July 27th, 2021

Denver Employer? The Pros and Cons of Running a Business in the Mile High City

As a Denver employer, you automatically have a leg up on acheiving success. Denver is often ranked one of the best places to live in the U.S. In 2020, Business Insider ranked Denver second only to Austin, Texas, out of 50 top cities. And though Denver sometimes jockeys with Colorado Springs for recognition on these lists, the take-home message is that Denver’s high quality of life and thriving economy make it especially attractive for people who want to live and work in Colorado.

Denver’s booming tech, energy, and healthcare industries provide jobs and opportunities. And tons of outdoor recreation, great weather, a vibrant arts-and-culture scene, professional sports, and the nearby Rocky Mountains act as built-in, ready-made employee perks.

But how do Denver employers fare in a city like this?

As the country comes out of the pandemic, new industries will emerge and strengthen while others will falter, and the workplace will continue to evolve. Denver employers will have to navigate it all, while also dealing with the local quirks and changes that make the city unique.

Here’s a closer look at the reality for Denver employers right now, focusing on two of the major challenges you may be grappling with and why Denver is still a great place to run and grow your business.

Challenges for Denver Employers

Employment laws & regulations and the challenge to keep up

Staying compliant with an ever-growing number of employment laws and regulations is one of the most difficult tasks you have to face as an employer. It’s especially challenging for small to mid-sized businesses that have limited time, resources, and expertise to commit to the task.

This year, a couple of major state laws went into effect in Colorado: the Equal Pay for Equal Work Act (Equal Pay Law) and phase two of the Healthy Families and Workplaces Act (HFWA). The city of Denver also passed a minimum wage increase — from $12.85 an hour to $14.77 an hour — and a minimum salary increase for exempt employees — from $35,568 to $40,500. Just a year ago, in 2020, Colorado passed the Public Health Emergency Whistleblower (PHEW) Act applying to all employers in the state, putting a bigger spotlight on workplace health and safety during the pandemic.

Not only do you have to comply with these new laws, but you also have to stay up-to-date on changes to any number of existing laws. Meticulous record-keeping, critical deadlines, adjustments to payroll and taxes, workplace notices and postings, and other important steps and communications are all applicable when it comes to implementing new and changing regulations. And though larger businesses may have a robust in-house HR team with legal experts on hand who can help, if you run a smaller business, you might not have this luxury.

Instead, the responsibility for risk and compliance tends to fall on whoever is asked to wear the HR hat — whether that’s a single dedicated employee, an employee with another job who performs HR activities only as they have time, or the business owner, in many cases. If the person appointed to the HR role doesn’t have a comprehensive understanding of federal and state laws, it’s less likely they’ll know how to implement them appropriately. And as every business owner knows, one compliance mistake, however seemingly minor, can be devastating both financially and reputationally.

The rising cost of living and its impact on compensation

Like other cities around the country, Denver is changing — namely, through rapid growth. A strong economy has attracted people here from all over the country and contributed to new job creation. But rapid growth over the years has also meant a steady increase in the cost of living — creating a tradeoff between the opportunities growth can bring and the inevitable consequences that come with more people moving in.

Denver is still considerably cheaper than coastal cities like San Francisco and New York. But that’s slowly changing. According to 2019 data from Move.org, which analyzed the cost of living in 75 cities — giving the number one spot to the city with the lowest cost of living and the number 75 spot to the city with the highest cost of living — Denver came in at number 56. The total cost of living here is around $2,300 per month when factoring in rent, internet, utilities, food, and gas. Compared to El Paso, Texas, number one on the list, the cost of living is $1,182.

As the cost of living in Denver goes up, salaries haven’t necessarily kept pace. Founder of a popular local job list, Andrew Hudson said in 2017 that when he posts jobs, the salaries tend to still be in the range they were in the late 1980s. Salaries for entry-level jobs are roughly $32,000 to $40,000, and the salaries for mid-level jobs still hover around $40,000 to $55,000.

Salaries can vary widely by role and industry. A Denver resident who runs their own business confirmed in the same article: “If I went back into communications, I would easily take a 15 percent cut over what I was paid in my director-level job in 2012 when I left, and I would wear more hats. The house next door to us sold for $200k more than what we paid for ours six years ago. We couldn’t qualify for a loan for our own house now, and the average rent on a house that would work for our family is $900/month more than our current mortgage.”

As mentioned, the minimum salary in Denver went up this year, but it still may not be enough to offset the city’s higher living costs. When salaries don’t reflect true cost-of-living increases, it’s much harder to save for retirement, buy a home, have kids, and pay off student loans. This is why, in addition to working a regular job, many people in Denver have resorted to driving for Uber, taking in a roommate or two, or renting out rooms to guests just to make ends meet.

But the impact of higher living costs doesn’t just affect employees. Rising costs and inflation put more pressure on employers to adjust salaries upward, including offering relocation packages to employees who choose or are asked to move here. Other costs to employers, like health insurance and employee benefits, are also soaring. And when factored in with cost-of-living adjustments (COLAs) it makes hiring and promotion a much more expensive proposition. You have the tricky task of being more mindful than ever about compensation and staffing, without losing the ability to attract and retain quality talent.

Benefits for Denver Employers

Attractive location for employees

Right now it’s difficult to attract and retain talent. It helps that Denver is a top-ranking city when it comes to providing work-life balance — making it easier to appeal to employees out of state. Access to the mountains is a summer and winter lover’s paradise.  And while employers have to promote a balance between their work and employees’ personal lives, Denver’s economy and location make it possible. The travel times in the metropolitan area, access to better benefits and healthcare, and the social scene make it easier for employers to promote work-life balance.

Unparalleled support for businesses

Especially in the startup world, Denver can’t be beaten in terms of community and government support. Hosted by the city of Denver, Denver Startup Week is the largest free entrepreneurial event in the nation, drawing tens of thousands of participants to take part in talks and panels featuring local businesses and leaders. Denver’s government also awards numerous grants, tax breaks, and other incentives to new companies that are set up here.

Conveniently located for remote work

As remote work continues, Denver’s central location makes it easy to communicate with and manage geographically distributed teams and employees. The time zone differences between the west coast and the midwest (one hour) and the east coast (two hours) allow Denver-based teams to schedule calls and meetings with relative ease during a normal workday. And if travel is necessary, Denver International Airport is a hub for major airlines and direct flights to cities all over the world.

Local HR Expertise Supports Denver Employers

There’s a reason why so many people want to live and work in Denver. It’s hard to find anywhere else with such a dynamic urban setting with real economic opportunity situated in such an appealing region. For many people and businesses, Denver checks all the boxes.

But the business landscape is constantly changing no matter where you are — especially when it comes to laws and regulations. And in a flourishing city like Denver where growth and competition are still on the upswing, it’s important to consider how outsourcing critical activities like HR to local experts can help your business survive and grow.

A local HR team that understands the ins and outs of being an employer in Denver can help you. Paying attention to compliance is more important than ever and one area where outsourcing HR can have serious benefits. Read our guide to learn more about starting and growing your new business in Colorado.

Download Our eGuide: The Step-by-Step Guide for Starting a Business in Colorado

Download this guide to learn clear steps, from conducting market research to finding tools to driving efficiencies to get your new business started.

download link