In Colorados tight labor market, even Santa Claus is a potential no-show

You know the job market is tight when you worry that Santa Claus might not show up for his holiday gigs.

Tom Hill, part of the team that manages the Georgetown Loop Railroad, has been juggling employees and operations all year to deal with staff shortages. Until recently, he wasn’t sure there would be enough Santas to meet and mingle with the passengers on the railroad’s “Santa Trains.”

“I think we’ve finally staffed up our Santa Clauses, which is good because that was starting to be scary,” said Hill, vice president of facilities for Historic Rail Adventures, which manages the railroad for History Colorado.

But Hill isn’t breathing easy yet. He’s worried about possible Santa poaching if another business offers even more than he’s paying.

Making sure that Kris Kringle doesn’t disappoint this year is still an issue for Larry Propp. His Colorado-based Propp’er Way Santa agency places people with photography companies that work with malls across the country. The number of people available this year is down because of retirements, opposition to mask and vaccine requirements and fears of getting sick.

“We’re still short. If I had 30 more Santas right now, I could place them,” said Propp, who so far is the only Saint Nick set to appear at the Park Meadows shopping mall in Lone Tree. “Once we get into 10-hour days, that’s not going to work.”

Propp and Hill are among the many Coloradans contending with staff shortages as the economy continues to recover from the pandemic-caused recession. Proliferating “We’re hiring” signs adorn windows, lawns, fleet vehicles and even one coffee-store chain’s cups. Concessionaires at Denver International Airport hoped that a job fair in late October would help fill about 1,000 jobs, but KMGH-TV reported that only about 100 people showed up.

Staff shortages are behind the decision by three school districts to cancel classes Friday and the move by three Denver public schools to temporarily revert to remote learning. Businesses from restaurants to waste-management and delivery companies are boosting wages and offering signing bonuses and such perks as college tuition reimbursement.

Data on the job situation underscore what’s happening on the ground. Colorado’s job openings rate is among the highest in the country, with preliminary, seasonally adjusted figures from the U.S. Bureau of Labor Statistics showing 211,000 open slots in August.

The rate for Colorado and three other states — Michigan, New Mexico and Rhode Island — is 7.2%, the 14th-highest nationwide. The national rate was 6.6% with 10.4 million job openings.

Colorado’s rate of 7.7% in June and July was the highest ever reported for the state. The rate is the percent of all jobs in Colorado represented by the job openings.

The figures are a good indicator of the demand for labor as well as the opportunities for employees, said Brian Lewandowski, the executive director of the Business Research Division at the Leeds School of Business at the University of Colorado in Boulder.

“If you are going to a restaurant or going to a store or even trying to find an accountant, everyone is sort of clamoring about a shortage of workers,” Lewandowski said.

However, a strong labor market isn’t unusual in Colorado. In August 2020, the state ranked 44th for job openings, Lewandowski said.

“But go back three years and we ranked ninth. Go back five years, we ranked 10th. We’ve been somewhat of a leader when it comes to job openings,” he added. “I think there’s a consistency in that Colorado has been a strong job market for employees over the last decade.”

Colorado’s unemployment rate of 5.6% for September was higher than the national rate of 4.8%, but dropped from 5.9% in August. And Colorado has the nation’s 12th-highest labor force growth rate and the fourth-highest labor force participation rate at 68.2%.

The labor force participation rate, seen as a good barometer of long-term economic growth, is the number of people employed or looking for a job divided by the working-age population.

Still, the high number of people quitting their jobs in what’s being called the “Great Resignation,” is interesting, Lewandowski said. Colorado ranks ninth nationally with 3.4% workers quitting their jobs in August. The number doesn’t include retirees.

Nationwide, the resignation rate was a record 2.9% as 4.3 million Americans left their jobs in August.

“It’s an employee’s market, where you have bargaining power. You have opportunities. We don’t exactly know, but I think that’s why we’re seeing a high quit rate right now,” Lewandowski said.

People could be changing jobs to take advantage of higher wages that companies are offering to new workers, Lewandowski said. The leisure and hospitality industries, among the lowest-paying sectors, had among the highest quit rates in August at 6.4%.

“But we’re seeing quit rates across industries that are high,” Lewandowski said.

An employee’s market

Drew Saunders feels like he has navigated many of the twists and turns of a market shaped by labor shortages. He is the country manager for Oberalp North America, which operates the outdoor and mountain brands of Salewa, Dynafit, Wild Country, Pomoca and Evolv in the U.S. and Canada.

For the most part, Saunders said, the teams in the Boulder-based business group, with 21 employees, and the Los Angeles office have remained intact. But two employees left and positions were added because the business is growing.

“All of a sudden we had four openings that we needed to fill and I would say it was very difficult to fill those four,” Saunders said.

A hiring process that normally would take a couple of months stretched into five, during which current employees had additional duties. Oberalp had to post the open positions multiple times. Saunders said some people turned down the jobs for more lucrative opportunities.

One of the people Saunders replaced decided to quit to start his own business and another left for another job. Oberalp increased wages in the customer service department and is reviewing its benefits.

“Everything you read about, we’ve had a taste of it in our small business,” Saunders said.

The surge in outdoor recreation during the coronavirus pandemic has been good for business, Saunders said. He’s going to post three new positions and hopes to get the people onboard by January, but anticipates challenges like those in the last hiring round.

The company also feels the effects of turnover at the third-party warehouse that handles Oberalp’s shipping, receiving and storage in the U.S. and Canada. Saunders said the higher pay and incentives aimed at retaining workers there are passed onto Oberalp in higher costs.

“The ultimate punchline of all this is just the real pressure on costs,” Saunders said.

Rising costs driven in part by higher wages are a concern, said Aleksandar Tomic, an economist and an associate dean at Boston College.

“We see a lot of inflationary pressure. We see it in a way we haven’t for a long time. And then the only question that remains is will (the Federal Reserve) act fast enough and decisively enough,” Tomic said.

Rising house and fuel prices as well as continuing problems with the supply chain that delivers products to customers contributed in October to the fastest surge in consumer prices in three decades.

In metro Denver, consumer inflation rose 4.5% in September, the highest level since 2001.

The end of the federal unemployment benefits, approved to keep people afloat during the pandemic, hasn’t alleviated the labor shortages in many parts of the country as some predicted they would, Tomic said.

“I’ve seen some estimates that say we can probably hang on until the middle of next year until we start seeing implications,” Tomic said. “At some point, you simply need people.”

Pandemic pets

A trend that has sped up during the pandemic is the shortage of veterinarians and veterinary technicians. Diane Matt, CEO of the Colorado Veterinary Medical Association, said there is a shortage of all veterinary professionals in the state.

“That shortage began in the years prior to COVID, but the pandemic has exacerbated things,” she said.

The U.S. Department of Agriculture declared 25 Colorado counties as vet-shortage areas, Matt said, making vets eligible for a federal loan repayment program.

The demand for veterinary services shot up during the pandemic as many people spending more time at home got new animals and started paying more attention to their pets. For a while, Matt said, animal clinics curtailed elective medical procedures when gloves and masks were in short supply, adding to pent-up demand.

Clinics have stopped accepting new clients to try to keep up with the rising workload. Staffing shortages have forced some emergency animal hospitals, normally open around the clock, to reduce hours. In October, the Colorado State University Veterinary Teaching Hospital temporarily stopped accepting small animals as emergency patients during overnight hours because of “extreme staffing shortages.”

Matt said that 66% of the jobs listed on a national veterinary career board get no applicants.

Ginger Burchyett, the head veterinary technician at Belcaro Animal Hospital in east Denver, has been on the front lines of dealing with staff shortages in face of rising demand. After two veterinarians left in April, the clinic is back up to six doctors but remains about five vet techs short.

“There’s been some turnover throughout the years. What I’m noticing more so during the pandemic is that when I am hiring, I’m not getting as many applicants,” Burchyett said.

The turnover is higher now. Some departing employees give no notice. Belcaro is accepting new clients again and reopened its offices to the public, but for only one day. Burchyett said staffers returned to meeting people in the parking lot to get the animals after three employees were recently diagnosed with COVID-19.

“The pandemic has definitely made things more stressful,” Burchyett said. “There is definitely an emotional toll on employees of vet hospitals.”

Employers’ dilemma

One person’s opportunity can be another person’s headache. A recent survey showed that higher unemployment insurance premiums and labor shortages are two of the biggest concerns businesses have, said Loren Furman, a senior vice president of the Colorado Chamber of Commerce.

“The worker shortage is not even a specific industry. It’s everything from telecom to financial businesses to restaurants,” said Furman, who will take over as the chamber CEO and president at the start of the new year.

The restaurant industry has suffered through closures and restrictions during the pandemic. Restaurants in the state have raised wages by 19% on average and more than 23% of the operators have added benefits and other forms of compensation to attract and retain employees, said Sonia Riggs, president and CEO of the Colorado Restaurant Association.

A National Restaurant Association survey at the end of September found 84% of Colorado restaurants said they didn’t have enough workers to meet the demand, Riggs said in an email. Many restaurants have cut hours and the number of days they’re open.

Riggs said Colorado restaurants generated $14.5 billion in revenue and employed more than 280,000 workers in 2019. She said the industry lost $3 billion in 2020 because of pandemic-related indoor dining shutdowns and capacity restrictions and is about 7,200 workers below pre-pandemic levels.

The Georgetown railroad lost about $320,000 in revenue because there weren’t enough people to staff the premium train cars, Hill said. But overall, revenue is up from 2019 after extra open-air cars were added and other changes were made.

And Santa’s ready to roll for the holidays. That doesn’t necessarily mean it’s full-steam ahead. Hill’s latest worry? “I think we’re still a little bit short on serving staff.”

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