Vail Valley reports ultra-tight labor market
Vail CO, Colorado
EAGLE COUNTY, Colorado ” Scott Wirth thought he knew what he was getting into. Even he’s surprised at how hard it is to find, then keep, good people.
Wirth bought Vail Valley Ace Hardware in Vail in May of 2006. He had a plan, to treat his employees right, recognize their good work and offer good pay and benefits.
“But it’s been tougher than I thought it would be,” Wirth said. “It’s still doable, but we spend more on employees than the average Ace store. We have to run a lean, efficient business in order to stay in business.”
Wirth isn’t alone.
A report conducted last fall by the county-funded Economic Council of Eagle County surveyed business owners’ on topics including their attitudes about the local economy, how they believed their businesses would do in 2008 and how they’re doing recruiting and keeping employees.
Most of the reports charts and graphs are pretty straightforward. In the weeks before talk of a national recession started dominating headlines, most business owners believed their 2008 would be as good as, or perhaps better than their 2007.
The story changes, dramatically, when large employers were asked their opinions about hiring and keeping workers.
Nearly 60 percent of the valley’s biggest employers said they expected hiring to get more difficult in 2008 and beyond.
Housing, housing, housing
While labor’s usually tight in the valley, especially in the winter, the problem is becoming more pronounced.
Paul Gordon, manager of the Vail Valley Jet Center in Gypsum, said his employee numbers are down about 10 percent this year from what he thinks the business should have.
Gordon put housing at, or near, the top of the list of reasons he’s short seven or eight people this season.
“We try to hire good people locally, train them, and raise them so to speak, and then they go somewhere else they can afford to buy a home,” Gordon said. “I just see things getting more challenging in the future.”
It’ to the point, Gordon said, that the Jet Center ” which greets the thousands of people every year who fly to the valley on private jets and fuels and services their airplanes ” is probably going to have to get into the housing business somehow.
Plans aren’t firm yet, but Gordon said the company could start master-leasing apartments or providing down-payment assistance in the near future.
“We need to keep our costs and our prices to a minimum, but our clients demand the best service,” Gordon said. At some point, he said, the ability to get and keep people could affect the Jet Center’s bottom line, because of either high prices or poorer service.
The problem Gordon sees developing is becoming more common in the valley, said Don Cohen of the Economic Council.
One of the main problems with getting employees into homes, especially those buying for the first time, is that as longtime residents retire, sell their homes and leave the valley, the people who replace them in the workforce can’t afford to buy those homes.
“You have richer people moving in,” Cohen said. “It’s like what they said about Aspen, where the billionaires are pushing the millionaires out.”
The result will be fewer people available in the local workforce. And, given the current energy boom in Garfield County and the planned re-opening of the Climax Mine near Leadville, Cohen said looking for employees outside the valley just won’t work any more.
“You won’t see abandoned homes,” Cohen said. “But fewer workers will diminish the quality of the experience here. When that happens, we’ll see prices level off or dip.”
The double whammy
There’s a two-pronged problem at the town of Vail, one of the valley’s bigger employers. The town has about 220 year ’round, full-time employees, with another 150 or so hired for seasonal work in the winter and summer.
“Right now, we’re down about 10 percent for full-time and seasonal employees,” Vail Human Resources Director John Power said.
“You can recruit all you want, but if people don’t have a place to stay, it doesn’t do you any good.”
Besides housing, Vail and other employers who bring in workers from other countries are facing another problem. The federal government recently put more restrictions on the temporary labor visa companies use to import employees. Those numbers are limited to about 33,000 every six months for the entire country, and most of those visas are used for farm workers.
Power this spring will look into a backup plan and recruit workers from Puerto Rico, a United States territory. People from Puerto Rico, Samoa or other territories can come to the mainland without visas.
The problem, Power said, is that most territories have labor shortages of their own. Only Puerto Rico’s economy has enough workers to bring to Vail.
‘Going to the edge’
While employers’ ability to hire and keep workers probably isn’t going to get better any time soon, Gordon and Wirth are determined to do what they need to do to keep their businesses vibrant.
“I don’t see the situation changing any time soon,” Wirth said. “You have to be really on your game in running an efficient business. Then you have to share those savings with your employees.”
At this point, Wirth is actually lowering most of the prices at his store, so the efficiencies he’s found are paying off, for now.
But the Jet Center and other businesses struggle every day with trying to balance rising costs for virtually everything with what their customers will pay.
Gordon said at this point, the Jet Center’s price for jet fuel is still below Aspen’s, and not that far above the national average.
But if it keeps getting harder to find and keep good employees, Gordon said those prices might have to go up to near-Aspen levels.
What happens then is anyone’s guess.
“We’re not in freefall yet,” Cohen said. “But we’re very, very close to an edge.”
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