Podcast: An Idaho Labor Market Snapshot

Logan Finney, Idaho Reports: Hello and welcome to the Idaho Reports podcast. I’m Logan Finney. Joining us this week is Matthew Paskash, a regional economist with the Idaho Department of Labor, to discuss the department’s Business Climate Survey. Matthew, thanks for joining us.

Matthew Paskash, Idaho Department of Labor: Thanks to have me.

IR: This was the first survey like this put together by the Idaho Department of Labor. Can you introduce us to what the survey was looking at and the department’s motivation behind it?

Paskash: Well, I’ll start with the motivation first. Idaho is a relatively small state, so even in some of our own published data that we put out, as well as information from some of our partner agencies like the U.S. Bureau of Labor Statistics and the U.S. Census Bureau, sometimes — due to small sample issues and data disclosure policies which prevent us from publishing certain data points — we just don’t have a lot of data for Idaho. So that was kind of one of the main motivations for this, it’s that either data is not there, or on the other hand it comes with a considerable lag. We see this with perhaps like the American Community Survey results that the Census Bureau puts out. So, we figured that we’d try to craft our own survey program to track things a bit more close to real time, and sort of gauging the current business climate as well as employers’ expectations of some things going forward. So that was kind of the motivation.

To then put that into practice in terms of what specifically we would like to look at, this survey included a few things that we would expect to ask every single year that the survey goes out, and we do plan on making this an annual survey. But also a few things that might be more reflective of some of the more salient things you’ve been seeing or hearing that we might just want to track that year, especially with some lingering effects of the pandemic, which sort of motivated some of our questions like on remote work, like on some of the more varied reasons for employee turnover, which might be related to health reasons, family or child care responsibilities, etc., but otherwise, many of the questions like “What has been your particular business’s employment situation the last few years?” and “Where do you expect it to be in another five years?” Those types of questions we would be repeating every time this rolls out. For this first inaugural survey, we decided to take it as a bit of an experiment as well for trying some new software for distributing the survey. We’ll be kind of fine tuning it as we go, but more or less it’s to get an as close to a real time snapshot of what are businesses’ concerns, needs and expectations for the medium term.

IR: Very cool. We’ll get into some of those specific details like remote work and turnover here in a second. But first, can you give me the top level findings from the report? What were some of the most common things you heard from employers in the state?

Paskash: Certainly. So amongst top concerns, I will say that as a labor economist and with the Idaho Department of Labor, we kind of have an institutional bias in what we look at. We look at typically the labor market. While this is very much a large part of the general economy – I mean, almost everything requires humans to perform some tasks for a certain product or service to be delivered – in any case, we thought that perhaps we have, again, some institutional biases in what we look at in our day to day work. And so we decided to see how pervasive are these labor concerns that we’re always hearing about? And no surprise to us, but I guess it was some some validation, that labor concerns were the top concerns for our survey respondents. Either the high labor turnover, or the cost or just supply of workers in their area and in their industry. So those two subsets of the labor question comprised a majority of our respondents.

So that kind of gave us some idea that what we’re hearing is not necessarily a selective sample of the general Idaho business community, but in fact, it’s a pretty pervasive issue we’re hearing. Some other top findings that kind of stood out to us was, broadly speaking, labor turnover if we look at that specifically is being initiated by workers breaking this relationship that they have with their employers. And it’s by and large mostly to switch jobs, to find a better job, perhaps with better pay, better benefits, better work life balance, you name it. It’s very much a seller’s market, and when workers have options they’re going to vote with their feet. That reflected in what we’re seeing for why employers are having turnover. A few other key top high level takeaways on the skills question, and again focusing on the labor market, workers typically need some level of skills to be a good match with a particular employer. We asked them for several broad types of skills and to rank what share of your current workforce has these skills. Where we seem to be having the most deficiencies is in soft skills and higher level cognitive skills, things like managerial skills and leadership, things like teamwork, things like time management as well as problem solving and critical thinking. These seem to be sort of a cluster of skills that employers really would like to see more of their workers have to an adequate degree, and they are also expecting their need for these skills to grow further in the future. So these were some of the the big takeaways, again, some surprises, some not so surprises, but it is giving us a good snapshot in time of what our Idaho businesses and employers specifically are really needing right now.

IR: A lot of this data that you collected from these survey responses does really seem to reinforce what we were hearing anecdotally over the last couple of years during the pandemic.

Paskash: Yeah, we we’ve been hearing for the last couple of years just a persistent need by employers for not just for workers in general, but also optimistically, maybe workers who have the right skills, who would be a good fit for their team, for their organization. While it has cooled off somewhat since the survey went out – these surveys reflect March when it was distributed, and we just published the results here last week at the end of August. Since then we’ve seen some downtick in job postings and a slight decrease in quit rates amongst workers and a slight elevation now in the layoff and discharge rate from employers. But that being said, it still is a tight labor market by most measurements. The pandemic caused a lot of reshuffling in the labor force and it’s forced a lot of businesses, a lot of organizations, even a lot of local governments to really take a broad review now of a lot of their hiring practices, a lot of their types of training that they provide to their workers. Again, things like benefits, things like work life balance. We sort of see we are in a new normal now, and many are still trying to navigate what that new normal is for them.

IR: Did you guys have any partners who helped you put together the survey and distribute it?

Paskash: Yes. Part of the motivation for the survey was to look at some demographic information of our state business leadership. This was specifically coming from the Idaho Commission on Hispanic Affairs, so they were sort of our partners in this as well. They provided a Spanish translation of the questionnaire which went out, so we had both an English and Spanish version. An overwhelming majority of were English, but we liked to at least make sure that we had the option for non-English speakers. We may consult them again next year if they have any further information they would like us to glean on next year’s survey.

IR: You were one of several regional economists from the department who collaborated on this. Can you tell me, were there any major differences that you guys found across the different regions of the state?

Paskash: We did find some some differences, and some of that reflects just the geography and the center of gravity of the state being southwest Idaho and the Boise MSA in particular. So by comparison, say in north central Idaho which our labor economist Lisa Grigg covers, and then in southeastern Idaho where I cover, we’re kind of the two less populated and perhaps a little less diversified economies than other parts of the state. Some of our responses may have reflected just our own sort of idiosyncratic mix of businesses and employers that reflect our areas, while perhaps the survey results that came out of southwestern Idaho where Jan Roeser our economist covers that region, that region given its size and its diversified economy is perhaps a little less sensitive to outliers.

So we did see some some interesting regional differences, amongst which was one thing we did look at this year which was a part of a request we had received from the state Commission on Hispanic Affairs was the demographic makeup of business leaders and business owners in our state. We had seen that generally in many ways reflecting the state population, but in many ways also kind of interestingly moving against the state’s overall demographics. Leadership tended to skew white, middle-aged to older, and men. But in Lisa’s corner up in north central Idaho, we did see a relatively larger share – at least compared to the state overall – of women in positions of business leadership, which was surprising. That we had just not anticipated.

IR: That’s very interesting. You guys also collected some information about the age of businesses, or how long they’ve been in business. Can you tell me your findings about that?

Paskash: Yeah, that was partly more of a quality check. We do have some information on the vintage of businesses in the state, and this was to sort of see just perhaps how skewed or not our respondents were, compared to what we know on the state overall. There was a large representation in our survey sample of relatively newer businesses, those especially in the last ten years or so when they first began operating in the state. But also, this might reflect some degree of survivorship bias in that businesses typically have a finite lifespan and after some point they cease operations or get gobbled up by another entity. So maybe that also might reflect that. But in any case, we did have a very large presence in our survey sample of relatively new businesses. So, reflecting perhaps people who have been here a long time, but also might reflect people who moved to Idaho to start their business. It’s an interesting snapshot of just how how quickly things are changing and evolving in the state, that we have all these new businesses. A lot of businesses in industries that either did not exist or had very small footprints in the state maybe ten or fifteen years ago, and suddenly now we’re seeing more of, so that kind of stood out to us as an interesting fact in our survey sample.

IR: Kind of on the topic of folks moving to Idaho, I want to ask you about what was dubbed the “Zoom boom” during the pandemic, which was people who perhaps worked for a big company in a big city somewhere else in the country in a different state, and during the pandemic they were able to work remotely so they left the big city and moved out to Idaho. Of course, those folks wouldn’t have been captured in this survey because they’re not working for an Idaho business. Are Idaho businesses also jumping on the bandwagon and turning to remote work for their employees that are already here in the state?

Paskash: That’s an interesting question, and that was one of the motivations for the survey, given just the lack of data on remote work in places like Idaho and a lot of other similar rural states. We did ask survey respondents to give us a rough breakdown of the share of workers who work strictly in-person, work in a hybrid capacity, and in a strictly remote capacity. Overall, we had found that something like 11% of workers who are employed by an Idaho business work in some hybrid or remote capacity. So, a little bit over one in ten. However, this also had a lot of variation amongst industries. So at one extreme was mining, for example. It’s very hard to to remote work in that industry. Almost few, if any, workers work in a hybrid or remote capacity. Probably just maybe executives of the company or perhaps someone doing an accounts manageable job might be the one working remote or hybrid, but everyone else for all intents and purposes are in-person.

And at the other extreme of the distribution, a lot of industries which are built upon the production, curating and distribution of knowledge and information, – things like professional, scientific and technical services, or information – those were where we had seen the largest share of workers who are in a remote or hybrid capacity. In professional, scientific and technical services specifically, we have well over half of workers in those Idaho businesses who are not in person, which would make sense given that much of their work conceivably can be performed outside the office. While we’ve been finding more and more academic literature on the sort of hidden productivity costs of remote work, given you aren’t having around the watercooler conversations, so to speak, a lot of sharing of ideas, stuff of that nature. Many still seem to be very much staying in that holding pattern with allowing a lot of their workers to work remote or work at least in a hybrid arrangement now that COVID is for the most part, not entirely, but for the most part in the rearview mirror.

IR: So generally speaking, did this survey give you a pretty good snapshot of how Idaho’s businesses have fared since the start of the pandemic?

Paskash: Yeah. One of our questions was we asked respondents to look back over the last three years. We didn’t say explicitly since the start of COVID, but we chose three years because that would overlap with the years of the pandemic more or less, and asked them how have their employment changed? Now again, there is some survivorship bias in that we’re just looking at the businesses who are still around. We’ve certainly lost some businesses over the last few years because of the shifts and shocks that the pandemic had. But by and large, a majority of respondents said that they had either stayed the same employment size or have managed to grow their workforce over the last three years. And then amongst that same sample of respondents, asking them what are their expectations over the next five years? Again, a majority believe that they’re going to at least hold on to the workforce they have, or manage to grow it. We do see also some correlation that entities who expect to grow have typically been those who have managed to grow over the last three years. On the other other extreme, those who expect to shrink are those who have shrunk to a large extent in the last three years. So again, there’s sort of some projection of their experience over the last three years forward in the next five years. But by and large, the picture is one of relative optimism.

IR: This report is based on a survey that collected this information specifically from the perspective of the employers and from the businesses in the state. Does the Department of Labor have anything like this that is attempting to gather this type of information from the point of view of the employees and from the workers?

Paskash: We have wanted to. The issue is with surveying individuals like that. As part of our work as the Idaho Department of Labor, we have comprehensive contact information for a lot of business entities. Any employer at least who has covered employment – or employment that would fall under unemployment insurance law – by law has to report to us. We have to have some information on file to be able to contact them. That was part of the information that we used to pull for our email list for this survey that went out. But when it comes to individual employees, that gets a bit trickier. If you wanted to answer that question, one way to do it would be to perhaps wait for the U.S. Census Bureau or the U.S. Bureau of Labor Statistics to add another question to their more regular surveys they put out like the Current Population Survey or the American Community Survey. Unfortunately, we have no way of being able to put questions like that onto those national representative surveys, as well as the fact that they have their own dedicated team of folks who their whole job is just tp distribute these surveys, contact people, reach out, do follow ups, etc. We don’t quite have the resources to do something like that here in Idaho. We have talked about it. We’ve been trying to figure out ways of doing it cost effectively, but unfortunately it’s not in the works at this time.

IR: As we referenced at the top of the episode, this is the first year you guys have done this Business Climate Survey. Is it as simple as, “We’re just going to send this survey out next year,” or were there any lessons learned from this that are going to tweak how you guys do it in the succeeding years?

Paskash: Oh, yeah. I think the the main lesson learned is the value of trying to narrow the focus of the survey. This one was a bit of a smorgasbord of topics and questions because we had just so many nagging questions as a research team, and as a department, about certain aspects of the labor market and of employers in particular, that we kind of pushed the limits of what might be a survey that we would expect a lot of folks to participate in and respond with some positive rate. In the next couple of years, we’ll probably trim it down a bit now that at least we have a few of these nagging questions answered, and we don’t expect the results to change much year over year because they probably reflect more, as we would say, long term structural factors and not the more short term idiosyncrasies of the pandemic and the aftershocks of the pandemic. We’ll probably look at keeping it a bit shorter, as well as probably targeting the surveys to particular industries and particular regions. Do a bit more of what we call stratified sampling, as opposed to a wide scattershot which we did this time around. To put that into numerical terms, we had about 90+ thousand unique emails from our various email lists, from both the research division as well as folks who have subscribed to our monthly newsletter that this survey went out to. We got back from that a little bit over 2,300 responses. Next time around, we’re going to take a bit more of a focused approach on who specifically we survey, just to sort of increase the quality of the responses we get.

IR: All right. Matthew Paskash, regional economist with the Idaho Department of Labor, thanks for joining us on the show this week.

Paskash: Yeah, no problem.