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Progress Edition 2022: Growth, challenges and opportunities abound in the lakes area

Hiring signs remain a constant in changed work landscape

A large crane hauls construction supplies over to the work site.
Total development cost for Gracewin Living Cooperatives, with a complex for senior living currently under construction in Baxter, is listed at $14.15 million. Construction is slated for completion in April of 2023. Share prices for resident ownership range between $234,000 and $350,000 with buyers putting down 50% to secure their share. A monthly fee then covers the master mortgage costs, insurance, taxes, utilities, repairs and ongoing maintenance.
Steve Kohls / Brainerd Dispatch
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Change.

It’s a constant in business, especially during the last three tumultuous years. Even before the pandemic, change seemed to be coming as fast as a loaded toboggan on a steep, icy hill.

Matt Seymour, an active member of the lakes area business community, is one of a number of people who found this was the right time for a change. Seymour sold his independent gas station/convenience and liquor stores in the lakes area in April. The move was an option he said he was exploring before the pandemic’s challenging times arrived in the spring of 2020 with the last few years contributing to the right moment.

Even as he is transitioning to a new way of defining himself outside of work, Seymour remains optimistic about the lakes area.

“We’re blessed to be in a unique area,” he said. “I believe there is a resilience built into the lakes area that serves us very well.”

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Seymour said it’s about managing challenges versus hoping or holding out for change. He was quick to point out he wasn’t an economist when asked about the workforce landscape and labor shortages, which were anticipated to challenge business long before anyone heard of COVID-19. With his extensive experience and as an employer of about 50 people, Seymour doesn’t expect changes in the workforce for some time, saying it will take a generation.

“I think it’s stressful for everybody,” he said.

One of the ongoing challenges is creating a workplace that is attractive and a place where people want to stay. Seymour credited the great people who worked for him and his management team for leading a successful work culture.

Matt Seymour
Matt Seymour

Seymour was known for his Q Squares convenience stores — Pine Square, College Square, Raceway Square and Nitro Square. After 20 years, Seymour said it was the right deal at the right time for a transition to retirement but he really misses the work team.

Now he’s taking some time to recharge, regroup and rediscover who he is away from a job description. He’s not alone in redefining himself beyond what he does for a living. This Labor Day continues to bear witness to the changing workplace. That trend was well underway before the pandemic arrived in the spring of 2020 with aging workers leaving the labor force and fewer members of the younger generations following in additional waves of Gen X, Millennials (also known as Gen Y) and Gen Z.

Baby boomers, those born between 1946 and 1964, were already leaving the workforce at a steady clip before the pandemic convinced some to leave earlier than previously planned.

The Pew Research Center reported in the third quarter of 2020, about 28.6 million baby boomers were out of the labor force due to retirement, representing 3.2 million more boomers than the 25.4 million who retired in the same quarter of 2019.

A hiring sign on green grass outside a building.
A sign outside of Revolv Manufacturing on Thiesse Road in Brainerd advertises the company's need to hire more employees.<br/><br/><br/>
Chelsey Perkins / Brainerd Dispatch

“About a year later, the exodus accelerated,” a 2021 Forbes article noted. “A recent survey from Coventry showed that over 75% of the respondents said they are planning to retire early. The effects of the pandemic made older people reflect on what is really important to them. A larger percentage have come to the realization that they’ll be happier and live a more fulfilling life by leaving their jobs.”

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The so-called Great Resignation didn’t mean people were leaving the workforce just to collect unemployment or increased pandemic benefits. Some left for better pay, better hours, better benefits and fewer public interactions. Others decided it was time to open their own business. There are multiple examples of that in lakes area communities as people decided it was time to follow that dream of being their own boss. And, anecdotally, some took the opportunity to go back to school or start early on the bucket list. And yes, a wave of people decided to retire earlier than they originally planned.

A base for the future building is visible in a sea of earth.
Gretchen Rogers, North Central Medical Supply president and CEO, said the company’s 10-year lease in its current location ends this year. After looking for space to move into before the end of the year, Rogers said they looked at options to build to suit their business. And the corner property, which has been on the market, provided the opportunity they were looking for amid a host of medical businesses and clinics and with a senior living complex currently under construction nearby in the Gracewin Living Cooperative. <br/>
Steve Kohls / Brainerd Dispatch

“Just as younger people resigned from their jobs to find more meaningful work, the seasoned professionals want to use their remaining years to enjoy traveling, visiting more with family and enjoying quality time without all of the stress of a demanding job and suffering the vicissitudes of the corporate world,” Forbes reported. “While some people say that they may engage in consulting assignments and the gig economy, more than half said they aren’t thinking of going back to a traditional role.”

Even with that sentiment widely reported, a host of recent business articles noted baby boomers are coming back into the workforce to help ease labor shortages. This Labor Day finds employees in a strong position as companies court them and are even more willing to build on strong basics to train people for open positions.

The building under construction begins to take shape.
North Central Medical Supply comes into focus as construction continues. “This area has been affectionately called the medical mecca of the community and you’ll be contributing and adding to it so it’s a perfect fitting,” said Baxter Mayor Darrel Olson during a groundbreaking.
Steve Kohls / Brainerd Dispatch<br/>

The onus is on businesses to attract the workers who are out there and then keep them. Flexibility will continue to be one of the key factors in job satisfaction. Businesses are challenged to make a workplace that is appealing, provides growth opportunities and taps into the workers who are out there but who are really looking for a work/life balance and no longer willing to just pay lip service to that as a future goal.

An outside view of Jimmy John's drive-thru restaurant.
Jimmy John's opened a drive-thru restaurant in Baxter in the spring of 2022. <br/>
Renee Richardson / Brainerd Dispatch

A changing workplace and workforce

Across the lakes area, the landscape continues to shift.

Longstanding restaurants, like the Northwind Grille in downtown Brainerd, were unable to reopen, citing a lack of workers. Another eatery with a long and storied past, the Sawmill Inn, also closed its doors. Others, like the Baxter Cafe & Catering, restructured their hours to accommodate a single, day workshift, closing the restaurant at mid-afternoon. And others like Jersey Mike’s Subs and Blaze Pizza joined the community, opening in Baxter. A new Jimmy John’s also opened in Baxter with a twist, perhaps following lessons gained for consumer habits and hiring challenges, with a drive-thru restaurant.

The labor-intensive restaurant industry wasn’t alone in the struggle to fill staff openings. From bus drivers to warming house attendants at Baxter ice rinks, worker shortages affected services.

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In 2017, Susan Brower, state demographer, said a crunch time was coming with baby boomers leaving the workforce, and with a low birth rate, Minnesota would have to look outside its borders to grow the workforce.

A sign in a business window tells customers they are having a hard time finding enough staff to reopen.
Northwind Grille posts a notice in the business window seeking employees as they tried to reopen.
Renee Richardson / Brainerd Dispatch

The pandemic taught businesses their workers can come from outside the state’s borders by working remotely. For the lakes area, the ability to work remotely is opening doors in more ways than one.

Nate Grotzke, senior advisor at Close Converse who specializes in leasing and sales for office, retail, industrial and investment properties, said a lot of people in the Twin Cities who were told they could work from home converted seasonal places into permanent work-from-home places in the Brainerd lakes area.

Through the pandemic, Consolidated Telecommunications Co. noted the increase in services. With hospitalizations down and much of life returning to pre-pandemic levels, the question is whether businesses will continue a work-from-home model or a hybrid.

Nationally, some high profile businesses have taken a harder line to bring employees back into the office. Grotzke said with some businesses making that demand, employees who relocated to the lakes area are saying they won’t come back full-time.

Brainerd Micropolitan jobless rate (%)
June 20222.3
May 20222.0
April 20222.4
March 20224.1
February 20224.0
January 20225.1
December 20214.1
November 20213.0
October 20212.5
September 20212.8
August 20212.9
July 20213.0
June 20213.7
May 20213.4

In regard to marketing and attracting national companies to locate in the lakes area, Grotzke said the 2020 Census came just a little too early and missed counting the number of people who moved here full time and work remotely by about six months.

“Our growth happened commercially and experientially but not statistically,” Grotzke said.

He noted there are additional restaurants — Panera, Noodles, Dunkin’ and a national chicken chain — all looking to get into this market. It’s just finding the right spot.

“There is some good stuff coming, just not yet,” Grotzke said.

Chris Close, senior advisor and principal at Close Converse, said there is a major buyer in the medical field for the roughly 12-acre lot next to Brainerd General Rental on Highway 371. As more people stay in lakes area communities, the demand for services increases along with the demand for housing. Where will the employees come from to fill these future jobs and where will they live?

People talk in the parking lot in front of the former J.C. Penney building.
After a long time of inaction, fresh activity pops up at the former J.C. Penney Co. building on July 14, 2022, in Baxter following news two new retail chains will renovate the space.
Renee Richardson / Brainerd Dispatch

Recent construction projects point to that growth, as does renovation of the long vacant former J.C. Penney Co. building in Baxter, which is making room for new Hobby Lobby and HomeGoods stores. Construction work is ongoing to build an expanded North Central Medical Supply and Equipment in Baxter, just a stone’s throw from crews working on the sizable footprint for the Gracewin Living Cooperative along Glory Road.

Gracewin Living is a high-end senior housing development for those 55 and older. It is building a three-story, 46-unit cooperative. Campbell Properties from North Dakota is planning to build a Pinehurst Apartments complex — consisting of five three-story, 50-plus unit apartment buildings — at Cypress and Douglas Fir drives in Baxter. The development would include 289 residential units. Campbell Properties reported it hasn’t had vacancies in its current apartment complexes for almost five years. The new project, built in phases, could be completed in 2026.

Gracewin Living building under construction
The Gracewin Living Cooperative residences offer one- and two-bedroom units that are handicap accessible with an open concept floor plans, en suite master baths, walk-in closets, in-unit washer and dryer, dishwashers, breakfast counter, balcony or patio, a community guest suite, options for upgraded finishes and walk-in tubs available.
Steve Kohls / Brainerd Dispatch<br/>

The ability to work from anywhere and more flexible schedules with a hybrid of remote and in-person working arrangements is likely for the foreseeable future. It created the option for people to leave the metro and make seasonal homes permanent across the lakes area, where the commute from office to lakeside or country living is a few steps instead of hours behind a windshield. That also means time saved when going from work to home for family dinners or making it to a child’s game or just being there after school. The other door it opens is expanding the job opportunities for existing lakes area residents who didn’t want to leave the area but who couldn’t find the work they wanted.

Ascensus describes itself as a company that helps people save and feel financially secure through partnerships with financial institutions and state governments, whether that is saving for retirement, health care, education or disability related expenses. The company has grown to be much more than one working with retirement solutions. Ascensus has also been a bellwether of trends in the lakes area and has grown to be a major employer.

Our goal is to retain very good employees,
Steve Christenson, executive vice president at Ascensus

Ascensus employs more than 425 people in the lakes area. Many of those employees used to commute to east Brainerd in recent years and occupy two former retail centers turned office complexes — the former Pamida and former J.C. Penney spaces by the East Brainerd Mall, near where highways 210 and 25 meet. Ascensus left both of those building spaces as its employees work from home. Shannon’s Auto Body is opening a second facility and doubling its employees as the business moves into the former Pamida store turned Ascensus office building.

Ascensus Executive Vice President Steve Christenson worked with BLAEDC, area high schools and Central Lakes College to develop the Tech Ready initiative. (Submitted Photo)
Ascensus Executive Vice President Steve Christenson
Contributed

Steve Christenson, executive vice president at Ascensus, said the business started to offer a work from home model under certain guidelines before the pandemic, but COVID-19 accelerated it. Ascensus has a national presence supporting millions of retirement plan participants but always maintained a commitment to the Brainerd area. Christenson said the Brainerd market remains a key hub of service activity. Technology, he said, enabled people to work from home effectively and they’ve found the workforce in the Brainerd area to be adaptable and productive.

Ascensus surveyed its national workforce coming out of the pandemic and overwhelmingly the response was to come in a day or two but continue to work from home predominantly. So the company took a hard look at its facilities across the country and the Brainerd location remained attractive, stable and productive — so they searched for a new home with a smaller physical footprint.
And that has taken Ascensus back to its beginnings in a smaller building in the Johnson Properties area of Baxter, just off Golf Course Drive. The change means leaving about 94,000 square feet of office space and downsizing to about 18,000 square feet. It reduced Ascensus’ office space by 80%.

The company is creating a new space with flexible workspace, meeting rooms and collaboration spaces. Christenson likens it more to the Google model with much more open space to allow for flexible schedules and to allow larger staff meetings or times when teams need to get together. The new office space should be ready to move into by mid-December.

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Christenson, who has been with the company for decades, misses the hallway conversations that he noted were part of the business atmosphere for baby boomers. The next digital generations may have a different way of connecting at the proverbial watercooler — something they may never have experienced themselves outside of binge-watching an old office show — but Christenson said to their credit, they are quick to adapt.

Some jobs, such as printing materials, have to come back to the office. For others, Ascensus is open to the flexible schedule with people gathering together as a team certain times of the year. But forcing employees to come back to an in-person setting when they can work from home will be a challenge when they have so many choices for jobs, Christenson said.

“Our goal is to retain very good employees,” Christenson said, adding the flexible schedule has worked and they see it working in high customer satisfaction numbers. “We’ve had conversations on that and this is the long-term setup for Ascensus because it is working.”

It’s been a big shift in a short time.

Employees are much more empowered to negotiate their working conditions than they have been in many years, Christenson said. Baby boomers, who were two-thirds of the workforce, are now less than one-third. Christenson noted employers can’t backfill those open positions without finding technical efficiencies. He noted home banking as an example. How many people who used to go in and cash a check with a bank teller, now just take a photo of it and deposit it with the convenience of mobile banking?

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Wings Financial exterior with construction complete.
Wings Financial Credit Union was constructed on 1.75 acres north of Forthun Road on land that is between Costco and Highway 371, just north of the CentraCare-Baxter Specialty Clinic. <br/>
Steve Kohls / Brainerd Dispatch

As Ascensus competes to fill its open positions, it is now competing for those workers not on a local scale but a national one as they, too, can work from anywhere. But Christenson feels as a company they’ve found a good balance, purposefully and thoughtfully checking with clients to see if they are getting what they need and with employees so they feel connected to the company and each other.

“We’ve really looked at how we communicate,” Christenson said of keeping staff members informed. They added 5-8 minute video chats every Friday to look at what happened during the week, both good things and challenging ones. The informal video chats include a variety of backdrops and trivia contests and gift cards.

“You have to find a different way to have the conversation and I think we’ve done a good job of it,” Christenson said.

Part of the conversation in attracting employees in the Brainerd lakes area for Christenson is letting them know they can work for Ascensus here and be part of the operation’s many avenues, whether their background is in education or health care or financial services and benefits. The diversification beyond what people may think of Ascensus for its retirement focus, means more jobs and recruitment options in the Brainerd area so people can stay here without moving across the country for the job they want.

Looking ahead, Christenson said the biggest thing people will notice is the shifts are happening much faster than they used to historically. The reaction time for companies is going to have to be quicker and more efficient. He said businesses used to have years to lean in on changes and then it was down to months.

“Now see that in weeks.”

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By the numbers

The Employment Situation report put out Aug. 5 by the Bureau of Labor Services included a number of highlights from July data that provides a better glimpse of unemployment and how it relates to numbers before the pandemic.

Job growth was widespread, led by gains in leisure and hospitality, professional and business services, and health care. Both total nonfarm employment and the unemployment rates returned to their February 2020 pre-pandemic levels.

In July, the unemployment rate edged down to 3.5%, and the number of unemployed people edged down to 5.7 million. These measures have returned to their levels in February 2020, prior to the COVID-19 pandemic.

The number of long-term unemployed (those jobless for 27 weeks or more) decreased by 269,000 in July to 1.1 million. This measure has returned to its February 2020 level.

The long-term unemployed accounted for 18.9% of the total unemployed in July.

The labor force participation rate, at 62.1%, and the employment-population ratio, at 60%, were little changed over the month. Both measures remain below their February 2020 values (63.4 % and 61.2%, respectively).

The number of people employed part time for economic reasons increased by 303,000 to 3.9 million in July. This rise reflected an increase in the number of people whose hours were cut due to slack work or business conditions. The number of people employed part time for economic reasons is below its February 2020 level of 4.4 million. These individuals, who would have preferred full-time employment, were working part time because their hours had been reduced or they were unable to find full-time jobs.

The number of people not in the labor force who currently want a job was 5.9 million in July, little changed over the month. This measure is above its February 2020 level of 5 million. These individuals were not counted as unemployed because they were not actively looking for work during the four weeks preceding the survey or were unavailable to take a job.

Among those not in the labor force who wanted a job, the number of people marginally attached to the labor force, at 1.5 million, was about unchanged in July. These individuals wanted and were available for work and had looked for a job sometime in the prior 12 months but had not looked for work in the four weeks preceding the survey.

Construction vehicles and supplies are outside as work on building Gracewin Living continues.
The wooded site where Gracewin Living Cooperative is under construction was platted for townhome development but the townhome lots there were never built. A wetland to the north connects with Perch Lake. Retail and restaurants are all nearby along with walking trails.
Steve Kohls / Brainerd Dispatch

Discouraged workers, a subset of the marginally attached who believed that no jobs were available for them, numbered 424,000 in July, little changed from the prior month.

In July, 7.1% of employed people teleworked because of the coronavirus pandemic, unchanged from the prior month. These data refer to employed people who teleworked or worked at home for pay at some point in the four weeks preceding the survey specifically because of the pandemic.

In July, 2.2 million people reported that they had been unable to work because their employer closed or lost business due to the pandemic — that is, they did not work at all or worked fewer hours at some point in the four weeks preceding the survey due to the pandemic.

In July, leisure and hospitality added 96,000 jobs, as growth continued in food services and drinking places (+74,000). However, employment in leisure and hospitality is below its February 2020 level by 1.2 million, or 7.1%.

Employment in professional and business services continued to grow, with an increase of 89,000 in July. Job growth was widespread within the industry, including gains in management of companies and enterprises (+13,000), architectural and engineering services (+13,000),
management and technical consulting services (+12,000), and scientific research and development services (+10,000). Employment in professional and business services is 986,000 higher than in February 2020.

Employment in health care rose by 70,000 in July. Job gains occurred in ambulatory health care services (+47,000), hospitals (+13,000), and nursing and residential care facilities (+9,000). Employment in health care overall is below its February 2020 level by 78,000, or 0.5%.

Employment in government rose by 57,000 in July but is below its February 2020 level by 597,000, or 2.6%. Employment in local government is below its February 2020 level by 555,000, or 3.8%, with the losses split between the education and non-education components.

Employment in construction increased by 32,000 in July, as specialty trade contractors added 22,000 jobs. Construction employment is 82,000 higher than in February 2020.

Construction crews work on Wings Financial Credit Union
Wings Financial Credit Union in Baxter by Costco begins to take shape. <br/>
Steve Kohls / Brainerd Dispatch

Manufacturing employment increased by 30,000 in July. Employment in durable goods industries rose by 21,000, with job gains in semiconductors and electronic components (+4,000) and miscellaneous durable goods manufacturing (+4,000). Employment in manufacturing is 41,000 above its February 2020 level.

In July, social assistance added 27,000 jobs, including a gain of 19,000 in individual and family services. Since February 2020, employment in social assistance is down by 53,000, or 1.2%.

Employment in retail trade increased by 22,000 in July, although it has shown no net change since March. In July, job gains occurred in food and beverage stores (+9,000) and general merchandise stores (+8,000). Retail trade employment is 208,000 above its level in February 2020.

In July, transportation and warehousing added 21,000 jobs. Employment rose in air transportation (+7,000) and support activities for transportation (+6,000). Employment in transportation and warehousing is 745,000 above its February 2020 level.

Information employment continued its upward trend in July (+13,000) and is 117,000 higher than in February 2020.

In July, the average workweek for all employees on private nonfarm payrolls was 34.6 hours for the fifth month in a row. In manufacturing, the average workweek for all employees held at 40.4 hours, and overtime increased by 0.1 hour to 3.3 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls remained unchanged at 34 hours.

Renee Richardson, managing editor, may be reached at 218-855-5852 or renee.richardson@brainerddispatch.com. Follow on Twitter at www.twitter.com/DispatchBizBuzz.

Renee Richardson is managing editor at the Brainerd Dispatch. She joined the Brainerd Dispatch in 1996 after earning her bachelor's degree in mass communications at St. Cloud State University.
Renee Richardson can be reached at renee.richardson@brainerddispatch.com or by calling 218-855-5852 or follow her on Twitter @dispatchbizbuzz or Facebook.
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