The Pierre City Commission is trying something new to help the community deal with the shortage of workers.
Last week, it voted 5-0 to spend some city funds to educate people at the state’s technical schools, to help make them ready to take new jobs in “high-demand careers in Pierre” or maybe Fort Pierre.
It’s part of a new, local partnership with the Build Dakota Scholarship program that has been around since 2014 and that has propelled about 1,600 students into the mostly two-year degrees at the state’s four technical schools, in Watertown, Sioux Falls, Mitchell and Rapid City, says Deni Amundson, the program manager. She works out of her Wall home, traveling the state boosting the program.
The money for it has come, so far, from $25 million donated by the state’s well-known philanthropist, T. Denny Sanford, and a matching amount from the South Dakota Future Fund that has been around for a couple of decades, priming the pump of workers as part of economic development.
A chief fact of South Dakota is is has about the lowest unemployment in the nation. It has been around 2.5 percent in Pierre for years. Meanwhile, lots of the people who are working have more than one job.
It means that businesses looking to expand have a hard time doing so, because they cannot find more employees.
That’s where this new plan comes in, with the city pairing up with the Pierre Economic Development Corp., Jim Protexter, chief operating officer of PEDCO, told the City Commission on Tuesday, Jan. 7, as he proposed the program publicly for the first time.
The first stab at it will be to fund two years of education to 20 people to turn them into “20 skilled workers,” who can provide employers in the community a better, more stable work force, Protexter said.
If the city will commit $55,000 over five years, PEDCO will do the same, Protexter said. That $110,000 will amount to one-fourth the projected cost of two years of tech education for the 20 proto-employees over five years of the program.
The Build Dakota fund will pick up its standard 50 percent of the cost, while the partnering industries or companies will kick in one-fourth.
That total of about $440,000 will bankroll 20 students for two-year degrees over the five years of the program. In return, the students sign a contract to work at least three years in that job or field.
Amundson said some of the two-year degrees cost students about $20,000, others like auto technology degrees that require tools and such, can cost $25,000 or more over two years.
Build Dakota has done partnerships sort of like this in Watertown and Sioux Falls, but there are technical schools sited in these communities, Amundson said.
“So this is kind of a new thing for us,” she said. And it’s aimed at not-large employers. The big companies, such as McDonalds and Walmart, don’t have any trouble spending some money on educating employees, she said. But smaller firms don’t have that kind of capital to risk, she said.
Mayor Steve Harding is all in. “This is one way the city can help with our local workforce shortage,” he said in a news release after last week’s meeting.”We want our business community to thrive; they need an ample workforce to do that.”
Once the city and PEDCO sign on the dotted line, the pledge to spend the money will depend on the number of students who sign up and, of course, having employers who pitch in.
Instead of paying half the cost of the employers’ share in Build Dakota, this new deal makes it only one-fourth, because of the partnership of PEDCO and the City paying one-fourth of the cost.
“We have local businesses that would like to participate in the program but don’t necessarily have the funding to pay for half of that full-ride scholarship,” Harding said.
They can be pretty good jobs, and this program could even create some new positions, spurring business expansion, said Amundson and Protexter.
When she talks to communities and especially employers, she hears, “We need welders, we need plumbers, we need precision machinists,” Amundson said. It can work for farmers, too, because a couple of the tech schools have two-year degrees in precision agriculture program and one has a dairy farming-related program that would qualify for the Build Dakota scholarship, she said.
Amundson said she’s talked with people in the state labor department and area high school officials in Fort Pierre and Pierre. “What we know is there is a huge market of untapped talent in that age range of 18 to 25, who maybe started college and quit, or never went, so they are kind of under-skilled and kind of floating around out there.”
This new partnership of the city of Pierre and PEDCO with the Build Dakota scholarship program could find and train that untapped talent, Amundson said.
It can include businesses in Pierre and Fort Pierre.
The students in the program have to enroll full-time in one of the four technical institutes in a program tagged as a “high-need workforce area in South Dakota,” maintain at least a 2.5 grade point average, complete the program and work full-time in that field for a South Dakota firm for at least three years.
Amundson said, and some of the participants have changed their plans after enrolling in the program, so they have to pay back the money. Regular monitoring of the program picks up any slacking in obligations.
“Life happens, We have had some (cases) we have had to convert to debts and collect on,” she said.
Harding said that the projected spending on Build Dakota is not in the city’s 2020 budget, so there will have to be some discussion. The sign up period for the scholarship program for students for starting next fall in technical school runs through April 15, Amundson said.