An influx of new businesses has increased competition for employees, space and work in Bismarck-Mandan.
Bismarck started seeing major business growth, especially in companies related to the oil field, in the second half of 2011, said Brian Ritter, the Bismarck-Mandan Development Association’s director of business development.
“I have people stopping in a couple times a week that have just driven in from somewhere,” said Bismarck-Mandan Chamber of Commerce President Kelvin Hullet.
Entrepreneurs are coming to Bismarck-Mandan to explore the business opportunities opening up in North Dakota. The influx is putting a strain on the available workforce, housing and hotels.
“This is different than anything I’ve seen in my time here,” Ritter said.
Companies are fighting one another for talent. The retail sector has had to work hard to find employees.
“We’ve seen growth in blue collar businesses and growth in white collar businesses,” Ritter said.
“It’s been across the board,” Hullet said.
Hullet predicts the increase in the number of businesses is just getting under way and expects it to really ramp up in the next one to two years.
The biggest challenge when companies, whether new or existing, look to expand has been finding employees.
Frac Decon Services, an industrial cleanup company, moved to Bismarck in June 2011, primarily for oil business.
“It was so hard to find qualified, quality labor at realistic prices,” owner Chris Griffin said.
Griffin said competition has more than tripled for business in the oil field in just the last year. To increase his client base, he is expanding into residential work, doing ventilation inspection and cleaning.
Daymarck, a medical coding company for home health care, moved into the Civic Square building at 521 E. Main Ave. in October.
“It took a little while as an outsider to get connected with the right people,” said owner Nick Dobrzelecki.
The business has grown dramatically but it has been hard finding coders. There are only two home care certified coders in North Dakota, Dobrzelecki said. With the increase in business, he needs to hire about 40 this year.
“Every day is a challenge and it’s because we have so much business here,” Dobrzelecki said.
Businesses are either having to get more creative in their recruitment efforts, like helping find housing or adding more to benefits, or they are paying more, Ritter said.
The wage scale has not changed drastically, but it has increased in last the 12 to 18 months, Hullet said.
“It’s definitely put pressure on the labor force that’s already here,” Ritter said. “Even before the oil and gas activity hit Bismarck-Mandan, we were a growing market.”
There has been an influx of workers from outside the area, which has offset some of the problem. But with an already minimal unemployment rate, finding workers is harder than before.
Kadrmas, Lee & Jackson, an engineering firm, has been in North Dakota for 75 years. As more firms come into Bismarck-Mandan, KLJ has been looking for employees nationally as well as locally, said Cory Finneman, corporate planner.
“Because of the national economy being down, we’re able to capitalize on the expertise out there looking for employment,” Finneman said.
KLJ has seen more competition for business as well.
“There are just more people at the table now when proposals are made,” Finneman said.
Finneman said the company sees it as an opportunity. The firm has added more services to stay competitive. Finneman said the good client relations the company has built from being in the state longer helps as well.
Space is another problem. KLJ is spread out in three different facilities, but is looking to combine some of those into one building. In some cases, people are building rather than renting or remodeling what they have, Hullet said.
Tubular Transport and Logistics moved into the Northern Plains Commerce Centre in August last year. The company did not face the same problems with workforce, but looked all over North Dakota trying to find a place to locate.
“Considering that it was in an area that we’ve never been to, it felt very easy in the scheme of things,” said Alex Nicholas, vice president of operations. “The biggest challenge is finding the right spot.”
The commerce center’s proximity to the railway was perfect for the transport company, which supplies pipe to the oil fields.
The oil and gas industry also has done more than provide work and business opportunities for North Dakotans. Increased publicity due to the oil boom has businesses that would not have considered the state before now looking here.
“I think it goes beyond oil,” Hullet said. “When you look at North Dakota, we are one of the few places that has a strong economy.”
Ritter believes higher education also is going to play a bigger role in Bismarck-Mandan. With the University of Mary, Bismarck State College and United Tribes Technical College nearby, the schools will be able to train more students to help alleviate tight labor markets.
Reach reporter Jessica Holdman at 250-8261or jessica.holdman@bismarcktribune.com.
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