AURORA, Colo. — In a country in the midst of sustained economic growth, Colorado has been ahead of the pack. Month after month of an expanding economy has resulted in some pretty good times for business owners across the Centennial State.
The state’s economy was recently ranked as the best in the nation by U.S. News and World Report, in large part to an expanding economic sector that has seen its gross domestic product grow at a 1.8-percent clip from 2006 to 2016, above the national average of 1.2 percent during that period.
But even the sunniest news isn’t without its share of clouds.
That expanding economy means businesses are looking for more and more employees to meet demand. With the state’s unemployment rate at 3 percent, more than a point lower than the national average and 10th overall lowest, employers are faced with a dilemma: how do they staff to keep up with expansion when there’s no one to take the job?
A nearly nonexistent unemployment rate might seem like the ultimate goal for an economy. But a vast majority of economists believe it’s important for an economy to have a pool of unemployed workers. When economies have rock-bottom unemployment, it restrains the ability of businesses to expand, which in turn puts the brakes on economic growth.
While staffing is an issue for a vast majority of business, three sectors in particular are feeling the crunch of low employment numbers: construction, food and beverage, and the health care industry.
The building industry has expanded its employee rolls by 6.7 percent over the past year, one of the fastest growing sectors in the state, with demand sky high for skilled labor. The restaurant business makes up 12 percent of the state’s labor force and sales have expanded since 2010 by 38 percent. And the health care sector is facing a major cliff as its workforce gets older and older. As more and more nurses retire, there aren’t enough new ones to staff the huge demand that is waiting out on the horizon as baby boomers start to retire.
With each industry facing its own unique set of problems in finding qualified staff to meet growing demand, the Sentinel talked with experts in all three fields to see how they hope to solve the growing employment crunch in Colorado.
It’s not hard to spot a construction site in the Denver Metro region. Cranes for downtown projects have become a near-permanent fixture in the skyline. And farther out from Denver’s center construction sites cluster around transit stations. Keep going east and homes are popping up like wildfire.
But there are hardly enough construction workers to fill all those sites.
“Labor is not keeping up with the change in the demand, unfortunately,” Michael Smith, who runs the Colorado Homebuilding Academy, put it plainly. “We’ve got a labor shortage.”
By 2025 Colorado is expected to see close to 100,000 open positions in construction and special trades, according to researchers at Colorado State University. A lot of those existing or soon-to-be open positions are due to an aging workforce, exploding industry and some fear of entering the construction labor force following the Great Recession nearly a decade ago.
All of that results in a lot of competition, Smith said.
“From the Gaylord hotel to the I-70 (road construction), we end up stealing (workers) from each other — and we need to stop that and start building a larger pipeline of people coming into the industry,” he said.
On most afternoons the Colorado Homebuilding Academy’s workshop in a north Denver industrial park is filled with a few dozen high school-aged students who want to go into the industry.
Gino Romero, who graduates in May, said in the future he’d like to have his own construction business. He’s known he wants to do construction since the first day he was introduced to the academy, he said. So far, he loves what he learns from Smith and the instructors — which is a little bit of everything, Smith said, pointing to some students working on a drywall project, others cutting lumber with saws.
They learn real skills, ones that they’d probably learn in the classroom and apply to the jobs they want in the future, Smith said. A math teacher from Wheat Ridge watching the students nearby nodded her head in agreement.
The academy also hosts classes for adults in the evenings. Both programs are a way to funnel more people into construction, Smith said. It’s not just about being outdoors on a construction site all the time, he added.
“If you want a job indoors, there’s probably one for you,” he said.
A construction worker shortage isn’t just a local problem. A top concern for builders in 2016 and 2017 was labor. A survey from the National Association of Homebuilders shows the issue has steadily been increasing, too. In 2011, 13 percent of builders rated labor issues an important concern. That increased to 30 percent in 2012, 53 percent in 2013 and eventually 71 percent in 2015.
Like Smith, other industry partners want to see more construction workers. Last week, Wolverine Boots visited the academy to fit every student with two pairs of work shoes as a part of the company’s Project Bootstrap, which has traveled to 12 cities in the last four years just to give out free boots.
“They’re keeping our country running every day,” said Devon Vanoostveen, a Wolverine spokeswoman. “And it often goes without a thank you.”
Smith said a part of his mission isn’t just to educate and help grow the workforce, but to help others do the same. Many schools want to offer a path into the industry, he said. They just don’t know how.
“Too often we hear our industry, we point the finger at schools and say you’re not doing shop class anymore and that’s why we have a problem,” he said. “What are you going to do to be part of the solution?”
It doesn’t matter if it’s a fast food franchise, a casual eatery or the finest of fine dining. Restaurants in Colorado, especially in the metro area, are having a hard time staffing kitchens.
A cursory search of job boards for companies like Illegal Pete’s or Red Robin shows a massive list of open kitchen positions that need to be staffed. And that demand is being felt from the largest chain restaurant to the smallest corner diner.
Many of the challenges facing the food and beverage industry in the state are the result of too much of a good thing. Colorado’s restaurant market has been one of the fastest growing in the nation with sales topping $12 billion in 2017.
“Last year we had 245 restaurant openings just in the metro area. And that doesn’t include quick service restaurants, it doesn’t include a lot of chain restaurants. That number is primarily the independent ones,” said Carolyn Livingston, spokeswoman for the Colorado Restaurant Association. “All indications show we’re growing. Maybe not at the pace we were growing a year or so go, but we’re still very much on an upward trajectory.”
The large growth of the industry, coupled with an expanding customer base from the state’s growing population, is driving the demand for new dining options. But just because there’s demand doesn’t mean the industry can meet it.
For example, real estate developers are reaching out to chefs and restaurant groups and offering them a space for a new location in their projects, Livingston said. But finding a space for a new restaurant isn’t the big challenge, it’s finding the staff.
“Many are asking the developers if the space also comes with a staff,” Livingston said. “They are all asking: How am I going to operate it without people?”
Some of the difficulties in finding potential employees for kitchen work is that not just anyone can walk in and start working the grill or even food preparation. The vast majority of positions needed to be filled at restaurants require training and experience. Line cooks have on average about 1.6 years of experience, according to the National Restaurant Association. Sous chefs need about 3.14 years of experience. All of that means that anyone who has the necessary skills is in high demand. That demand is very apparent to the culinary students at Johnson and Wales University in Denver. More than 200 employers have a presence on campus, competing for about 1,200 students, said VA Hayman Barber, the school’s director of Experiential Education & Career Services.
“That goes to show where that demand really is,” Barber said. “Five years ago, companies would come and recruit but they wouldn’t have as much in their back pockets to offer students as incentives. And now they have so much more to try and offer.”
Demand for skilled workers has created something of a bidding war, but restaurants aren’t relying on just increased wages to draw in new talent. A major reason for that is restaurants operate on razor thin profit margins, Livingston said. Paying everyone more means customers are going to be paying more. And with the new minimum wage laws, profit margins are being squeezed even further.
“The challenges facing restaurants is not only finding qualified workers but also figuring out how to pay for it,” Livingston said. “Restaurants operate on razor thin profit margins of about three to six percent. If you increase wages, that drives up the cost. Will you will chase your customers away if they won’t tolerate a $14 hamburger? It’s a real balancing act as they look at different ways and equations to make it work for them.”
Livingston and Barber both said businesses are trying to incentivize workers with things besides higher pay, offering perks like education reimbursement, transportation reimbursement and in mountain resorts, housing assistance. They’re also offering opportunities for professional development and creating a company culture that helps not only draw in new employees but retain the current staff are well.
And groups such as the Colorado Restaurant Association are working on initiatives like apprenticeship programs to help increase the number of future employees in the training pipeline.
But even that can only go so far in helping restaurants keep skilled labor. Rising rents in the metro area mean that even if a line cook is making top dollar, they still might struggle to find a place to live, Barber said.
Livingston said each restaurant has to work to find a balance in trying to address staffing issues. For some, that might mean finding ways to use technology to help deal with shortages. For others, that might mean filling less shifts and offering fewer business hours.
“Everyone is looking at a way to do it. There’s no magic bullet,” Livingston said. “They have to figure out the best equation.”
IS THERE A NURSE IN THE HOUSE?
With more than 7,000 employees, University of Colorado Hospital on the Anschutz Medical Campus is among the city’s biggest employers.
According to the Aurora Economic Development Council, the hospital and the adjacent University of Colorado School of Medicine — where many hospital staffers also teach classes — rank behind only Buckley Air Force Base in terms of total employment.
But even with thousands of nurses, doctors, administrative staff and others coming and going from the booming hospital each day, they’d like to add significantly more people to their ranks.
Doing that, though, is proving especially challenging.
“I think this is the toughest hiring climate we have had,” said Ben Wankel, vice president of human resources at the hospital and a 13-year-veteran of the hospital.
Wankel said today the hospital has about 500 open positions and while the hospital is always looking to add employees, he said the 500 figure is high for them.
The toughest spots to fill are nurses to work in the operating room. Across the country, hospitals say they are coping with a significant nursing shortage and UCH is no different.
To land those expert nurses, Wankel said the hospital has offered $10,000 bonuses, but they are still looking for more.
“Our competitors were quick to match it,” he said.
The hospital is part of the fast-growing UCHealth chain of hospitals, which now has major medical facilities in Colorado Springs, Fort Collins and several other Front Range communities.
Wankel said that in all, there are more than 21,000 UCHealth employees statewide.
That can help with the hospital’s recruiting pitch, he said, because it means hospital staffers who might not want to live in metro Denver — where real estate prices are high and maybe city living feels a little crowded — can consider other UCHealth facilities.
Having those other hospitals also means ample opportunity to move up in the organization, another factor he said can help sway new employees to sign on.
And being in Colorado — a state that has little trouble luring transplants — certainly helps, too, he said.
“Getting them to Colorado is not a tough sell,” he said.
But UCH is hardly the only hospital around, and it’s not even the only major hospital on its campus. That means battling other hospitals for a finite number of prospective employees, but Wankel said the struggle goes well beyond the medical field.
In the hospital field, even some of the lower-paying positions — those in the $12-an-hour to $20-an-hour-range — still require licenses and some specialized education.
In those cases, for surgical technicians or the staffers who sterilize equipment, Wankel said he isn’t just facing competition from other hospitals, he is facing competition from unrelated fields.
One of the big competitors, he said, are the new Amazon facilities in the region where employees can land good paying jobs but might not need the sort of certifications they’d need to work at UCH.
“People are trying to decide between, do I take on additional debt for my career, or do I go across the street for something completely different,” he said.
At Parker Adventist Hospital, Chief Nursing Officer Maribeth Trujillo said they have 26 openings for clinical nurses.
That number isn’t too high, she said, and is lower than it was before they brought on a dozen new nurses this month.
“We are actually in pretty good shape today,” she said.
Facing the same nursing shortage UCH and other hospitals around the country are grappling with, Trujillo said a few years ago the hospital near Parker Road and the E-470 toll road opted to lean more on recent nursing school graduates than they had in previous years.
Now the hospital has clinical nurse scholars on staff who will help those recent graduates transition into the job.
“That ongoing support for a full year will help those nurses to really succeed and become loyal to Parker,” she said.
Trujillo said she has been in nursing in Colorado for 30 years. It used to be that hospitals could sell new hires on the “Colorado lifestyle,” but that is less and less effective, even with starting nurse wages at Parker hovering around $28.
“Unfortunately right now, in general, the nursing wages across the state have not kept up with the cost of living,” she said.