Help wanted: A closer look at Colorado’s workforce landscape and labor shortage
Dec 16, 2024
Businesses across the country are posing the same question: Where are all the workers?Data from the U.S. Chamber of Commerce shows that the country has 8 million job openings, but only 6.8 million unemployed workers.The issue is present in Colorado, which is listed as one of 14 states with a more severe labor shortage. Colorado has only 52 workers for every 100 open jobs, a significant drop from the 79 available workers for every 100 open job positions that was seen before the pandemic.Small business owners say the issue is impacting their ability to grow.The problemIts hard to get people in the door, said Chris Teigland, owner of Glo Noodle House, a prime ramen spot in Denver.Teigland and his wife, Ariana, run the restaurant, which is tucked away on 38th and Tennyson. After opening the noodle joint, Teigland ran into difficulties keeping employees.It was horrendous. It was terrible, said Teigland. People can quit one day, walk down the street, go to another restaurant and get hired.To compensate for an at-times skeleton crew, Teigland and his wife are constantly working the kitchen themselves, filling in wherever theyre shorthanded.The high turnover is a consistent issue across the state. The Bureau of Labors September Job Openings and Labor Turnover (JOLT) summary, which was released in November, shows Colorado among the top states for job separation.Colorado has the third highest rate in the nation for workers who quit their jobs. Twice in 2024, the state's quit rate surpassed 3.5%, which was the previous high set in 2021.Job openings in Colorado currently sit at around 200,000, which is lower than the previous year when monthly rates were at around 260,000. However, prior to the pandemic, Colorado averaged around 140,000 job openings per month.Read the JOLT summary below:What's the cause?Its been a wild couple of years, said Colin Larson with the Colorado Restaurant Association.Larson argued that the restaurant industry has borne the brunt of the labor shortage. He cited changes to Colorado policy as the main culprit for the recent issue.To be honest with you, the policies that have been passed here in Colorado over the last couple of years have been really devastating on the industry, said Larson. We've seen the minimum wage go up almost double from where it was six years ago. We've seen new employer mandates like paid sick leave, family medical leave and the Colorado Secure Savings Act. A CNBC study ranked Colorado 39th for cost of doing business and 32nd overall for business friendliness.Small business representatives like Larson argue that the sea of policy changes is to blame for the inhospitable business environment. They argue that the shift has put more power in the hands of the employee, as opposed to employers. Now, workers are incentivized to constantly shift to a different company rather than attempt to rise within their current place of employment.The restaurant industry is a prime example of this effect. In most industries, a promotion comes with a hefty pay raise, but since servers often make a large sum of money from tips, a promotion is often a downgrade.There's really no other industry where getting a promotion means taking a really significant pay cut, said Larson.The lower pay in a higher position means that restaurant employees wont look for a promotion and will instead leave at higher rates.We don't even need to put up a 'Help Wanted' poster because we literally are always hiring, said Larson.However, the shortages arent limited to the restaurant industry. Some experts argue that the driver of the issue lies elsewhere.Sage Hospitality CEO Walter Isenberg employs more than 2,000 people in the hospitality industry across Colorado. Isenberg moved to the scenic state more than 40 years ago and witnessed a shift in affordability.The biggest deterrent of getting employees to come to Colorado, I think it's affordability, said Isenberg. In the past year, Colorado has seen a massive jump in prices. The state's housing costs increased by 7% in 2023, with groceries increasing by 6% and utilities by 4%. Isenberg argued the price increases discourage workers from coming to the state.We have opportunities to make our state more business-friendly, said Isenberg. One of the biggest difficulties with the labor shortage is workforce housing.Isenberg argued that a solution to the shortages could be more workforce housing. If employees can stay close to their jobs at an affordable price, it could encourage them to take jobs in Colorado as opposed to working from home or commuting out of state.Does a problem exist?Although the data reflects a massive shortage, some policy experts argue that Colorados job market is actually healthy.Charles Brennan with the Colorado Center on Law and Policy argued that there isnt a job shortage in Colorado.A labor shortage has to be something that we see over a long period of time, said Brennan. Just because some employers are having trouble hiring doesn't necessarily mean that there is a labor shortage. A phenomenon that could explain the labor shortage data is ghost jobs.It's sort of a new trend that the Bureau of Labor Statistics doesn't have a good way of really tracking, said Brennan.Ghost jobs are false job postings for positions employers don't plan on filling. More than 40% of companies said they posted a fake job listing in 2023, according to a survey of 650 hiring managers. Additionally, the survey found that three in 10 companies currently have fake listings posted.The purpose behind a ghost job is two-fold. First, to make a business appear to be always growing and hiring. Second, to keep a close watch on potential employees in the future and establish contact with them.The rise of ghost jobs could be muddying labor data across the country. The practice isnt illegal, but its questionable ethics could skew the labor market and also impact workforce morale. A Human Capital Institute report found that 75% of surveyed respondents said they hadnt heard back from companies after applying online for an open listing.It is probably very industry-specific though, said Brennan. For example, I don't think there are ghost jobs in sectors like the restaurant industry or hospitality industry, where they do hire folks really quickly.The solutionBrennan believes that Colorado has seen positive steps toward increasing workforce development. He cited recent apprenticeship programs established in the state that could help build the future workforce.Colorado has become a national leader in apprenticeship programs. State data shows that from July to September 2023, more than 7,600 people were working in 310 apprenticeship programs statewide.Denver7 has extensively covered these programs in the state. In the past year, Colorado has added more than 100 apprenticeship programs.We've seen our state take steps to really try to address those particular labor shortages, said Brennan. Weve seen more investments in our workforce development system, more investments in training opportunities.For Teigland, the solution to labor problems is simple: Be a good employer. "If people are happy and they feel taken care of, that translates to how they cook food or how they treat guests, said Teigland.The young business owner said since starting Glo, the turnover has subsided. He now boasts a relatively healthy working crew, some of whom have been with the business since its inception.Teigland hopes to expand Glo in the near future, but said despite his recent success, he still finds himself working shorthanded more often than he'd like.For Teigland, the brightest future is one where he spends less time in the kitchen and more time with his family at home or taking care of administrative work."I'm looking forward to days at a desk and on the computer," said Teigland. "Just being an owner and saving my back or feet for the day.Editor's Note: Denver7 360 | In-Depth explores multiple sides of the topics that matter most to Coloradans, bringing in different perspectives so you can make up your own mind about the issues. 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