In a year or so, a massive fulfillment center is expected to open in Bondurant, adding more than 1,100 new jobs in Central Iowa. Another 200 to 400 warehouse and trucking jobs are expected to be added in Grimes yet this year by the same company rumored to be behind the Bondurant fulfillment center.

With Iowa’s seasonally adjusted unemployment rate at 2.5% – the second-lowest in the nation – will Iowa have enough workers to fill nearly 1,500 new jobs?

“It’s going to be a challenge, for sure, but it’s not insurmountable,” Beth Townsend, Iowa Workforce Development director, said. “I think employers need to look beyond the traditional hiring pools and they should be looking in communities that they haven’t normally recruited from.”

Amazon.com Inc. is likely the company behind the massive fulfillment center under construction in Bondurant. Regardless of who the mystery company is, recruiters will have a challenging time finding enough workers to fill the Bondurant jobs. Experts say the company will likely have to offer more than its typical $15 an hour minimum wage. It also will have to mount an aggressive campaign for workers, recruiting not just in Iowa but in surrounding states as well. In addition, many say, the company may be forced to consider offering flexible work schedules.

“Due to the competitiveness of the job market, if you’re a person looking for a job, you’re in a good position to ask for a competitive wage,” said Townsend, adding that studies are showing an increase in average hourly rates at the low end of the wage scale. 

Amazon raised its minimum pay wage  
Construction of a 780,000-square-foot fulfillment center is underway on 165 acres in Bondurant, east of U.S. Highway 65 and north of Northeast 62nd Avenue. The Bondurant City Council in September approved a site plan for the $250 million project that includes a five-story warehouse/distribution/fulfillment center and more than 2,000 parking spaces.

The building specs are similar to those of other fulfillment centers built by retail giant Amazon. In addition, according to the Seattle-based company’s website, it is hiring people for delivery station jobs that will be based in Grimes.

Amazon employs more than 750,000 full- and part-time workers, according to its third-quarter financial results reported in October. Its website lists nearly 21,000 jobs open in the United States, many in fulfillment and distribution.

A year ago, with much fanfare, the company raised its minimum wage to $15 per hour. While Amazon was lauded for the move, many economists said the company raised the minimum wage because of its inability to recruit workers during a time when the nation’s unemployment rate is at the lowest levels since 1969.

“Money talks,” said Marc Wulfraat, president of supply chain consultancy MWPVL International Inc. “In tight labor markets like Iowa, we’re seeing [Amazon] bump up that wage rate to more than $15 an hour.

“If you have a hard time finding people, the only recourse you have is to pay higher wage rates.”

Where to find workers
Data from the U.S. Department of Labor shows that the median wage for Iowans working in warehousing is $16.36 per hour, or 9% more than the starting hourly pay Amazon pays its fulfillment center employees. The $15 an hour pay is also lower than Iowa’s median hourly pay of $17.84, according to the labor data.

Still, Amazon’s pay and benefit package could lure workers from other businesses, said Ernie Goss, an economist at Creighton University’s Heider College of Business. “We could see them cannibalize other [warehouse] businesses.”

The company could also entice people who currently work part time at a restaurant or other business to move into a full-time job, Goss said. It could also tap people who have retired to work at the facility. “They could also draw people who are in school into the workforce.”
Most likely, though, the company will attract people who work in other states to Iowa, Goss and others said.

“We’re not going to be able to squeeze those out of our current labor force, so either the company brings them or we are able to attract them either internationally or from other states,” said Liesl Eathington, coordinator of Iowa State University’s Iowa Community Indicators Program.

The 1.7 million people in Iowa’s workforce is expected to remain steady in the coming years based on birth rates and retirement data, Eathington said during a recent panel discussion sponsored by the Business Record. 

“Those numbers are fairly close. It’s going to get a little bit worse in the next 10 years, [but] it’s not that our labor force is necessarily depleting,” she said. “But in terms of growth opportunities, really, it’s got to come from outside the state.”

Still, whether the mystery company coming to Bondurant or any other company, for that matter, that locates in Iowa can attract enough workers hinges on pay, many say. 

“If a new company came [to Iowa], that’s how they’d get 1,000 people – they just need to offer more than we’re offering locally, and then people would probably move” to Iowa, said Jean Clabaugh, a senior vice president at Wells Fargo for talent acquisition strategy and delivery. “I see people moving from call center to call center for $2 more an hour.

“If you’re going to come in and [fill] 1,000 jobs, you’ll probably need to be higher than $15 an hour.”

Amazon says it’s attracting workers
Brenda Alfred, a spokeswoman for Amazon, told the Business Record in an email that company is finding “talented and excited candidates to fill our fulfillment centers.” Amazon’s commitment to training workers so that they can advance into higher-paying jobs makes the company among the top places to work in the United States, she wrote.

Alfred could not provide the average wage paid to workers at Amazon’s fulfillment center or the average pay increase. However, she wrote that the company offers full-time workers full medical, vision and dental insurance and a 401(k) with a 50% match. In addition, Amazon offers up to 20 weeks of maternal and paternal paid leave and other benefits that provide “new parents flexibility,” she wrote.

Amazon’s generous benefits packages could prompt existing Iowa companies to make their packages more competitive to retain workers, said Chris Lorenz, director of engineering recruiting for Palmer Group. In addition, the arrival of a company in Iowa looking to hire more than 1,000 people could prompt existing firms to do a self-examination of its work environment.

“What’s your track record for moving up your entry-level worker? Are you keeping up with what that new entry-level person will be getting [paid] elsewhere?” Lorenz said during the recent panel discussion.

Companies looking to attract people into $15-an-hour-jobs also should consider offering relocation assistance to those moving to take a job.

“That allows that [worker] to see the buy-in from you as the employer,” Lorenz said. “Those companies that do that have a payback because it aids them in retaining workers.” 

Read an Insider article from our latest Newsroom 515 panel that looks at next year’s job outlook.