Wednesday, June 7, 2006

Valley businesses go extra mile for staff

High cost of living and lack of affordable housing shorten worker rolls

Express Staff Writer

Many Wood River Valley employers, including Jennifer Hazard Davis, left, the owner of Hailey clothing store North and Co., have found it necessary to offer employee incentives like high pay, health insurance, vacation and retirement benefits. In an increasingly tight labor market, these incentives often make the difference between keeping and losing employees, like Amy Anderson, right, Davis said. Photo by David N. Seelig

As the Wood River Valley's cost of living rises, so too does the difficulty many local employers face in finding and retaining employees.

Speak with many area employers on Hailey's Main Street and elsewhere and the high cost of living and a tight labor market will emerge as key reasons behind the difficulty they have keeping their businesses fully staffed.

"It's always difficult in this valley," said Todd Rippo, owner of Java on Fourth coffee house in Ketchum. "And (now) it's even more difficult."

Rippo recently closed his Java on Main coffee shop in Hailey, which has been in business since 1992. Rippo also owns and operates three other similarly named Java coffee shops, one located in Twin Falls and two in Boise.

While Rippo said the closure of his Hailey coffee shop isn't tied to labor issues, he said the changing face of the Wood River Valley has made it more challenging for business owners trying to retain their employee ranks.

The day of the Wood River Valley ski bum is no more, Rippo said. No more can employers count on seasonal employees to help staff their businesses like they once could, he said.

"Those days are about over," Rippo said.

Like many other area business owners, he said providing good employee incentives is a key to doing business in the Wood River Valley. To that end, Rippo provides benefits like health insurance and flexible schedules to his employees.

"You try your hardest to have a good staff," he said.

And when you find good employees, you do your best to keep them, Rippo said.

"You kind of don't have the luxury to fire someone. That doesn't exist."

"You've got to keep good employees," he added. "It's tough."

Finding and retaining employees for his two Boise coffee shops—which do approximately 400 percent the business volume that his Hailey coffee shop did—is much easier, Rippo said. In large part, this is due to the shops' proximity to Boise State University and its deep pool of potential part-time employees, he said.

Keeping employees in Ketchum has also been somewhat easier, although the shop does see its fair share of employees pass through, Rippo said. "Ketchum's a bit of a revolving door," he said.

The struggle many local businesses face in trying to hold on to good employees comes while Idaho's unemployment rate is below that of the national average. Although trending upwards slightly, the state's 3.5 percent unemployment rate for the month of May remained 1.1 percentage points below the national rate of 4.6 percent, according to Idaho Department of Commerce & Labor figures.

In a simple sense, what this means for businesses statewide is that they're competing for a small number of unemployed workers—only 25,300 workers, according to Commerce & Labor statistics.

"The labor force is still tight, and we're seeing an upward pressure on wages," said Bob Uhlenkott, Idaho Commerce & Labor's chief research officer. "People who were in lower-wage jobs are moving up to higher-paying employers, making the search for qualified workers more difficult in industry sectors with lower pay scales."

The truth in this can be seen with many local business owners who have had to pay higher wages than their industry counterparts located elsewhere to keep good employees.

Jennifer Hazard Davis, owner of the North and Co. clothing store in Hailey, is one such employer.

Having successfully retained the same core, full-time, three-person staff for more than 12 years, Davis attributes much of her success in keeping employees to paying highly competitive wages.

"I pay them well," she said.

Davis said she's learned much from the owners of longtime outdoor retail businesses in Ketchum such as The Elephant's Perch and Backwoods Mountain Sports.

"I kind of learned from those guys," she said. "They always treat their employees well."

In addition to paying a good wage, Davis said she also provides health insurance, vacation and retirement benefits. Doing so is necessary if valley employers wish to hold on to good employees, she said.

Davis looks to local banks for guidance on setting wages and providing employee benefits, she said.

"We try to stay competitive with the banks. We need a little more sophisticated person."

Davis feels that area municipalities must do what they can to provide affordable housing for the local work force. She said she has one employee who is currently on the Blaine Ketchum Housing Authority's waiting list for affordable housing.

"She's next," Davis said.

The high number of people hailing from places like Twin Falls who are driving into the valley on a daily basis for work is especially troublesome, she said. These people can't afford to live here and thus take the vast majority of their wages away from the valley, Davis said.

"It's bad for a community," she said. "They're not stopping in here and shopping."

Hailey businesses that pay top wages aren't even immune from high employee turnover, said Jim Spinelli, the executive director of the Hailey Chamber of Commerce.

A good example of a successful Hailey business struggling to keep employees is Marketron International, Spinelli said. Marketron provides management and sales assistance to numerous media companies.

"They pay very well relative to the wage market here," he said.

In an effort to make Hailey a better place for skilled workers to live, the Hailey Chamber of Commerce is working to attract additional employers in the mold of businesses like Marketron and Power Engineers, Spinelli said.

Bringing additional employers to Hailey that "pay the wages (so) that people are going to stay and live here" will provide workers with a safety net if they lose their job, he said.

Despite the chamber's best efforts, however, the Hailey employee market remains tight, Spinelli said. Finding local employers immune from the shortage is tough, he said.

"It's like finding hen's teeth."

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