Job vacancies continue to hinder rural Minnesota businesses (2024)

“From the conversations we were able to have with them and through Red Wing Ignite and the other startup services that we were connected to through the RBIL, we’ve started increasing our sales of our chia (seed) supplements,” she said.

“When you are an entrepreneur and you’re new to this, and when you’re like me, and you don’t have a background in running a business or starting a business, it is invaluable to talk to individuals in that team, because they can boil down the essence of what it is you are looking for and what it is you need, and not only what it is you need, but how to find it, where to go,” Hartman added.

While she has been able to fill positions because of Kasson’s close proximity to Rochester, she knows businesses in other areas of Minnesota haven’t been as fortunate.

“We’re pitted against money that goes into the larger metropolitan areas, and we can’t always afford to pay the same wages that they can,” Hartman said. “We also can’t afford the benefits, and then we have a lack of funding. We can’t get the funding, so it becomes a bit of a self perpetuating cycle for rural businesses to try to compete with that.”

Not surprisingly, Greater Minnesota regions have more unfilled job openings than metro areas. Minnesota’s job vacancy rate — defined as the number of job vacancies as a percentage of the total number of filled jobs— has decreased after a spike in 2021, but concerns over unfilled positions still remain, especially for rural areas.

Changing population demographics is one of the key factors driving the vacancy rate, according to Kelly Asche, senior researcher at the Center for Rural Policy and Development.

Every year since the early 2000s, the Mankato-based organization has created a “State of Rural” report, gathering data from the U.S. Census Bureau, the federal Bureau of Economic Affairs and Minnesota’s Department of Economic Development.

In 2017, the data showed job vacancies were increasing in rural areas. “We were seeing job vacancy rates above 5%, which is really, really high,” Asche said.

In 2021, the nation, and Minnesota, saw a spike in the job vacancy rate because many people did not re-enter the labor force due to many factors, including early retirement, fears over COVID in workplaces, and remote work adjustments that were perhaps more difficult for older populations.

So the job vacancy rate “skyrocketed” to a range of 8%-10% across Greater Minnesota and almost 8% in the seven-county metro.

In 2021, Minnesota had .4 job seekers per vacancy across the state. “We didn’t have a whole body for every job that was available,” Asche said in a presentation earlier this year.

New data shows the state’s 2023 job vacancy rates ranged from 4.6% (in the seven-county metro) to 6.6% (in Northeastern Minnesota). Asche said he thinks this is because people who retired early have decided to rejoin the workforce and some of the challenges families faced finding daycare, leaving working parents at home, may have subsided.

But it’s not a complete recovery. “These are still really high job vacancy rates, even at 6%,” he said. “That’s insanely high.”

As of March, the job vacancy rate in the state was 5.1% — the same as the national average, according to the Bureau of Labor Statistics.

Asche said employers in areas with high vacancy rates are going to need to focus job recruitment on several areas: engaging highschoolers, providing good childcare programs, engaging residents and promoting a good quality of life.

That last factor – quality of life — has become more important than tax incentives and other financial incentives, he said.

A successful example, in his view, is Otter Tail County, where employers have been able to fill jobs. Based on an aging population, fewer people should be employed in the county than a decade ago, Asche said.