Remote cities can teach the nation a lot about hiring and keeping workers

The national unemployment rate is still rather low at 3.7%. Yes, we’re seeing headlines about layoffs in certain sectors, like tech and media. But overall the labor market has been quite resilient, which means companies are still looking for workers.

For a lesson on how to get those workers, let’s turn to a remote corner of northwest Minnesota. This is a place that has dealt with worker shortages for a long time. Marketplace’s senior economics contributor, Chris Farrell, made several reporting trips there, and he spoke with “Marketplace Morning Report” host David Brancaccio to discuss what he learned. The following is an edited transcript of their conversation.

David Brancaccio: What drew you up there? I assume not the warm ocean breezes or the opportunity to go snorkeling to see tropical fish.

Chris Farrell: Not at all. I mean, look, this is rural, it’s remote and the winters, they’re very long, they’re very cold. You have this handful of dynamic companies that have managed to grow and expand. So I wondered if management’s experience coping with scarce labor might hold lessons for the rest of the country.

Brancaccio: Because layoffs are in the headlines, but so are so many other businesses that are having trouble attracting the talent they need. And here’s an area where they seem to know how to do that.

Farrell: Yeah. And I think for the rest of the country, management should get used to scarce labor markets. The combination of low rates of immigration, people having fewer children and increased retirements with the aging of the population …. well, that translates into slow labor force growth.

Brancaccio: Let’s tell people what these anchor companies in that region are. You may recognize their names. I know Polaris Snowmobiles, 2,600 workers in Roseau. What else you got?

Farrell: Digi-Key. It’s the global distributor of electronic equipment, $5 billion revenue company.

Brancaccio: You’ve got Central Boiler up there. I guess maybe some people’s windows in their homes may come from there?

Farrell: That’s right. Marvin windows, and 2,800 employees, are based in Warroad, Minnesota. By the way, Warroad is a town of 1,800.

Brancaccio: To keep people, these companies must also offer decent pay and benefits.

Farrell: Well, they do. And the other thing is, David, the tight labor market, it’s pushed management to focus on retaining workers. And the way that you do that is you invest in their skills, their education, you embrace flexible work schedules and you encourage, over time, you know, job shifts.

Brancaccio: But if a company wants to grow, it also needs more people. How are they doing that?

Farrell: You’re right. They need to recruit to this region, partly because there are some economic trends that are unfolding that might benefit these companies, such as reshoring, bringing more production to the U.S. So to take advantage of the opportunities, business and civic leaders, they’re combining forces that deal with the two biggest barriers to recruitment and retention: the lack of affordable housing and child care. Sounds familiar, doesn’t it? And everyone has realized that economic development and community development, they’re really two sides of the same coin.