Big-tech companies on the West Coast this fall have been laying off hundreds, even thousands, of people at once. But in Minnesota, employers are still actively hiring.
While some are becoming more cautious amid concerns about a possible recession next year, for now the biggest obstacle for many Minnesota businesses remains finding workers to fill open positions, recruiters and business groups say.
"The number one issue for most of the members who I talk to remains talent," said Charlie Weaver, executive director of the Minnesota Business Partnership, which represents many of the state's largest companies. "The tech sector is really struggling right now but others are desperate for talent."
Both the U.S. and Minnesota continue to add jobs every month, albeit at a slower pace than earlier in the year. At 2% in September, Minnesota's jobless rate continues to be at historic lows and the lowest in the nation. The state jobs agency will release unemployment figures for October on Thursday.
There have been some signs of cooling off such as in the housing sector as the Federal Reserve has been rapidly hiking interest rates in an effort to bring inflation down. As rates go up, Fed officials expect the labor market to also cool.
But new jobless claims both in the U.S. and Minnesota remain at very low levels, and they have ticked up only slightly in recent weeks.
Meanwhile, the number of job postings in the state remain elevated. In fact, they're up 19% over the last 12 months, said Erin Olson, director of strategic research for St. Paul-based RealTime Talent, which closely tracks job postings. In the Twin Cities, job postings are up 17% over the year.
That's much higher than the 8% growth a year in job postings in pre-pandemic years.
"So we're still seeing a lot of business recovery," Olson said.
She added that companies are not having as much luck, though, filling as many of those jobs as they would like.
"We just can't find people to fill the jobs that employers have," she said. "So they're posting the job but not filling the role."
In the last couple of weeks, there's been a rapid-fire string of layoff announcements from high-profile tech companies, such as Meta, Amazon, Lyft and Stripe. By one count, it has added up to more than 31,000 job cuts so far this month.
But some labor experts are saying the tech layoffs should not be viewed as a harbinger of what's coming down the pike in other industries.
In a report on Tuesday, analysts at Goldman Sachs wrote that the tech layoffs "are not a sign of an impending recession." The tech sector accounts for a small share of overall employment in the U.S. and those laid off should be able to fairly easily find other jobs, the report noted.
In her weekly blog, Nela Richardson, chief economist for ADP, wrote that tech hiring is returning to a more normal cadence after the industry aggressively hired at the beginning of the pandemic when other consumer-facing industries saw big job cuts.
"Hiring in other, larger service sectors, though slower, remains robust," she added.
Around the Twin Cities, recruiters say that while they're starting to see some signs of caution on the part of employers, many firms are still trying to recruit for and fill open positions.
Elizabeth Hang, a Bloomington-based senior vice president for staffing agency Robert Half, said there's still plenty of hiring going on but it's becoming more measured.
"We were so frenzied a year ago and inundated with so much hiring going on," she said. "I would say it's normalizing now."
She added that she's still getting new leads coming in, especially as workers continue to quit their jobs at decent rates. But companies are being more thoughtful about when they reach out for help filling those roles as they take a closer look at their business volumes and their staffing needs.
Adam Hoffarber, managing partner for Minnetonka-based SkyWater Search Partners, said that while he's heard of a few companies making modest cuts and putting hiring on hold, most of the firms he work with are just becoming a bit more thoughtful and strategic with their hiring.
"They're having maybe one or two more interviews with candidates," he said. "They want to makes sure they dot every 'i' and cross every 't.'"
He added that many of the companies he works with are still trying to catch up and are still understaffed.
Paul DeBettignies, a tech recruiter in the Twin Cities for more than two decades, noted that Midwestern companies don't go on the big hiring sprees as many Silicon Valley firms do.
"That's just not our DNA," he said. "We're a little more conservative for better or for worse."
That means the Twin Cities may not have the "high highs" of the West Coast.
"But we also don't have the low lows that they're having now," he said.