As shoppers migrate online, Hy-Vee wages fight to draw tech talent to Iowa

GRIMES, Iowa – In the Twin Cities and much of the Midwest, Hy-Vee Inc. is expanding and has big plans to compete as some shoppers migrate from aisles to apps.

To drive those ambitions, the company last year opened a new office outside Des Moines for IT workers that is one of the most imaginative in the region. Called the Helpful Smiles Technology center, the $5.2 million sprawling, generic building belies an interior so cool that it looks like it was designed by Disney.

Hy-Vee is hoping the facility will help it attract talent to a city and state not known as a tech destination but that has data outposts of companies like Facebook and Microsoft and a lower unemployment rate than Minnesota.

"There's no doubt that it helps to have a state-of-the-art facility such as HST to attract and retain quality employees," said Matt Ludwig, the company's chief information officer. "We had to keep up or risk missing out on the talent pool."

The name comes from the jingle, "Where there's a helpful smile in every aisle," an earworm for everyone who grew up in Iowa. As consumers make a transition from traditional supermarket aisles to apps, websites and click-and-collect programs, Hy-Vee needs hundreds of IT employees to keep growing.

The employee-owned company, based in West Des Moines, has about $10 billion in annual revenue and 245 stores throughout the Midwest.

Hy-Vee executives visited Twitter and Pinterest offices in San Francisco for inspiration while designing the building. The center — which at 104,000 square feet is just a bit larger than Hy-Vee's biggest stores — now houses 300 information technology, accounting and marketing employees, including 60 hired in the last 12 months.

An area dubbed Central Park is a lush green space dotted with Adirondack chairs and games like the beanbag toss. A full-service Starbucks also functions as a barista training ground, a permanent food truck includes daily specials for breakfast and lunch, and snack areas called Megabytes and Gigabytes offer free fruit and nut mixes and Bevi water.

"The food truck in Central Park with the living wall of plants and the pictures of the skyline make you feel like you're having lunch in Times Square, not a cafeteria in a gray box " said John Kalish, manager of the data science team at Hy-Vee.

There are exercise rooms for yoga and Pilates, a walking track, foosball, shuffleboard, 61 TV screens, darts, pingpong tables and a basketball court. And those squeaky clean private, single-user restrooms in Hy-Vee stores? HST has them too, complete with showers for use after workouts.

The Midtown section of the center is where workers get down to business. Work spaces are open to encourage collaboration. "It's important to have a space that isn't confining," Ludwig said. "A space that allows people to gather, think freely and creatively."

Austin Lyons, who has worked as a product manager at Hy-Vee's HST for a year, said the company delivered more than a building. "It's a culture," he said. "It's a group of people who are collaborative and intelligent."

The building has 26 private conference rooms named after video games for the meeting-heavy job demands, but much of the common space is designed to blur the lines between work and play. There's a replica of the living room set from the TV show "Big Bang Theory" that's used for informal meetings. Walls, room dividers and countertops often function as whiteboards. There's also a bar with beer and root beer on tap.

Like any employer, Hy-Vee wants to attract top talent, but available workers are scarce in Iowa with a 3.1 percent unemployment rate. And all Iowa companies are facing new competition as companies like Facebook, Microsoft and Apple build data centers in the state. The centers employ relatively few people but the firms offer top pay and benefits.

Many potential tech workers, especially those without a connection to the Midwest, pass places like Des Moines by in favor of larger metropolitan areas and higher salaries elsewhere.

And it's difficult to attract workers from out of state when salaries are less than the national average, said David Swenson, an economist at Iowa State University in Ames.

According to Glassdoor.com, a national salary tracking site, the average IT job in Iowa pays about $52,000, which is 16 percent less than the national average. Hy-Vee's IT employees fare better, with a range of $52,000 to $95,000, according to Payscale.com. While Hy-Vee can't match IT salaries in Silicon Valley, the cost of living in Iowa is considerably lower than northern California.

Lyons moved from an IT job in Austin, Texas, which also had an open, collaborative workspace with a relaxed dress code.

"The cost of housing, transit and parking in Des Moines is half what we paid in Austin," he said. "We bought a fixer-upper in Austin for $350,000 that needed a new roof. We bought a four-bedroom place in Waukee [near Des Moines] for a little more than half that price and all we had to replace was a doorstop."

Kalish, who moved to Des Moines from Boston, luxuriates in the easier lifestyle. "My commute time went from 55 minutes to 12 minutes," he said. "I can go eat in downtown Des Moines and park across the street from the restaurant for free or $5 during an event. In Boston, it was a 10-minute ordeal to find parking that cost $12."

Hy-Vee executives said they recruit nationally but that most of the workers at its tech center are from Iowa.

"Many Hy-Vee leaders worked their way up the ladder starting in the stores,' Ludwig said. "But that's not always the case in this space. We hire the kids out of college and tech schools."

That's why HST's building designers incorporated subtle reminders throughout that they work for a supermarket, not a software company. Glass walls on four of the conference rooms are frosted to show the skylines of Hy-Vee's largest markets — the Twin Cities, Des Moines, Omaha and Kansas City. Look closer and the individual skyscrapers make up UPC scan bars from Hy-Vee's private-label products.

Hy-Vee's branded shade of red pops up on walls and doors throughout the center. The doors above conference rooms have lights from checkout lanes to indicate when the room is in use. Hy-Vee shopping cart handles have been repurposed as drawer and cabinet pulls.

Lyons said those reminders insure that he doesn't forget the end customer. "I tell my family that I'm finding ways to make Aisles Online [Hy-Vee's online shopping site] faster and better," he said.

After working in New York and Boston, Kalish said the Helpful Smiles Technology building more than satisfies his professional needs. "There's no other place like this in Des Moines," Kalish said. "There's no Google here, but it's the same caliber as those high-tech places. I talk to people all the time who say they'd like to work here."

John Ewoldt • 612-673-7633