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The problem with Omaha's low unemployment rate

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With an unemployment rate clocking in under 3 percent, nearly everyone in Omaha who wants a job has a job.

For some employers, that’s a challenge: If most people are spoken for, who’s going to fill all of the open positions? And how can the region recruit new employers if it’s seen as a tough place to find workers?

For restaurateur Greg Cutchall, the tight labor market means he acts fast when a good candidate comes knocking.

“If the right application comes in, even if we don’t have an opening, we hire them and find a spot,” said Cutchall, president of Cutchall Management Group, which owns nearly 50 restaurants across several states, including Jams, First Watch and a Domino’s Pizza franchise.

“It’s not like you get 30 applications and you can pick who you think is the best like you could 10 or 20 years ago,” he said.

It’s part of a broader national trend as the economy has recovered from the Great Recession of 2008-09. In July 2009, there were nearly 7 unemployed people for every one job opening in the United States, according to the federal Bureau of Labor Statistics. In March, there was one unemployed person for every job listing — the first time that’s happened since the government has collected this data.

That means it’s a job seeker’s market in many cases, including in the Omaha area, which is among the 10 cities of the country’s 50 largest with unemployment rates under 3 percent. (The national rate is 3.8 percent.)

“There are challenges when you get unemployment that low,” said Todd Dawson, managing partner of the Omaha office of WorldBridge Partners, a recruiting company that works with people in the finance, legal and medical fields.

In a recent survey of 500 Nebraska businesses, 21 percent of those that responded named labor availability and quality as their top issue — the second-most pressing issue among 13 listed. The top issue was customer demand.

To lure people to a new position, employers might have to pony up more money than if there were many people clamoring for a job. By the same token, a worker’s current firm might have to offer a raise to keep him or her from having a wandering eye.

We could be seeing that in data that show strong wage growth in Omaha over the past few years, with pay at private employers rising nearly 14 percent, good for the top spot over the 2014-17 time frame when compared with nine peers, including Austin, Texas; Des Moines; and Nashville.

Dawson said some employers are offering an extra week or two of paid vacation, paid day care, car allowances, bonuses and more company-paid benefits. That’s a turnaround, he said, from a few years ago when some employers were asking workers to pay more of their health insurance costs and cutting back on extras.

Not all companies are in a pinch. Clark Lauritzen, president of the First National Bank of Omaha, said the bank’s “hiring brand” has attracted good job candidates regardless of the ups and downs of the labor market, which he said was indeed tight.

Lauritzen said technology-centered jobs are the most difficult to fill. Among the strategies at First National, he said: hiring younger people and developing them and supporting programs at local colleges and universities that pump out graduates ready to go when it comes to tech jobs.

Eric Thompson, director of the Bureau of Business Research and an economics professor at the University of Nebraska-Lincoln, said the steep increase in wages over the past few years could indicate Omaha is succeeding at luring more technology jobs and other higher-wage occupations.

At Omaha-based Flywheel, Chief Executive Dusty Davidson said his company, which helps people build websites, has built a pipeline of good people — and not by typical job listings on a website.

The company hosted a recent “careers and beers” happy-hour event at Liv Lounge in Aksarben Village for potential sales candidates to meet with employees and learn more about the company.

Still, even though national statistics show the 1-1 ratio of jobs to job seekers, that doesn’t mean everyone is working: Some people don’t have the skills employers want.

Hiring for some roles, like software engineers, can be difficult in Omaha, Davidson said. The company, which helps build, launch and manage WordPress websites, has allowed for remote workers in some of those positions. About 30 percent of Flywheel’s staff of more than 100 work remotely — something more employers should be open to if they want to attract the best people, Davidson said.

Spreetail, an online retailer, has taken another approach. When the company began running into issues finding people quickly enough at its Lincoln headquarters, it announced an expansion to Omaha for a deeper recruiting pool.

The company has hired 200 people over the past year.

“Hiring definitely was a key reason we did that,” said Chief Executive Brett Thome. “We wanted to get out there and be able to recruit and hire faster.”

Lincoln’s unemployment rate, at 2.6 percent, is even lower than Omaha’s 2.9 percent reading.

The company offers a few perks to beef up its recruitment efforts: an equity program that awards shares of the company and a trip to Hawaii for employees who refer four successful hires. Another perk: $5,000 toward a down payment on a home once an employee has worked at Spreetail for two years. Thome said that helps people put down roots.

Such roots are what Omaha will need if it wants to continue to keep — and attract — a new generation of workers, said Thompson, the UNL economist.

For Omaha to continue growing its workforce, and to make sure its workforce has the skills that match the available jobs, it’s got to make sure it’s seen as a good place to start and grow a career.

Attracting good workers is such a challenge for local businesses that it’s one of the Greater Omaha Chamber of Commerce’s biggest focuses as it takes on a new five-year strategic initiative in 2019, said Dee Baird, vice president of economic development at the chamber.

The plan, “Prosper 2.0,” calls for 10,000 new or newly trained technology workers by 2024. It also aims to attract or help grow 250 new startups in the area, and $3 billion in new investment.

The challenge is twofold: first, making sure local universities and colleges ramp up their efforts to emphasize technology degrees and programs, and also recruiting new workers to the area from outside the state.

Baird said recruitment of workers outside the state will entail marketing the “We Don’t Coast” regional brand in markets where Omaha might already be on people’s radar — like, for instance, college towns where many Nebraskans attend school. The goal is to present Omaha as “a top-of-mind place for career opportunity and a place that’s cool to build your life,” Baird said.

If that and other similar efforts to emphasize quality of life are a success, it only will feed other successes, said Thompson, the UNL economist.

As cities grow, they tend to be more attractive to younger workers, as they’re likely to get bigger and better opportunities at the larger and more diverse pool of companies that flock to large cities versus the smaller fields in smaller towns.

The more companies that locate in Omaha, the more opportunities for more workers — not fewer, Baird said, despite the competition among companies to land the best hire. If a new tech company comes to town, for instance, workers there likely would consider opportunities with other companies already in Omaha down the line.

“People that we are trying to attract here with this skill set, they also need to know there are multiple employers where they have options,” Baird said. “If we can increase the number of people skilled in this area, bring people here with those skills, as well as the number of companies with those opportunities, everyone wins.”

And having a low unemployment rate shouldn’t deter those efforts, Thompson said, even as it pushes wages higher. The low rate says something about Omaha’s workforce, he says: It’s educated and hardworking. That can only attract more companies and more workers.

“It’s something of a badge of honor,” he said.

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