Workforce shortage new challenge for local business
Restaurant owner Phil Armstrong uses the word dire when describing the situation most businesses in Steamboat Springs face as they work to fill their staff for what he expects to be a robust summer.
“This time of the year, we usually get a quite a few applications and a lot of interest, but it’s like crickets out there right now, ”said Armstrong, who owns Destination Hospitality, a restaurant group that includes Aurum Food & Wine, Table 79 Foodbar and the Periodic Table in Steamboat Springs as well as Aurum Breckenridge in Summit County. “We’re just seeing a more dire situation than we have ever been faced with, hence our dramatic response.”
Armstrong said the escalating price of homes in our area, the lack of long-term rental units and the lack of traditional benefits in the restaurant business are all having a negative impact and forcing workers out of the hospitality industry.
He said there is not much he can do about the prices of homes, but he has leased a few housing units in Steamboat and Breckenridge. It’s not nearly enough to house his entire staff, but he says it’s a start.
He also recently announced he would start offering a benefits package, including health insurance, paid timeoff, paid sick leave, educational reimbursements, dinning discounts, team travel experiences, a long-term career path and wellness package.
“We can kick, scream and complain, but without taking action, we really can’t say anything,” Armstrong said. “So for the last two months, I’ve been working on rolling out this meaningful, comprehensive benefit package. I believe that we need to put our money where our mouth is and invest in meaningful solutions.”
The demand for good employees goes beyond the restaurants.
“I’ve seen the demand approaching for this summer, and I watched the struggles just in finding employees in general,” Mark Walker, president of Resort Group, said. “I thought we might have the perfect storm of a much larger demand for this summer and lack of supply in the workforce. I’ve been concerned about it for a while.”
Resort Group has 150 full-time, year-round employees, and that number grows to more than 330 in the peak seasons. He said the management company has lost key employees for several reasons, including landlords dramatically raising rent to others who have had their rental unit sold and had to move out. This despite the fact Resort Group offers some employee housing.
“We’ve had some turnover because of housing,” Walker said. “We have also lost some new employees that, after being hired, looked at their housing options and said they just could not find a place to live and certainly not a place to buy — the numbers just didn’t work.”
He realized the limited workforce has already impacted several companies that Resort Group uses to provide services, and he has had some landscaping companies tell him they would not be able to take a job this summer because they simply did not have the staff.
Jessica Valand, who serves as regional director for workforce development in Northwest Colorado, said the cost of living — in particular housing — continues to be the biggest challenge business owners face when it comes to hiring and retaining employees.
She said Routt County’s unemployment rate is 4.8%, which means there were roughly 800 people out of work in the county during the month of March. She said there were 1,000 distinct jobs advertised in that same period.
“Most of the jobs that we’re seeing in our system are customer service-oriented jobs,” Vahland said. “What continues to be a problem is that almost all of those jobs are lower wage jobs.”
She said those jobs, which range from the high teens up to $25 per hour, don’t pay enough to cover rent in the area, even for those that can find a long-term lease.
“I think many employers would argue that is a good wage,” Valand said. “But you can’t talk about wages as being good or reasonable without taking into context the living costs to be able to live here and perform that job. Twenty-five dollars an hour might seem like a very good wage from an employer’s standpoint for the work that they’re asking to be done, but it’s not if somebody cannot afford to live here on that.”
Both Armstrong and Walker believe the $300 in added unemployment compensation is also impacting workers’ desire to come back into the workforce. Both men have had applicants call and arrange an interview and then skip it or fail to take an offer. Armstrong feels that this is an effort to meet job search requirements to get unemployment. Valand doubts that is the case, saying that even with the federal benefit, that would likely only be about $600 a week.
Not feeling it, yet
Several of the area’s biggest employers have been able to fill their staffs but are concerned about the future impacts of the housing market on recruiting employees.
Natalie Grover, director of human resources at UCHealth Yampa Valley Medical Center, said the Steamboat hospital has about 58 open positions right now, but that’s pretty close to normal. She added the time needed to fill most positions has also dropped by about 30 days.
“We’re getting a pretty steady flow of applicants, but the biggest challenge — and we are having some difficulty — is in recruiting for hard-to-fill positions because of our housing market,” Grover said.
The booming housing market and the rising cost of a home has presented challenges because YVMC normally goes outside the Steamboat market to fill those specialized positions. This means that those getting offers must take the cost of a home into consideration before accepting,
“UCHealth (Yampa Valley medical Center) is one of the largest employers in Steamboat … and we have a very strong market strategy from our compensation perspective,” Grover said. “We have transitional housing, including seven condos that we have leased, to bring in candidates, and we have a very generous benefit package with a pension, which a lot of companies don’t offer.”
There is also the added stability of being a larger organization, which she said is always attractive for candidates of any level position.
Katie Jacobs, director of human resources for the Steamboat Springs School District, said the schools have not seen a lot of turnover this year and have hired a few new teachers to fill open positions that have been created by the addition of the Sleeping Giant school.
“Those who we’ve offered jobs, so far, are having some success moving into the area,” Jacobs said. “I know we will feel it, but I don’t quite know when. … We are definitely concerned about what is happening with the housing market and how that will impact our offers in the future.”
Most employers agree that finding employees moving forward is going to get more difficult, and they will need to be creative. For now, they are focused on their immediate needs.
“I think the demand for restaurants this summer is going to be insatiable,” Armstrong said. “I think that our only limitation is going to be the staffing. If I can’t fill my positions, we might need to curb our hours, which is sad when you think about it — not to be able to not meet the demand of your guests because you can’t staff your restaurant is something I really didn’t foresee happening. But I think it’s going to be a reality.”
To reach John F. Russell, call 970-871-4209, email jrussell@SteamboatPilot.com or follow him on Twitter @Framp1966.
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