by Michael Braun, Ph.D., Research Contributor
Around 2012, as the economy began its long road to recovery, I received an inquiry from a Denver-based venture capital group ‘sniffing around’ for potential investment opportunities in Montana. As an entrepreneurship professor at the University of Montana since 2006, I try to keep a finger on the pulse on the regional start-up scene. And while venture activity to date had been sparse albeit consistent, this was the first time out-of-state institutional money had come calling. It was a sign that the Treasure State was entering a new chapter: by 2016, places like Missoula, Bozeman and Whitefish had birthed enough tech ventures to rank Montana, according to the Kauffman Foundation (Kauffman Index Startup, 2017), among the top hotspots for entrepreneurial activity nationwide. Since then, capital has continued to flow to companies specializing in digital marketing, geographic information systems, and health tech, among others. Apart from the homegrown tech start-ups servicing domestic and international clients, Montana has also become an attractive option for larger corporations to locate their back-office sales and customer support, system integration services, and software development.
One of the ongoing challenges to this burgeoning ecosystem has been access to human capital – more specifically, workers with the relevant skills and capabilities to help scale these ventures. With the regional workforce already picked over, companies, economic development agencies and even our colleges and universities have turned their attention to attracting qualified candidates from outside the state. Ads on LinkedIn flash scenic mountain views from offices, emphasizing short commutes and other work-life benefits. The campaigns have indeed attracted candidates…but retention has been a different story altogether. Upon landing in Montana, what many a recruit has found, both at work and in the community, is a monochrome environment comprising close to 90% White (US Census 2019). Moreover, an emphasis on an active lifestyle (veryactive, ranking Montana as the third ‘skinniest’ state) reinforces and replicates an ‘outdoorsy’ archetype. New arrivals who don’t necessarily fit the Big Sky mold – in terms of their racial, ethnic, gender or lifestyle background – have faced difficulties fitting into the workforce or weaving themselves into their neighborhoods. In some cases, they have even faced overt prejudice and bigotry. And then the pandemic hit.
Covid-19 is hastening worker relocation to the countryside, in large part enabled by the now proven-out WFH (Work from Home) experiment. With Twitter recently announcing it doesn’t expect its employees to return to the office – ever – more companies in tech as well as in other knowledge-based industries, anticipating cost savings of about $11,000 per remote worker, are already following suit. As the WFH trendline accelerates the aforementioned integration challenges are bound to become even more acute. As has been the case in Montana workers hoping for a more Norman Rockwell-esque existence elsewhere in Rural America may not always find themselves welcomed with open arms. It won’t just be the relocating workers who suffer. With studies showing workplace communication breakdowns, friction and conflict penciling out to billions of dollars in annual productivity losses (Inc., 2017; HBR, 2016), the businesses that hire them will also be on the hook.
With the pandemic allowing for a time-out to reconsider and rethink organizational practices, managers in companies large and small would be well-served to assess how they approach and nurture diversity and inclusion in their organizations. As they do so, they want to be reminded that, as in past recessions, businesses making investments in innovations and workforce development during an economic downturn not only come out swinging in the upcycle but also can gain years if not decades of competitive advantage. Managers hoping to capitalize on diversity, equity and inclusion in the workplace will want to promote dialogue, training and education for both in-person and remote employees throughout their organization. By failing to do so, both businesses and the rural communities in which they exist run the risk of falling behind when the economy recovers. What this pandemic has shown – more than ever – is that unity and harmony in the workforce will help companies and our economy prevail.
The Kauffman Index Startup Activity State Trends (May 2017)
United States Census
Global Workforce Analytics
Workplace Conflict Costs $359 Billion, According to Science (Inc. 2017)
Putting a Price on People Problems at Work (HBR, 2016)