Colorado’s competitive labor market poses opportunities and challenges for employers and job seekers alike. Unemployment in Colorado dropped to 3.7% in March 2022. Earlier in the year, the Colorado Department of Labor and Employment (CDLE) reported that the state’s employment recovery was outpacing the recovery in the U.S. The CDLE also projects more than 300,000 jobs will be added in the Denver metro area alone through 2030.
Colorado businesses can improve their business outlook by getting strategic about their workforce. Determining the skills employees need today and in the future, having a recruiting and hiring plan in place, and staying sharp on employment factors specific to their industry are a few ways Colorado business leaders can take advantage of the current job market. But part of doing this due diligence is to also understand the workforce trends that are happening across Colorado and what the impact of those trends might be.
Here’s a look at some of the critical workforce trends in Colorado and what they could mean for you as a small business leader, so you can respond effectively and stay competitive.
Industry Growth In Colorado
There are a number of industries in Colorado that are not only growing, but truly defining the state’s economy.
Tech, tourism, and energy, for example, have long been in the spotlight in Colorado and don’t show any signs of fading. There are already more than 230,000 people employed in tech-related jobs across the state, with tech employment accounting for 8.3% of the total workforce in Colorado and projected to increase by 22% between now and 2032. And increases in crude oil, natural gas, and renewable energy production continue to create employment opportunities in Colorado’s energy sector. On the other hand, a record number of tourists visiting the state in recent years has kept the tourism industry alive and well.
Other industries that are particularly representative of Colorado, like cannabis and craft beer, are flourishing. Colorado was the first to legalize cannabis — an industry that earned nearly $10 billion in sales last year — and is considered one of the top craft beer cities in the U.S. These industries draw passionate purveyors, workers, and consumers from around the state — and across the country.
But it’s the recent growth in industries like warehousing, healthcare, and food production that will lead to the biggest job gains in Colorado. According to the CDLE, this is a trend that started back in 2020 and is projected to continue through 2030.
Growth in any one of these industries has the potential to attract workers away from other sectors and businesses, especially if job openings are accompanied by good wages, benefits, and more flexibility. As workers continue to re-evaluate their careers and make changes, there’s less of a guarantee that any one industry or business will be able to maintain necessary employment levels. This creates some urgency for small business leaders to develop a hiring plan and HR strategy that can help them attract the workers they need and retain the workers they have.
The Tech Startup Reality
Within the tech industry, the tech startup community in Colorado is booming. Close to $7 billion in private investment was given to Colorado’s fastest-growing startups in 2021 — a year that also saw 1,100 new tech businesses in Colorado.
One of the biggest attractions for starting a tech business here, outside of the high quality of life, is that the cost of doing business in Colorado — including the cost of labor, office rents, and taxes — is still comparatively lower than in California or New York. But those costs are on the rise and could eventually change the picture for startup founders interested in moving here.
One problem that’s true of any startup, no matter where it’s located, is the high rate of employee turnover. Especially among hyper-growth startups, one in four employees leaves their job after a year. The imperative for startups is to grow, which means they have to hire quickly and in volume to meet their growth goals. But with so much attrition, hiring and retaining talent is an ongoing challenge for the startup community. And it’s especially hard for human resources leaders, who are under constant pressure to expand the workforce while working with limited budgets.
Employee retention is ultimately dependent on many different factors: compensation, benefits, cost of living, flexibility, and more. Small business leaders in Colorado, especially tech startups, will be challenged to prioritize employee needs and retention strategies alongside growth and funding goals. Striking a balance will be key in this current tight labor market and in a sector where such a notoriously high turnover has yet to be solved.
Roles & Skills In High Demand
Turning to the workforce itself, there are certain roles that are routinely needed among Colorado businesses. Many of the most in-demand roles are in healthcare, tech, and retail — providing some evidence that these industries are indeed expanding. But businesses in these industries also struggle to find enough workers to fill the roles or can’t keep the roles filled for long.
Based on data in the CDLE’s Labor Market Information database, the roles that are most in-demand as of May 2022 for Colorado, include registered nurses, followed by computer system engineers, retail salespeople, customer service representatives, and general and operations managers. In the Denver, Aurora, and Broomfield area specifically, occupations in healthcare, management, and computers were the most in-demand in April 2022.
Throughout Colorado, basic skills — sometimes referred to as soft skills — like customer service, problem-solving, attention to detail, the ability to be flexible, and interpersonal skills, are highly desired by employers; In fact, those skills just mentioned were the ones listed the most in job descriptions in April 2022, according to the same CDLE database. One reason could be that as more day-to-day tasks get turned over to AI and automation, those soft skills become critical.
One issue businesses struggle with is finding employees with updated skills. The fast-changing tech industry in particular constantly requires upskilling. And there are now collaborative partnerships in the state, such as the one between the University of Denver and Technology Employment Colorado, that are offering tech-skill boot camps to help grow Colorado’s technical talent, especially in the areas of coding, data analytics, and cybersecurity.
Small businesses that are having a tough time filling roles and finding employees who have the required skills could continue to struggle as there simply may not be enough skilled workers available. To make up for the skills deficit, your business may want to invest in more robust training and skills development programs — both for existing employees and new hires. Upskilling employees can help businesses keep a competitive edge, especially in the tech industry, as well as respond and adapt more easily to crises and change.
What Colorado Business Leaders Can do Today
Managing your workforce needs is just one of the many responsibilities Colorado business leaders like you have on their plate. Obsidian HR is locally based here in Colorado and available to support your benefits, talent management, and training efforts and relieve much of the burden you may feel. We can help you navigate the unique workforce trends in our state that will have the most impact on your business, so you can move forward with confidence.
To learn more about our services and get started, contact one of our team members today. To help you deal with one of the other top challenges of being a small business owner in Colorado — download our guide on Colorado’s employment laws and regulations.