Talent recruiter says Minnesota health tech firms face daunting labor shortages

Minnesota is famous for its dense cluster of health-technology companies, which employ 67,000 workers and indirectly create work for another 100,000. But talent recruiter Paula Norbom said she thinks the state's legacy could be tougher to sustain in coming years because of a coming shortfall in qualified workers. Norbom is founder and president of Talencio, a contract staffing and retained search firm based in Minneapolis' North Loop neighborhood that focuses on health technology and health care. Norbom said that U.S. colleges and government initiatives are not producing enough skilled med-tech workers, and immigration programs like the H-1B visa system can be refocused to bring in international talent with the skills Minnesota tech companies need.

Q: As a talent recruiter, what do you see as the biggest challenge facing Minnesota med-tech companies in the next five years?

A: The biggest challenge we are going to see is in staffing, and having enough employees to fill the need of the industry in the next five to 10 years. A number of factors are leading to that, including increased regulation in the industry, increased complexity, and the likely repeal of the medical device excise tax. All of that is fueling the need for additional talent. And the industry is growing — in med-tech, at 5.2 percent per year. Pharma is growing an estimated 6.1 percent, year over year. So we are seeing big increases in growth, and then we are also seeing factors affecting the need for more talent.

Q: Would you say it's a crisis?

A: I don't believe it's a crisis right now. It will be a crisis if we don't address it.

Q: Describe the kinds of Minnesota med-tech jobs that are ripe for shortages in coming years.

A: They are high-paying jobs. On average, in medical technology alone, the average salary plus benefits is $117,000 a year. They are engineering jobs, they are regulatory jobs, they're clinical research jobs. They're scientists. They are marketing folks that have a deep understanding of how devices and pharmaceuticals get marketed.

Q: What's driving the high demand for med-tech employees?

A: It's being driven by the factors I just listed, but demographics also impact it. We are seeing an aging workforce. The baby boomers right now are retiring. And there is not that younger workforce behind it that is large enough to fill the void that the baby boomers are leaving.

Low unemployment is affecting it as well. Minnesota has one of the lowest unemployment rates in the nation. So we've already got low unemployment, and Minnesota also has a high labor participation rate, one of the highest in the nation. So, everybody who can work is already working.

Q: Is the solution to graduate more science and technology students?

A: Currently the universities are not churning out enough students that have STEM-related degrees (science, technology, engineering and math), or technology experts.

Q: Are you talking about Minnesota schools?

A: Universities in general are not churning out enough students. And the students who are graduating, they want to work for companies that are larger, where they can see more upward mobility than at small companies. But the small companies are where the vast majority of innovation takes place. That is creating another challenge as well.

Q: Can the problem be solved by graduating more students from colleges in the U. S.?

A: There is additional work that universities can do. But another component is immigration. H-1B visas are a popular way to get individuals who have STEM degrees here in the United States to work for the companies that are in health technology. Last year, H-1B visas were limited to 85,000 visas. But the rate of applications was three times that. So we had a shortfall there. And what we need to do is bring more individuals in who have the talent and the skills that are needed in the industry, but be very picky about who we bring in.

Q: Do you think the anti-immigration sentiment in political circles right now could make it more difficult to address a personnel shortage in med-tech?

A: From what I'm reading right now it seems that the legislation that is being presented is going in the right direction. For instance, if you can increase the number of H-1B visas and we can have a preference system that is looking at the right talent, I wouldn't be averse to bringing in talent from outside the U.S. to address some of the needs we have here.

Q: In the past you've mentioned initiatives like the federally funded Minnesota Medical Manufacturing Partnership and GreaterMSP's "Make It. MSP" program, which spread awareness of the market and the jobs here. Are there other steps available to people already in the industry?

A: Another way we can address the shortage is trying to find a way to keep baby boomers in the market longer. Right now they are retiring at pretty normal rates, that we have historically seen. But if we can keep in the market longer, that would be good for everyone.