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Wyndham Withdraws Due to Worker Shortage? Vicious Cycle Ahead?

The Aberdeen American News editorial board wonders if Aberdeen’s low unemployment rate might have influenced Wyndham Hotel Group’s decision to axe its call center here and shift operations to Indianapolis and Saint John, New Brunswick.

Hmmm… let’s look at unemployment rates, based on the most recent data I can find this afternoon:

  • Saint John: 8.7%; province-wide in New Brunswick: 10.1%.
  • Indianapolis: 5.8%; statewide in Indiana: 4.7%.
  • Aberdeen: 2.8%; statewide in South Dakota: 3.3%. (Interesting: BLS says 3.8%.)

Shades of Capital One, which is taking South Dakota’s money and running away from our tight labor market? A commenter expanded on that hypothesis here Friday:

This is just like Capital One pulling out of Sioux Falls – it shows that even when you can find and retain employees at bargain wages and even when your tax climate is extremely attractive it may not be enough. You might be able to find people to staff the phones in many locations, but if you want to find quality management teams and support personnel you might find it a challenge to find them in SD because many of those people realize they can be paid 30% more simply by moving a few hundred miles to the East [Craig, comment under “Wyndham Closes Aberdeen Call Center, Keeps Ops in Higher-Tax Indiana and Canada,” Dakota Free Press, 2015.09.11].

Hmm… workers pull out because businesses don’t pay enough, businesses pull out because they can’t find enough workers… what if workers start staying away because they hear businesses are pulling out? This cycle could get ugly….

9 Comments

  1. jerry 2015-09-13 18:25

    It seems like it is not a worker problem as the numbers in the other areas seem much higher than Aberdeen. Maybe it is the way state government deals with business that is the problem. With all the TIF’s and other goodies that are offered as a carrot, what is being demanded in return?

  2. John 2015-09-13 19:16

    It is NOT a worker problem. It is almost NEVER a worker problem.

    “There are no bad regiments, only bad colonels.” – Napoleon

  3. Roger Elgersma 2015-09-13 20:34

    If you want growth and prosperity, you need people that think growth and prosperity. That is not the culture in South Dakota. South Dakota has a mind set of surviving and living cheap. We have had enough droughts over the last century that we learned not to get to daring. This promotes a conservative attitude and just becomes our reality.
    Then when we try to think we are going to promote big business, we spend money and do not always get good results. We spend millions on opening development areas for industry. We have watched the railroads become a system for farmers to get crops to the coast and try to use government money to move the railroad out of Sioux Falls with 50 mill ten years ago and not get that done so now spend over half that to just buy part of the rail yard and not get the tracks out of town and call it development. Now if he had developers and a need for them, we would have used that cheap land, including the Zip feed mill lot, to start industry a long time ago. We spend a lot, we talk a lot, we advertise a lot and get very little done. Actually we did develop a alcohol industry which was one good thing. Pollution in the cities went down and we found a market for a very much larger corn crop. Dascle and Kloucek did that in this area of the country.
    We need industries who make sense for this area and wages to bring in workers. To have conservatives want a wall to keep illegals out and then want them to come so we can get the cows milked is inconsistent. It just made having a family farm not manageable.

  4. Porter Lansing 2015-09-14 06:36

    Managers are college educated and Sodak isn’t attractive when recruiting managers.

  5. Tom 2015-09-14 07:47

    Wyndhams departure has been long coming. They had threatened the same action many years ago. The trend of phone based reservation systems is being replaced by online booking. Much like all other forms of call center based industries, these operations are being moved overseas or going online. The population of Aberdeen is continuing to increase. New industries are moving into Aberdeen. Wages are actually pretty decent in ABR they have to be to get employees. Even Walmart is paying starting workers $12 as stockers, 3m is starting people at 33-35k. These 250 people will find employment in Aberdeen, it will take a while but the jobs are there. That is the good news. I do agree that the model of shelling out millions in incentives to draw out of state employers has to be reevaluated. I believe it would be money better spent to help the locally germinated industries grow and thrive.

  6. Porter Lansing 2015-09-14 09:35

    If the reservations center is going online, which is true, (rarely do you need a humanoid to book a room) why are they moving to Indiana or the maritimes?

  7. caheidelberger Post author | 2015-09-14 10:12

    Porter, is it just a matter of doing things one step at a time? The Aberdeen call center wasn’t just for reservations but for the “loyalty program and customer care,” tasks that may not be as quickly automated as booking reservations.

  8. Porter Lansing 2015-09-14 10:38

    Right. Customer care is human but not too hard to train. Maybe the workers in Aberdeen need to be replaced with new hires to lower the overhead? (benefits, pay raises, vacation time, retirement options like 401K) It’s a move many corporations make periodically.

  9. Porter Lansing 2015-09-14 11:23

    ….. of course, it couldn’t be this (that Wyndam actually cares about it’s workers and views Obamacare as the least expensive way to insure them)
    Arkansas, Indiana, Iowa, Michigan, New Hampshire and Pennsylvania have approved Section 1115 waivers for the Medicaid expansion effective 2/01/2015

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