Minnesota's job market coming back slowly as companies remain cautious

Minnesota's job market remains depressed even after many restrictions on businesses have lifted as employers remain uncertain about the direction of the corona­virus pandemic and economy.

But there have been some signs of hope for the hundreds of thousands of Minnesotans put out of work this year.

Employers in the past few weeks began showing interest in hiring contract workers, Paul DeBettignies, a Twin Cities-based tech recruiter, has noticed. It's the same trend he saw coming out of the previous two recessions.

"They're unsure about where the economy is at and if this is really coming up the other side," he said. "So they'll tend to focus on temporary hires first because they have work to do. And when the economy is good, they'll start hiring full-time people again."

The federal jobs report released Friday showed that hiring in July slowed nationwide amid an uptick in COVID-19 cases. The nation added 1.9 million jobs, compared with 4.8 million in June, and employment was at 92% of the level it was before the pandemic.

Many forecasts indicate employment won't get back to pre-pandemic levels until 2022.

Minnesota added 84,700 jobs in June and 26,200 jobs in May, after losing more than 385,000 jobs in March and April. The next state jobs report, which will come out in a couple of weeks, will shed more light on what happened last month.

The number of job postings in Minnesota, which were down as much as 40% in late April and early May as many businesses shut down because of stay-home orders, have partly rebounded. By the end of July, job listings on Indeed.com were about 20% lower than a year ago.

"We definitely don't see a surge in job postings that would point to some sort of robust recovery in the short term," said Sean O'Neil, director of economic research for the Minnesota Chamber of Commerce.

Meanwhile, there have been large fluctuations in the kinds of jobs being advertised, said Erin Olson, a researcher with RealTime Talent, a St. Paul-based firm that closely monitors and analyzes job postings.

"We have these very volatile, very rapid and dramatic changes happening in employer demand from one week to the next that is specific to what is happening in each particular industry and how they're experiencing the pandemic," she said.

For example, there was a 500% increase in postings for baristas around the Twin Cities last month as coffee shops staffed back up again. Following the riots in late May, there was an uptick in jobs for insurance agents in June and July.

Overall, the one category that has seen an increase in job postings during the pandemic has been operations and logistics, which includes positions from FedEx workers to warehouse jobs at Amazon to delivery workers for Shipt or Instacart. Meanwhile, job postings in human resources have seen one of the biggest declines as many companies have put a pause on hiring, Olson said.

"We're at a point where there's maybe a little bit of a breath happening where employers are starting to open up, starting to rehire where they can and where it's most necessary," she said. "But we're not out of the woods yet."

Many of the job postings in recent months reflect the industries that had been hit hardest by stay-home orders coming back online, such as restaurants and retail stores, according to the Minnesota Department of Employment and Economic Development (DEED).

"It's some of these lower-wage jobs that were the first to go that are the first to come back," DEED Commissioner Steve Grove said.

But if things get worse, he added that there's a lot of swing potential with these kinds of jobs. "They're up and then they're down," he said.

In addition, jobs that employers had a hard time finding enough workers to fill before the pandemic — such as nurses, personal care aides, truck drivers and software developers — continue to be in high demand now.

Accurate Home Care, an Otsego-based in-home health care company with 750 employees, began offering $3,000 "welcome" bonuses to recruit new nurses in late April. It's helped it attract more workers, but the company still could use many more, said CEO Bill English.

"If I had 100 RNs or[registered practical nurses] show up in my parking lot today, I would hire all of them, assuming they all passed muster," he said.

Minneapolis-based Sezzle is among the companies that have seen a surge in business as its e-commerce platform that allows online shoppers to make payments in installments has gained more traction during the pandemic. So it's on a spree to add 35 software engineers to its roughly 100-person company in the coming months.

"We're in a fortunate scenario where things have been good for us," said Killian Brackey, the firm's chief technology officer. "But not everyone is in a fortunate scenario."

Many of the candidates Sezzle has been interviewing have either recently lost their jobs or are at companies that may be scaling back in coming months, he said.

St. Louis Park-based executive search firm Versique laid off a handful of employees in the spring after many of the companies it works for put their open positions on hold.

"It hit us hard," said Tony Sorensen, Versique CEO. "2019 was one of our best years ever. January and February was off to a great start — tons of jobs. Everybody was hiring. And then all of a sudden this happens and everything just like — boom. It stopped right away."

But in recent months, some of its job searches that had been frozen have been reactivated. It's been getting better every month, but is still a ways from getting back to pre-pandemic levels.

Companies still face many unknowns such as the outcome of the presidential election in November, when a vaccine will be widely available and how fast the economy will recover, Sorensen said.

"It's hard to get aggressive in hiring with those things still hanging over our heads," he said, adding that he expects to see more job openings at the end of the year or the beginning of next year.

When I Work, a Minneapolis-based firm that offers a scheduling software for businesses such as restaurants and hotels, let go of about 60 employees, or about 35% of its workforce, in April when stay-home orders directly affected many of its clients.

As business has rebounded, When I Work has begun slowly rehiring again. It recently posted about five jobs in sales as it looks for new growth opportunities in health care and logistics. Chad Halvorson, the company's founder, said it has received more applications for those jobs than it normally gets.

"We're expecting to hire probably another five to 10 folks" later in the year, he said. "But that will be predicated on how the economy fares and what happens in the fall."