positions, a worrying trend for some businesses that employ about half of the state’s workers. Minnesota’s unemployment rate is his 3.1%, so there is a shortage of qualified workers, even more than the national level, where the unemployment rate is his 3.7%. According to the U.S. Chamber of Commerce, there are approximately 51 jobs for every 100 open jobs in Minnesota.
The labor shortage is forcing Minnesota’s small business owners to make concessions to get the help they need. Here, local employers talk about the struggles they’ve faced and how they’ve adapted amid lingering labor challenges.
“If you’re a small business, that’s a huge hit to your bottom line,” Farr said.
steep learning curve
Fahl said finding employees is even more difficult given the steep learning curve to fully understand the company’s operations.
She needs employees with a variety of skill sets, from sales and delivery to basic customer service. She also needs someone who is familiar with inventory management, Microsoft Excel, and the accounting software system QuickBooks. When Farr advertised her job six months ago, she said, she had 30 applicants, most of whom had resumes filled with positions they hadn’t worked in more than a year.
“You don’t get any benefits until you’ve been with the company for at least a year,” she says.
Evaporating talent pool
Kathy Eskelson, owner of Anoka Massage and Pain Therapy, said in the nearly 20 years she’s been in the massage therapy business, she’s never seen selection so low for quality candidates.
Minnesota schools training the next wave of massage therapists have closed in recent years, including the Minneapolis School of Massage and Body Works, the Minnesota School of Business, and CenterPoint Massage and Shiatsu School & Clinic. has been done.
Coupled with COVID-19 disrupting the in-person nature of business, many massage therapists are retiring or moving on to other fields of work, reducing the talent pool for businesses like Anoka Massage and Pain Therapy. Even more depleted, Eskelson said.
“One of my biggest concerns is sustainability. The demand is out there, so will there be enough massage therapists to meet the demand of the public?” she said.
Typically, Eskelson’s therapists are booked four to six weeks. We need more therapist staff to make room for new bookings. Eskelson employs about 12 people at her 6,000-square-foot business, which includes a wellness shop in downtown Anoka.
Recently, she hired a beginner directly from Anoka Ramsey Community College. However, because managers are inexperienced, additional training must be provided, which means that managers have less time to work with customers, ultimately impacting the bottom line.
Eskelson said it’s a sacrifice she has to be willing to accept and embrace in order to grow her business. “That’s the cost of hiring people,” she said.
Gap between expectations
Roseline Friedrich, owner of Roseline’s Candles, said the pandemic has had a huge impact on people’s attitudes toward work, especially among younger people in entry-level jobs.
Over the past few years, she said, she has experienced entry-level candidates with little or no work experience not matching their work ethics.
“My expectations for them are much higher than what I would probably get working for the same amount of money at Target, Walmart or Amazon,” she said. “If you don’t want to grow, if you don’t want to learn, if you don’t want to do better every day, this is probably not the place for you.”
According to Friedrich, the idea of working with small business founders has become a bit romantic, with employees accidentally blurring the line between friend and boss in a compact work environment. It is said that there is a possibility. As a small business owner, Friedrich has to take on many responsibilities and expects the same from his employees.
If that doesn’t happen, production will slow down. Like many small business owners, Friedrich doesn’t have a rainy day fund to cover lost production due to underperformance or unexpected departures from new employees.
“I literally feel the effects of their laziness,” she says. “I feel like that’s the case with my bank account, too.”
Friedrich opened a store in northeast Minneapolis in 2021, and this month he plans to open a new store on Grand Avenue in St. Paul that will be twice the size.
Friedrich typically employs five to seven people year-round, but plans to hire more at the new location. Given her past success hiring college students, she intends to do the same in St. Paul, hoping to poach from schools such as Macalester College and the University of St. Thomas.
Adjusting your business model
Mike and Ashley Maharas were hoping 2021 would be a banner year for their Delano-based window cleaning and exterior cleaning business, Wash Masters.
However, when it came time to hire seasonal workers, no one applied.
“We were starting at $18 an hour and no one was working for us,” Mike Maharas said.
After struggling for most of that year, in 2022 he took the advice of a business coach and switched to a four-day work week schedule. The Maharas have also turned to a performance-based pay structure that allows workers to maximize their rewards by completing the most amount of work in the least amount of time.
The number of applicants swelled, and with enough staff to respond to requests for service, sales soared.
“The pandemic has made it painfully clear that people need to get closer to their basic human needs and find balance in their lives,” said Mike Maharath.
Beyond the Mahara Mountains, Wash Masters has another year-round employee. However, at the peak of seasonal work, the company plans to employ up to 13 people. The period runs from April to the end of November, and includes the newly added Christmas illumination service.
Maharas said he has received feedback from employees who believe he made the right decision by adjusting pay levels and work schedules.
“They felt valued,” he says. “They felt like they had the opportunity to live their lives and get paid for their work.”
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