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Tag: Colorado Labor Market

Colorado’s Labor Market Paradox: Plentiful Jobs, Mismatched Talent

At a mere 2.8 percent as of June 2023, the unemployment rate in Colorado is notably lower than the national rate of 3.6 percent. 

While the state rate remains close to an all-time low, it masks a paradox in the current labor market that started three years ago. Jobs are plentiful, so is talent, but there’s a mismatch.  

Nothing new: The status quo for the last three years is no status quo. 

READ: Veteran Unemployment — Untapped Workplace Resources

“It’s just been a wild ride since COVID,” says Dana Harris of DMarie + Co., a Denver-based firm focused on the placement of human resources professionals. “2020 was a horrible year, and then 2021 came back with a vengeance, because all those positions that had been put on hold opened back up. I couldn’t keep up. I hired a couple people and I was doing splits with other recruiters. I was doing anything and everything I could to keep up with the demand.” 

In 2022, the breakneck pace started to slow for DMarie + Co. “Here we are in 2023 and now it’s definitely a company’s market again,” Harris says. “It’s not a candidate’s market. Things are definitely softening.” 

Her educated take: “We’re not going to go into a full-blown recession, but it’s going to be a soft market until the end of the year.” 

Some segments of the market are doing better than others. “Construction and health care, I feel, are the two industries that are still doing well. Besides that, tech has gotten slaughtered. A lot of startups are really struggling right now, and even if they’re not struggling, they’re still putting positions on hold because everybody is so uncertain. Nobody knows what is going on with this market right now, so I think it’s just going to be a bit of a guessing game until the end of the year.” 

READ: Top Company 2023 — Startups

Harris advises clients to ignore the headwinds. “I tell people right now, especially my construction clients, ‘If you want to hire, the best talent is out there and ready to make a move,’” she says. “Companies that are thriving right now and hiring, they’re going to get the best talent.” 

Denver-based High Country Search Group has placed more than 7,000 people since its 2002 founding, and about 600 people annually in recent years, says founder Monte Merz. 

After launching with a focus on finance and accounting professionals, the firm expanded into oil and gas, contract accounting, technology and private equity. The focus of the 30-recruiter firm is on Colorado, but many of the industries involve recruiting on a national or global level. 

“You like to think you’re an amazing recruiter, but you can’t control everything,” Merz says. “There are either too many people and not enough jobs or too many jobs and not enough people. There’s never that balance. It’s like the farmer: too much rain, not enough rain.” 

The 2023 forecast looks good on paper, he adds, but reality is stormier. “You can’t have a down economy with 3.5 percent unemployment. That’s never happened before, but here we are.” 

Within that, every industry has its own unique wrinkles. “Energy can be violently down or violently up,” Merz says. “That’s just an occupational hazard of being involved in the energy industry. Technology is the same way, not quite as violent, but right now, they’re having the toughest time economically.” 

The firm’s contract accounting group has dropped in numbers, but not because of volatility. “If they’re good, they get hired right away,” Merz says. “I think the great Beyoncé once said, ‘If you like it, put a ring on it.’” 

While salary growth largely outpaced inflation in 2021 and 2022, that has cooled in 2023. For accounting and energy jobs, however, a lack of supply on the candidate side has added fuel to the fire. “People have just gotten so tired of the feast and famine,” Merz says of the diminished talent pools. “This is the demographics of not that many people in finance or accounting playing into it. 

“That’s why there’s more conflict this year. Last year, everybody just needed people. It was a perfect storm of coming back from COVID, the economy was rolling with money everywhere, and the demographics were kind of pulling people away. All of those things contributed to: ‘You want somebody. Well, you better pay for them.’” 

READ: How Colorado Can Make “The Great Reset” a Reality for a Disrupted Talent Pipeline

Merz says 2023 is “about 85 percent” of 2022 for High Country Search Group. “This is maybe more Goldilocks. Last year was a little overheated.” 

Porridge aside, many candidates are no longer flexible about where they’re willing to work. “That literally gives us heartburn,” Merz says. “We literally have to ask every person, ‘Are you fully remote, are you fully in-office, or are you a hybrid?’ because you have to match that up with the client.” 

His advice to hirers? “I would recommend being as flexible as possible, because that’s your competitive advantage. If you insist on people coming in, just realize you’ve eliminated a certain number of your potential candidates. That’s just how it is.” 

In the end, it comes down to three big questions, Merz adds. “What are you going to pay me? How am I going to be working? And what are we doing, what’s the company?” he says. “That’s what people are looking at. Ignore any one of those three at your own peril.” 

READ: Guest Column, CEO of Atlas Real Estate — Is Working Remote Worth the Missed Opportunity?

And, while Colorado is attractive to many candidates, the cost of living means that about 30 percent of your salary is “paradise tax,” Merz says. “If you want to make an economic decision, move to Omaha, Nebraska, where I’m from. It’s cheap cost of living and they pay pretty well. It’s a very good tradeoff.” 

He adds, “California people, when they’re dipping their toe in the water, usually don’t make the move, because it doesn’t make sense economically.” 

Dave Bacon started BWBacon Group, a Denver-based technology staffing firm, in 2001. He sees a lot of similarities between that year, in the wake of a tech bubble deflation, and 2023. 

“Things have slowed down a lot, especially in tech,” Bacon says. “In these last few months, I’ve never had so many people apply for jobs through our website. I have people crawling out of the woodwork reaching out to us on LinkedIn. 

“In my view, a lot of companies over-hired and overpaid over the last couple of years, and in the meantime, you have a more challenging environment with startups, where interest rates have gone up. It’s not exactly free money anymore.” 

It follows that BWBacon’s placement volume is “significantly down” in 2023, especially when it comes to software engineering jobs. But not everything is down: Cybersecurity and telehealth remain strong, and candidates with experience in artificial intelligence are in high demand across industries.  

“Our overall executive- and director-level positions are interestingly up and we’ve had a lot more confidential searches this year than normal, probably two times the amount,” Bacon says. “Top-level talent is still really hard to find. Most people that are of that caliber didn’t get let go. You’ve still got to go and find those people.” 

Many companies have cut their internal HR teams, opening a potential door for BWBacon. “We had a client the other day that said they had one open position and they received 750 applicants. How does a small business like that sift through 750 people? Should they just outsource that to us?” 

These kinds of ebbs and flows come with the territory. Harris jokes that she’s “been through this 80 times in 13 years now,” but notes that job-seekers have it the hardest. “What I’m seeing a lot of right now is just emotional exhaustion,” she says. “I’m empathizing with a lot of these candidates right now, because it’s tough. It’s been a tough three years.” 

 

Denver-based writer Eric Peterson is the author of Frommer’s Colorado, Frommer’s Montana & Wyoming, Frommer’s Yellowstone & Grand Teton National Parks and the Ramble series of guidebooks, featuring first-person travelogues covering everything from atomic landmarks in New Mexico to celebrity gone wrong in Hollywood. Peterson has also recently written about backpacking in Yosemite, cross-country skiing in Yellowstone and downhill skiing in Colorado for such publications as Denver’s Westword and The New York Daily News. He can be reached at [email protected]

Empowering Young Professionals in a New Era

In the times of the pandemic job market, even recent college graduates entering the workforce have considerable choice as many companies compete to attract and retain talent.

The COVID-19 pandemic has intensified existing issues around wages and working conditions, and the Great Resignation has challenged employers to respond to employee demands for more from their job.

For this new generation of employees, a competitive salary is no longer enough. They expect to find both personal purpose and growth opportunities in their careers. The resulting divide — what Center for the Future of Work calls “The Purpose Gap” — reflects a widening split between what younger generations expect from their employers and what they actually get.

“Colorado’s labor market reflects this new reality, with workers feeling burnout or general job dissatisfaction choosing to pursue more fulfilling roles.”

For many employers, addressing the Purpose Gap continues to be an elusive undertaking with many of them simply missing the mark, as 55.3 percent of recent graduates with a bachelor’s degree or higher left their jobs within a year.

This divergence marks a critical moment for employers, who now must approach recruitment in a more holistic way. This inclusive approach requires that new employees are given the opportunity to engage with all sectors of the business in order to understand the company’s wider purpose and their own role in it. It also means employers need to invest at the outset in employee education and training.

Colorado’s labor market reflects this new reality, with workers feeling burnout or general job dissatisfaction choosing to pursue more fulfilling roles. Exemplifying this recent trend, the state led the nation in the number of people quitting jobs in October of 2021, at an all-time high of 4 percent.

The peak of the quit rate coincided with a notable growth in job openings, facilitating many employees’ transitions to improved working conditions and higher wages. While young professionals are inundated with choice as the number of job openings surge, the pandemic has obscured the already difficult transition from college to the professional world.

For example, many recent graduates have not developed a meaningful grasp of their own professional strengths and weaknesses or even what role would best build upon their existing knowledge and skills because they do not have real-world work experience.

Denver-based Shelton Capital Management, a $4 billion asset manager where I serve as Human Resources and Operations Manager, was not immune to this trend and experienced turnover as the pandemic set in.

“The Shelton Academy can help bridge the gap between academia and workforce by equipping young professionals with a holistic understanding of business in a way they would never get through an entry level job.”

But we worked to address the internal and external factors that were impacted by changing employee expectations, resulting in the Shelton Academy — a program for entry-level candidates that seeks to address the growing demands of job seekers. The program is an 18-month, full-time, paid opportunity for recent graduates interested in starting their career in the financial services industry.

More than simply offering these graduates a foot in the door, Shelton Academy provides its participants with a broad set of skills and hands-on experiences from operations and client service to sales and marketing.

Therein lies the value of our program. Each candidate will split their time between each department in order to not only understand how each segment contributes to the overall success of the business, but also consider which role they excel in and may be interested in pursuing after the completion of the program.

In addition to work experience in each segment of this business, the program also empowers its participants through investing in their education. Those accepted into Shelton Academy will receive resources and training to obtain the FINRA Series 7 and 63 licenses, education necessary for those with the intention of continuing their career in the financial services industry.

The dreaded entry job could be on its way to extinction. Real exposure to a variety of different departments and positions early on in one’s career could be instrumental in empowering young professionals to take control of their future. Investing in programs like the Shelton Academy can help bridge the gap between academia and workforce by equipping young professionals with a holistic understanding of business in a way they would never get through an entry level job.

 

Shelton Capital ManagementAmy Grilliot is the Human Resources and Advisor Operations Manager at Shelton Capital Management, a $4 billion Denver-based asset manager.