May marked the 18th consecutive month that Idaho’s unemployment rate fell at or below 3 percent.
The statistic is far below the “sweet spot” of 5 percent nationally that creates healthy churn in the labor force, said Craig Shaul, research analyst supervisor at the Idaho Department of Labor.
“That 2.8 is extremely low,” Shaul said. “We’ve been under 3 percent for over a year now and 4 percent for three years.”
Companies are struggling to fill open positions as a result. From 2016 to 2026, the Department of Labor projects a shortfall of 41,000 unfilled and unrealized jobs because of the state’s labor shortage.
In addition to a shortage of workers, many industries are experiencing a lack of skilled workers. The tech industry, which generally requires a college degree, and construction, which requires certification programs, have been hit the hardest. Both are forging their own training programs and building their own talent pipelines to train enough workers to meet demand.
Responsibility for solving this issue lies with businesses, higher education institutions and the state, former Idaho Gov. Butch Otter’s 2017 Idaho Workforce Development task force concluded. The three sectors are creating partnerships and training programs seeking to fill the gaps in the talent pipeline.
“You can’t just order a workforce and expect Amazon to deliver it to you,” Shaul said.
Building their own talent
The construction industry was the first to report a lack of workers to the Idaho Department of Labor, Shaul said, and has since felt it the most.
“We saw this coming about three years ago,” said Teri Ottens, executive director of the National Association of the Remodeling Industry of Idaho. “Even three years ago people were starting to see the lack of skilled tradesmen.”
The association recently received $30,000 from the Department of Labor to create carpenter apprenticeship programs for young adults. Currently, 10 apprentices are working at least 35 hours a week and receiving three to four hours of instruction to learn the job.
“We did ourselves a disservice when we started telling students and their parents if their kids don’t go to college they failed,” Ottens said. “We’re starting early to get them interested, let them know they don’t have to go to college if that’s not what they’re comfortable doing.”
The apprenticeship is one of several programs — the biggest programs are construction, health care and water treatment fields — the Department of Labor is funding to help employers and job seekers fill skills gaps and train for positions that pay more, Shaul said. In a state where the labor market is so tight, you have to “squeeze as much out of it as you can,” he said.
The Brookings Institution recently released a report on growing cities and noted a decline of over 4,000 jobs in the construction field in Boise from 2007 to 2017.
Construction companies have reported having to pass on projects because they don’t have enough workers to do them, Shaul said.
‘Next to none’
The more skilled the worker, Shaul said, the harder they are to find.
“(Tech and construction) are experiencing the same thing,” he said, “but different flavors of it.”
Nathan Mueller, co-founder and CEO of Meridian-based software firm Zennify, said the tech industry is facing an “incredibly restrictive market” in Idaho.
“The availability of (high-tech workers) on the open market right now in Idaho is next to none,” Mueller said.
According to the Idaho Department of Labor STEM Action Center, more than 7,800 science, technology, engineering and math jobs are unfilled in Idaho. About one-fifth of those jobs have been open for over 90 days.
Angela Hemingway, the executive director of the STEM Action Center, said Idahoans are losing out on significant income dollars.
Based on the number of unfilled jobs in 2018 and median earnings of a STEM job ($31.37), Hemingway said, Idahoans saw a loss of about $413 million in unclaimed personal income last year.
“We are seeing some incredibly significant losses to personal income that Idahoans could be earning if those jobs were filled,” she said.
The most in-demand occupations — with the largest number of unfilled positions — include registered nurses, software developers, engineers and construction workers.
Even poaching workers from competitors isn’t filling the openings, Mueller said. The best approach for Zennify has been to build its own talent market.
“That’s the missing thing in the valley. We have a lot of companies that need the same talent — we can cannibalize each other here and there, which doesn’t seem to be solving the problem,” Mueller said. “But when you’re a for-profit company, it’s somewhat your responsibility to train people that you need.”
The company has been working on developing training paths for employees to learn the skills they need to move into higher positions.
“Everyone asks why colleges aren’t ramping up tech degrees,” he said, “but seems like the education system is doing as much as it can possibly do.”
The Brookings report suggests that Idaho’s higher education institutions are not keeping up with talent demand. Despite the number of in-demand degrees growing, universities can’t keep pace with the Boise metro area’s growth.
“Among Idaho’s 18-24-year-olds, 6.6 percent have a college degree compared to 10.5 percent for the entire country,” according to the report. “More people with advanced degrees will raise the likelihood of high-tech clusters staying, especially if they mirror the needs of the existing industries.”
Creating a pipeline of in-demand workers starts long before the college years. In 2017, the Idaho Workforce Development Task Force concluded the K-12 education system needs to better connect students with careers by encouraging career-technical training and work-based learning.
Clark Krause, executive director of the Boise Valley Economic Partnership, said companies considering coming to the Treasure Valley are asking the same question: What types of partnerships can be established between companies and higher education institutions to build a talent pipeline?
“There’s no one in a healthy city right now that’s not experiencing the same hiring phenomenon,” Krause said, “Mid to smaller companies need to be looking strategically at how they are training talent for the future.”
One partnership he mentions to prospective businesses is a Paylocity program with Boise State University. Paylocity is an Illinois-based online payroll company that expanded to the Treasure Valley in 2017.
The Computer Science Department at BSU is involved with tech companies — from running internship programs and research projects, to inviting company heads to sit on the department advisory board and help shape curriculum, according to Amit Jain, Ph.D., department chairman. Those companies, including Micron Technology, HP and Clearwater Analytics, also give feedback to the department on the hires they’ve made from the university.
“All of this benefits the students because the more we interact with companies, the more we are aware of what’s happening in the field and the more we can be informed,” Jain said. “And with the connections we can help place students, not all students are a good fit at every company.”
But although the department has quadrupled in the last four to five years — going from 25 graduates to more than 100, Jain said — it is still not enough to fill all the jobs that the tech field needs.
“Is that enough? I don’t think so. Because those students are going into entry-level positions, but companies need everybody,” he said. “They need entry-level people, mid-level and the experienced level. I think the hardest thing in the past has been hiring that experienced level. But right now all the levels are hard to hire.”
Although BSU offers the biggest local pipeline for talent to these companies, he said, it is still not big enough to keep up with Boise’s growth.
Funneling existing Idahoans into job opportunities can only go so far, Shaul said.
“Natural growth inside the state cannot solve this problem,” he said. “They have to seek workers outside their borders. The question then becomes how far outside.”
When the environment becomes so competitive, Shaul said, it’s up to businesses and even the state to attract workers from outside of Idaho.
The Brookings report made a similar statement: “The state must look outside higher education and beyond state lines toward reskilling workers and attracting talent to meet the demand and to retain and grow sophisticated industry.” The report suggests creating specialized programs outside of regular four-year degrees, in line with the suggestions of the workforce development council.
Mueller said he has had success hiring remote employees, then encouraging them to move to Idaho.
“While the economy is so good here, it’s a desirable place to live,” Mueller said. “So you can hire remotely and sometimes convince people to move here.”