Software-sector labor shortages nothing new in Minnesota

Software-sector labor shortages nothing new in Minnesota

2021-04-30T16:35:00-04:00April 30th, 2021|Economy, Minneapolis-St. Paul, Technology, Tourism, Trade & Logistics|

Writer: Joshua Andino

software2 min read April 2021 — While a national labor shortage continues to impact industries across the country, the challenge has long been present for Minnesota’s software industry. 

In a survey of the state’s largest software firms reported by the Twin Cities Business Journal, many responded that the largest challenge for this year would be recruiting and retaining talent. 

Minneapolis technology firms have been considering ways in which to return to the office in order to both maintain their growth as well as retain the talent that they already have. Flexibility has been a priority for employees, a testament to the likelihood that the hybrid work model brought about by the pandemic will be a lasting change across the industry and others.  

Minneapolis-based Kipsu, which provides a messaging platform for hotels and other customer-service businesses to contact customers, have been struggling to find talent for a while now. The company has 60 employees, with plans to hire 30 more in Minneapolis. Considering the challenges of hiring in a pandemic “It wasn’t easy before Covid-19, and I don’t think it’s changed since then,” CEO Christopher Smith told the Journal. 

It’s a jobseeker’s market these days, and software companies such as Kipsu are not only competing with each other for talent, but across a bevy of sectors with other industry players, such as digital consultancies and the IT departments of Minnesota’s Fortune 500 countries, Smith explained. 

Other companies, such as Minneapolis-marketing firm Bold Orange have turned to acquisitions in order to fuel growth, after buying digital-consultancy agency Three Deep Marketing. Overall, Bold Orange and Three Deep will have 75 employees total, with plans remaining to hire an additional six workers. The companies have offices in Minneapolis and St. Paul.

A lack of talent and fierce competition for what remains available is being felt across the country and many industries, and while tech firms may be able to overcome some of these challenges by being more easily able to adapt hybrid and flexible work models, not all are so lucky. As the economy begins to slowly reopen across the country, many are wondering where have all the workers gone.

The pool of overall available workers remains below pre-pandemic levels, and it has made hiring difficult for employers, explains Carson Gorecki, a regional labor analyst for the Minnesota Department of Employment and Economic Development. The trend is happening across the country, and may force employers to begin raising wages, as potential employees feel more comfortable searching for better offers or relying upon expanded unemployment benefits

Over in Duluth, the city’s director of workforce development, Elena Foshay, explained to the Star Tribune that, “If you want to look for a job, now is a great time. Every employer hiring is struggling right now.”

The unemployment rate for March in the Duluth area was at 4.3%. In Minneapolis, it was 4.1%

The leisure and hospitality industry, after noticeable gains in the first two months of the year, showed only a slight uptick this past month. In the Minnesota tech ecosystem, the growth is more deliberate.

Wayzata-based digital consultancy firm RBA is hiring nearly every week, CEO Rick Born said to the Journal. The company has around 200 employees after acquiring Duluth-based Saturn Systems and 20 others it had hired since then. Minneapolis-based Calabrio and St. Louis Park located Irish Titan have announced similar expansions and new hires in both the Minneapolis-St. Paul metro area or in new offices across the country, such as Austin, Texas. 

“I see a remote component to our workforce as being a constant moving forward,” he said.

Tech employment is expected to grow 2.5% across the country in 2021. Minneapolis had the 10th-largest growth in tech job postings of any U.S. metro from February to March, according to the Illinois-based information technology trade association, CompTIA.