Flathead County Unemployment Rate Rises to 4.9% as Job Openings Drop
As the chronic workforce shortage persists across industries, the unemployment rate has begun to climb to levels that have not been seen since early 2021
By Maggie Dresser
After years of low statewide unemployment rates that have hovered around 2.5% and resulted in a chronic workforce shortage across Montana’s industries, employers and state officials say the labor market is loosening as rates slowly rise and applicant pools grow.
Montana’s unemployment rate reached 3.4% in February, growing by almost a percentage point in the last year while Flathead County grew to 4.9%. The national average rose to 3.9% in the same month.
While unemployment numbers remain low, experts say it’s a notable jump following three consecutive years that didn’t surpass 3%.
“We really haven’t seen that high of a rate since March of 2021 when we were still coming out of the pandemic year,” Job Service Kalispell Manager Laura Gardner said. “During that year, it was fairly high but then it kicked back down after that. So, it is something we are watching.”
As the unemployment rate climbs, Gardner said job openings have shrunk 30% from January of this year compared to the same month in 2023. In March 2023, there were 1,100 job openings in Kalispell compared to 842 jobs as of March 25, 2024, according to Montana Department of Labor and Industry (DLI) data.
Statewide, payroll employment increased by 700 jobs in February with the professional and business service industry, arts and entertainment and the recreation industry posting the strongest job gains as seasonal work shifts.
Economists don’t have enough data to trace any direct cause to the shrinking job numbers, but Gardner said the industries most impacted are finance and government positions.
In the food service industry, employers are noticing a stabilizing labor pool after the pandemic triggered a severe worker shortage. But despite the looser job market, many have adapted their business models to accommodate shorter staffs.
For example, managers at Montana Coffee Traders cut the menu and hours during the height of the pandemic when the workforce shortage was at its peak in order to operate with a shorter staff.
But even as the shortage appears to be easing, Café Coordinator Jesse Farnes is reluctant to grow the menu and hours again, predicting similar issues to re-emerge in the future.
“For staffing, it’s so much easier to function that way,” Farnes said last month.
Healthcare remains the industry with the greatest demand for employees as baby boomers reach retirement age and are simultaneously leaving the workforce while also needing more healthcare resources.
DLI projects there will be 6,000 healthcare job openings per year, 638 of which are for registered nurses (RNs). Over half are projected to be due to retirement while another 8% are anticipated because of an increased demand in the state’s growing and aging population. Only 40% are expected to be due to turnover.
As the largest employer in Flathead County, Logan Health has the most job openings with 273 on March 25, while Immanuel Lutheran Communities, a life planning facility, had 28 job openings.
According to DLI data, the demand for nurses is outpacing the supply even though the volume of RNs is growing rapidly.
The number of nurses working in Montana grew from 18,000 RNs in 2020 to 20,000 RNs in 2022, for an 11% increase. However, only .8% of nurses are unemployed and are actively seeking work, compared to the national rate of 3%.
Other sectors like the wood products industry are also facing persistent staffing shortages as employees near retirement age.
At F.H. Stoltze Land & Lumber Co., personnel manager Leah Michael says the small, locally owned company has seen steady cycles of turnover in the past three years as long-time employees retire.
“Our problem right now is our main core personnel are all reaching retirement age and we are losing experience and work ethic,” Michael said.
Prior to the pandemic, Michael said the company didn’t experience much turnover. But as the aging workforce retires and unemployment rates remain low, there’s a small pool of applicants to fill vacancies, which currently range from entry-level sawmill operator positions to highly skilled millwrights.
The small, family owned company also struggles to compete for employees with Weyerhaeuser, the Washington-based lumber company that manages millions of timberlands across the U.S. and Canada, Michael said.
As of March 25, there were 13 job openings at Weyerhaeuser while F.H. Stoltze had two vacancies.
To recruit new employees, Michael said they have been relying heavily on local staffing agencies like Express Employment Professionals for workers.
“We typically did not rely on staffing companies,” Michael said.
Job Service Kalispell will host the Northwest Montana Job and Opportunity Fair on April 11 at the Flathead County Fairgrounds Trade Center Building. The career fair is geared toward high school and college students and will run from 9:30 a.m. to 11:30 a.m. The job fair will be from 2:30 p.m. to 6:30 p.m.