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Hastings, Red Wing business owners tackle regulation, hiring struggles during visit from state commissioners

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Production managers Brian Knapp (right), with 3M, and David Muelken with SCS Elevator Company said during a Sept. 19 discussion with state commissioners at Red Wing Ignite that housing and wavering interest in manufacturing jobs have made it difficult to fill jobs at their companies. Maureen McMullen / RiverTown Multimedia 2 / 3
A panel of Hastings business owners and leaders who addressed state commissioners at Breakaway Arts Sept. 18 included Pat Regan of Premier Banks and Minnesota Coaches, Kelly Aikins of Innovative Surfaces, Randy Stenger of Extreme Sandbox and Mecca Page of BreakAway Arts. Maureen McMullen / RiverTown Multimedia 3 / 3

How do you incentivize potential employees to sign join a company that already offers competitive pay, health benefits and employee stock options but still struggles to maintain a qualified workforce?

David Muelken, production manager at SDS Elevator Co. in Red Wing, said one route could be making manufacturing "sexy."

Although southeastern Minnesota serves as a hub for industries that boast attractive pay and benefits, manufacturing businesses throughout the area struggle to fill positions.

"We have tremendous jobs, but there seems to be a stereotype of manufacturing," Muelken said. "I would ask: How do we change that perception and show that manufacturing is pretty cool?"

The workforce shortage, along with wading through a litany of regulations, was among the obstacles businesses representatives described to state commissioners from nine government agencies during the first stops of the "Commissioners of Wheels" tour.

The two-day, 11-city tour kicked off Sept. 18 with stops in Hastings and Red Wing. Through their conversations with local businesses, commissioners aimed to gain insight on how they can address these issues and help Minnesota businesses thrive.

"As a commissioner, our focus is on making sure all of our businesses have the resources they need," said Shawntera Hardy, employment and economic development commissioner. "Being able to hear from them what they need and also hearing from them the areas we, as government on all levels, need to include in order to be successful."

Regulations

Casey Regan, president of Hastings-based Premier Banks Minnesota, said at the Sept. 18 stop that some regulations act as a "boa constrictor" on local businesses.

Among them is the Home Mortgage Disclosure Act, a federal regulation that requires banks to release certain data they obtain during public loan applications. Criteria can include information about a person's gender, ethnicity and race.

"How do you think that goes over when you're in the application process for a business owner — 'Are you a male or a female?'" he said. "I have much more important things to be doing."

Fellow panelist Mecca Page described her summerlong endeavor to open the cafe at BreakAway Arts, a Hastings business aiming to offer community spaces for art and art education.

Page said she hoped to offer public school students interested in art scholarships for free or reduced classes.

Schools in the area, however, were reluctant to establish a scholarship program with BreakAway, which they consider a for-profit business. Page said she has since decided to split the two facets of her business into a for-profit cafe and nonprofit arts education facility in the same building

"The ball leagues go to schools and recruit kids right off the fields for after school private leagues they have to pay for, and that's OK," she said. "But, arts education, when arts funding in the schools is getting dropped all the time" does not have the same opportunities.

BreakAway faced another hurdle when the city assessed Page $45,000 to update the 60-year-old building's water and sewage utilities.

"I don't have the kind of money to put into a waste and sewage assessment fee that gives me nothing," she said. "I can't get a building permit without paying that fee, which feels like extortion."

Commissioners on the tour highlighted Minnesota Business First Stop, an organizational initiative Gov. Mark Dayton established in 2012 to help cut back on regulatory red tape and streamline permitting and licensing projects.

Commissioners from state entities including Department of Revenue, Pollution Control Agency, Department of Commerce and Department of Agriculture assembled a team of staff to help simplify the process and offer businesses a more singular resource for licensing and permits.

First Stop, Hardy said, welcomes input and questions from businesses facing difficulties like Page and Regan's.

"Businesses survive when they have strong partnerships, and we want to be a strong partner," Hardy said. "It's a two-way street and we're not always on the ground, so them being able to pick up the phone and give us a call so we can assist in any way that makes sense."

'Help wanted'

Brian Knapp, production manager at 3M Fall Protection in Red Wing, echoed Muelken's concern over recruitment in the town's manufacturing sector, which has historically served as an economic backbone to the community.

The company acquired Capital Safety there in 2014 and has since raised starting wages by 29 percent. But Knapp said the pay bump, coupled with competitive health care and investment offerings, hasn't been enough to fill positions.

Both 3M and SCS Elevators have reached out to the local high school and technical college to organize career and hiring fairs. Red Wing Ignite, a local nonprofit aimed at economic development, also reaches out to students through various hands-on STEM programs that help develop skills and knowledge crucial to the manufacturing sector.

A hiring campaign by 3M last week yielded 26 job offers, but Knapp and Muelken agreed that the area's persisting issues including affordable housing and child care scarcity can hamper their efforts.

Hardy emphasized her department's focus on collaborative efforts to formulate non-traditional methods of addressing issues that affect hiring.

In one example, she pointed to a trio of companies on the same street in Mankato that each needed more engineers.

The companies partnered together to bring in students for hands-on training and work experience. The program, she said, captured more new employees than previous human resource efforts at each company.

"How do you partner together to think about creative ways to make those connections to your next employee or your next partner?" Hardy said. "What are you doing to partner with different nonprofits that may have training programs with value in them?"

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