Delkor Systems just added 130 workers, but after opening a second factory, the manufacturer desperately needs more.
The manufacturer of packaging machines for America's best-known food companies and retailers posted a billboard on Interstate 694 in Arden Hills telling passersby they can earn $100,000 at the firm. Delkor also hired an internal recruiter, increased referral bonuses and turned to head hunting firms and area colleges.
But it's not enough.
"We couldn't be trying harder to hire people, let me tell you. It's crazy," said Dan Altman, Delkor's vice president of sales.
The hiring frenzy is still at play for many companies in Minnesota and across the country — especially at manufacturers and the services industry, according to the latest jobs data.
For those companies that have expanded such as Graco, which makes fluid and coatings technology; construction equipment maker Bobcat; candy manufacturer Maud Borup; and quartz countertop maker Cambria, it's double duty to fill a new set of jobs.
"This is the craziest labor market we have ever seen," said Jim Kwapick, the soon to be retiring district president for the large staffing firm Robert Half. "I have been doing this stuff for 33 years, and we have never seen this type of [job growth] phenomenon."
The big hiring wave is emblematic of a still blazing but complicated labor market — one characterized by historically low 2.3% unemployment, labor shortages, fierce competition for workers and stressful staff turnovers. There are currently 3.2 job openings for every unemployed person in the state.
Federal Reserve Chair Jerome Powell recently said a higher retirement rate and lower immigration rate, plus complications from the pandemic all contribute to the shortage of labor.
That has put many job seekers in the driver's seat when seeking a new position. There are some signs, though, that job seekers might have less bargaining power later in 2023.
Earlier this month officials with the Minnesota Management and Budget Office warned of "a mild three-quarter recession beginning in the fourth quarter of 2022."
With rising interest rates, the war in Ukraine and continued energy and supply chain disruptions, slower growth is projected, especially in housing, construction and manufacturing, the MMB predicted.
Minnesota's macroeconomic consultant, IHS Markit (IHS), is now forecasting U.S. employers will shed 534,000 workers in 2023 and 2024. U.S. unemployment is expected to jump from 3.7% to 5.7% percent by late 2024.
However, Minnesota right now has the second lowest unemployment rate in the nation, after having the lowest for several months.
Doug Loon, CEO of the Minnesota Chamber of Commerce that represents 2,300 Minnesota companies, recently bemoaned a new economic uncertainty.
"We are very worried," he said. "With this continued effort by the Federal Reserve and their monetary policy to tighten up the economy, there is the potential for not having a soft landing as relates to their efforts on inflation. [That] has caused businesses to look very carefully at their future supply chains and their future workforce."
Already tech behemoths such as Facebook, Twitter and Amazon — which hired a large number of workers during the pandemic — have startled the market with massive layoffs. Media giants making cuts include Warner Brothers, CNN, and the sister entities CBS Studios and Paramount TV Studios.
Minnesota companies also have announced smaller layoffs or downsizings.
Freight logistics giant C.H. Robinson laid off 650 workers last month. Days ago, hearing-aid maker Starkey Hearing furloughed 84. The home mortgage arm of Wells Fargo recently confirmed downsizings affecting scores of employees. Last month Code42, Bright Health Group, Nortech System and Fresh Vine Wine joined the ranks of companies shedding staff.
"Adding it all up, it looks clear that employment growth is continuing to lose momentum as 2022 draws to a close," David Kelly, J.P. Morgan Chase's chief global strategist, warned in a newsletter to investors.
A flood of new labor market data "suggests that the labor market is actually cooling off and is likely to continue to do so."
Kelly warned that employment tends to be "a lagging indicator" of the economy. As a result, November's much celebrated U.S. job report of 263,000 job gains sounds really good but probably "overstates job market strength."
It hasn't helped that companies such as 3M, Medtronic, Target and C.H. Robinson recently lowered revenue forecasts.
Kwapick said Robert Half said most corporate clients in Minnesota are not laying off but instead are "much more careful in terms of rehiring" after a resignation.
"Instead of just knee jerk replacing Suzie or John, they ask, 'Do we need that role?' Kwapick said. "It's a more measured approach" than just laying off workers.
Mike Speetzen, chief executive of Medina-based Polaris, which makes ATVs and other recreational vehicles has a "recession playbook" at the ready. He did not give specific details.
Every company has a recession playbook. "You have to," Kwapick said, and head count has to be included. "It will be interesting to see how how this all plays out. Every [recession] play book is different."
Yet some economists say the employment picture might not follow a typical recession.
"At this point the economy is really booming. And the labor market is very tight and people are able to find jobs who want them," said Aaron Sojourner, senior researcher at the W.E. Upjohn Institute for Employment Research. "Employers are still struggling to hire because they are competing hard against each other for talent."
Like Loon of the Minnesota Chamber, Sojourner said the Fed's actions are the wild card in the coming employment picture. Right now, the jobs market "is very hard to forecast.
"The question is, 'Will there be a soft landing or a hard landing?' " Sojourner said. "I think there is a good possibility of a soft landing. I remain optimistic. But there is also a risk of a hard landing that is more painful," because it could spread layoffs far beyond the tech sector.
Restaurateur Erik Forsberg fears pandemic hangovers could threaten employment for his industry, stalling its recovery. Forsberg and thousands of other struggling restaurant owners took out federal Economic Injury Disaster Loans (EIDL) to get them through the pandemic.
The first payment on those 30-year EIDL loans were due last month.
The timing is lousy, said Forsberg, who owns Dan Kelly's, Broadway Pizza and Devil's Advocate in Minneapolis and Joseph's Family restaurants in Stillwater. Customer traffic at downtown Minneapolis restaurants are still only 40% of the pre-pandemic numbers.
Forsberg has rehired most of the 120 employees he furloughed during pandemic shutdowns.
But with revenue still down and loan payments due, "I hope I make it."
