Business2Business: Changes bring new opportunities in west central Minnesota
Diverse. Committed. Loyal. Solid. Progressive.
These are just a few of the words that area leaders use to describe the business community in west central Minnesota.
Over the last 10 years, the business landscape has changed dramatically, not just in west central Minnesota, but across the state and nation. The baby boom generation continues to age, and as they near retirement, many parts of business and community will be affected.
At the same time, younger and middle-aged workers continue to migrate to rural Minnesota in an effort to live more inexpensively and enjoy the peacefulness that comes from outside the metro area. In west central Minnesota, diverse populations are becoming more of a driving force in the business community, especially as more Latinos and East Africans immigrate to Kandiyohi County.
In the region, agriculture continues to be a leading industry, accounting for much of the reason that this area wasn’t hit as hard during the economic recession as other parts of the state. In the last decade, health care has boomed as well, partly because of the region’s aging population and their increasing health needs.
Some industries, such as the emerging technology sector, were not as prominent 15 years ago but are more established today. The MinnWest Technology Campus in Willmar, for example, now has 30 businesses on campus, many of which represent areas in the field of bioscience, agriscience and cutting-edge technology.
The region has experienced a shift in its business community, and changes are likely to continue in the near future as the population ages, diversity increases and certain industries grow and progress in the area.
Population growth in Willmar area brings jobs
In west central Minnesota, the city of Willmar acts as a regional employment center, bringing in more new jobs and people than any other city in the region. Because of strong development in Willmar over the last decade, Kandiyohi County had a 2.5 percent growth in population, according to Cameron Macht, regional analyst at the Department of Employment and Economic Development.
However, the population growth in Kandiyohi County is the exception in west central Minnesota, not the norm. Other than Kandiyohi and Meeker counties, every other county in the region has continued experiencing long-term population decline in the last decade. This trend could pose a concern about the lack of jobs in these areas.
“It’s really the chicken and the egg question,” Macht said. “Do you create jobs and then people move out here, or the other way around? Usually they go hand-in-hand. If you have population growth, then you usually have job growth. You can’t have one without the other.”
Because there are fewer jobs in lower-populated areas, many from surrounding counties commute to Kandiyohi County to work. Kandiyohi County currently has more than 21,000 jobs, making the Willmar area both a “population center and a work center,” according to Steve Renquist, executive director of the Kandiyohi County and City of Willmar Economic Development Commission.
“I think we just need to keep attracting companies here and creating jobs,” Renquist said. “We’ll fill those jobs because people want to live here. They just need good and productive employment.”
Aging workforce brings changes to business sector
One demographic that has found employment and settled down here are the older workers. In general, west central Minnesota has a much larger percentage of the workforce at or near retirement age, when compared to the state as a whole.
In Kandiyohi County, for example, one in every six workers could start retiring at any point in the next decade. Renville County will see 25 percent of its population reach retirement age by 2030. In Yellow Medicine and Chippewa counties, it’s slightly more than that, with 30 percent of residents expected to reach retirement age by 2030.
“As those people start reaching retirement age, the labor force will start shrinking,” Macht said. “Employers will need to prepare for that. They’ll need to recruit or retrain new employees or change their work qualifications so they can allow for more older workers to stay on longer.”
However, an aging workforce also comes with advantages for employers in the region. Older workers tend to be more committed and likely to stay with the same company until they retire. In a region that includes Kandiyohi, Meeker and Renville counties, the average employment tenure is 12 years. What’s more, 30 percent of workers reported working at the same job for 16 years or more, according to a 2001 Labor Force Assessment.
“Willmar has one of the highest levels of job continuity in terms of the whole state,” Renquist said. “Older workers are less likely to job hop, and they can bring a high level of productivity to a position. They usually value their jobs and their employers.”
Many industries in the area will also benefit from an increasingly older population.
Seniors have more buying power than any other demographic, and the west central Minnesota region has much to offer retirees, with the scenery, lakes and amenities available in the area.
“If you like to experience the outdoors and want a good quality of life, this is one of the better places you can live,” said Ken Warner, president of the Willmar Lakes Area Chamber of Commerce. “Within 10 minutes, you can be on a trail, fishing, boating or golfing. We’re finding that this is becoming a popular place to retire.”
As the population ages, health care, including hospitals, nursing, and residential and community care facilities, will also become a more in-demand industry. “The demands for health care will only continue going up,” Macht said. “Those industries should see tremendous growth over the next decade.”
Younger, more diverse workers moving to the region
The workforce is aging, but that does not mean the region is lacking in opportunities for younger workers as well. It’s a long-held belief that rural areas tend to have a harder time attracting younger workers after they leave their hometowns for college and jobs in metropolitan areas. But that theory may not hold true, at least in Minnesota and other Midwest states.
According to research from the University of Minnesota Extension Center for Community Vitality, many rural communities in Minnesota, including most counties in the west central region, have experienced at least some gains in the 30- to 49-year-old age group.
People in this age group tend to be in the early to middle range of their careers and often bring their spouses and children with them to the area. The safer, quieter neighborhoods, smaller schools and lower home prices appeal to many of the people who move to rural areas at this point in their lives.
“These workers have usually gone where they wanted to go and are looking to settle down now,” Macht said. “They’re increasingly looking to Greater Minnesota to do that. They’re looking for safer schools, more affordable living and a slower pace of life.”
The west central Minnesota area in particular has much to offer young professionals and their families, Renquist said.
“One of the things we’re trying to do is present an attractive place to live, work and play,” he said. “We want to get the word out that in Kandiyohi County, we have a complete living experience. We have wonderful city and county parks systems. There are 100 lakes within an hour’s drive. It’s a true quality living experience.”
Along with a growing number of younger families, the west central Minnesota region is becoming more and more diverse in population. For instance, Kandiyohi County has the 10th highest number of Hispanic or Latino residents in the state, at 11.2 percent of the population.
This growing diversity has had a large impact on business in the area, particularly on bringing new businesses into the region. In Willmar alone, there are more than 40 new ethnically owned businesses in the community.
“That diversity brings nothing but strengths and opportunities for us,” Warner said. “Their entrepreneurial spirit is alive and well. They work very hard and have a real sense of family and community.”
Warner, who has been with the Willmar Chamber for 23 years, says he saw the community transition in a positive way when the Latino population began heavily moving into the area. Now, he’s seeing the same transition take place with the growing East African community.
Not only do these diverse groups bring new jobs into the community, but recent immigrants to the Willmar area also fill a need in the area’s basic workforce, Renquist said.
“If you look at America’s history, most of the basic conversion jobs, such as farming, meatpacking or mining, have almost always been filled by new immigrants to the area,” he said. “Quite frankly, if they weren’t filling those jobs, would those companies be expanding locally?”
Major industries shifting in the area
The changing demographics of the west central Minnesota region have impacted nearly every industry in the area. In Kandiyohi County, the largest and fastest growing employing industry is health care and social assistance, which account for about 25 percent of employment in the county.
That growth is only expected to increase in the next decade, especially to serve the region’s aging demographic, Macht said.
“A lot of it has to do with demand,” Macht said. “But there’s also a longer-term shift in employment from goods toward service. In some jobs, the focus has become automation. But you’ll always need to have some personal contact with health care and social assistance.”
Health care is also the largest employing industry in Renville and Yellow Medicine counties, and the second largest industry in Meeker and Chippewa counties. In the latter counties, manufacturing is the largest industry sector.
Throughout the region, manufacturing suffered declines during the economic recession, and Macht predicts that the industry will continue to decline as manufacturers learn to do the same level of work with new technology and fewer employees.
“It’s a declining industry, but that’s not necessarily a bad thing,” he said. “A lot of times, that means upgrading equipment, and that makes your manufacturers as profitable as possible. From a workforce development, there will be fewer workers. But the workers that are left over tend to make higher wages and have better skills.”
A smaller but still important industry in west central Minnesota is what Renquist refers to as the “emerging professional technology segment.”
With the addition of the MinnWest Technology Campus, which was established in 2006, the Willmar area has attracted new businesses ranging in fields from technology to bioscience to agriculture.
“The MinnWest Technology Campus and the Mid-Central Research and Outreach Center are positioning us to be leaders in this area,” Renquist said. “We could be going through the same type of explosion as North Dakota is now with the oil boom. They found their destiny, and now we can create ours through our mental ability and perseverance.”
In Warner’s opinion, the MinnWest Technology Campus is building a legacy for the Willmar community.
“It’s become a focal point that I don’t think Willmar had in the community before,” Warner said. “Hopefully, someday the campus will be full and thriving, and there will be a business that started as a two-person shop there and grew to have 25, 50, 500 employees somewhere else.”
Future predictions for business in west central Minnesota
The west central Minnesota area has seen numerous changes in the business sector over the last 10 years, with an increasingly aging workforce, a more diverse population and a shift in the prominent industries in this area.
In the next decade, these changes will continue to take effect and have even more impact, Macht said.
“The data seem to show that Kandiyohi County is in a position to continue slow and steady growth into the near future,” Macht said. “Businesses will have a lot of opportunity to attract younger workers, who will become more available as older workers filter their way out of the workforce. There will also be opportunities to make the most of assets that the region already has.”
These opportunities have given the Willmar and west central Minnesota area a strong reputation throughout the state and will continue to make the area an even more attractive place to live and work, Renquist said.
“The name Willmar is becoming more active in circles in the metropolitan area,” he said. “We’re getting the word out there that Willmar has a vibrant and robust business community. I don’t think that we’re being discovered necessarily, but being magnified in terms of the opportunities that exist here.”
Business2Business is a new monthly publication for businesses serving other businesses in the region. Look for it in the Tribune and at area business locations across west central Minnesota.