The battle for talent continues to dominate strategy discussions for Baton Rouge area businesses, local economic leaders said Tuesday during The Advocate’s Fall Economic Outlook Summit.
The Baton Rouge metro area had about 31,000 open jobs in July compared to 17,000 unemployed workers, said Adam Knapp, president and CEO of the Baton Rouge Area Chamber. Demand is elevated for registered nurses, retail workers and retail supervisors.
Economists have described Louisiana’s low labor participation rate as a “great puzzle.”
Knapp said BRAC has launched a number of efforts to connect people to jobs and to push more residents back into the workforce.
“That mismatch of available talent is one that has been persistent, unfortunately, in the economy,” Knapp said.
Remote work continues to impact some positions, Knapp said. For example, an office administrator can work for an out-of-state company while staying in Baton Rouge, which might save the company some costs and put more money in the worker’s pocket.
“It does change the nature of what economic development looks like,” Knapp said.
Connie Fabre, president and CEO of the Greater Baton Rouge Industry Alliance, said there’s a similar gap between supply and demand for skilled construction workers, plant operators and chemical engineers, particularly with billions of dollars’ worth of industrial projects announced for the region. She said companies have announced nearly $20 billion worth of renewables or clean energy projects alone.
“Demand is still very strong, even though we might have just a little pullback right now due to the recession and so forth,” Fabre said. “Most of the markets are still marching forward, and things are looking good.”
Edgardo Tenreiro, CEO of Baton Rouge General, said the hospital system is still struggling to find enough nurses, physicians and other clinicians to meet demand. “That one does keep me up at night,” he said.
Tenreiro called on businesses with workforce needs to create community engagement efforts that get students interested in particular fields early. He pointed to the hospital’s new partnership with Park Elementary as an example.
Meanwhile, the COVID-induced travel nursing boom is still shaking the market, Tenreiro said, though wages for travel nurses have gone down a bit. He added that Baton Rouge General has hired about 160 staff nurses in the last several months.
“I think that trend will continue and will bring a lot of relief for the hospital systems,” he said.
Knapp and Fabre pointed to the massive influx of renewable investments, and other industrial projects, as a good long-term sign for the economy. Fabre said it could mirror the boom Louisiana saw from 2013 to 2018, when billions of dollars were poured into new industrial facilities here.
Not all companies are looking at transforming their facilities like Shell will do with its Convent refinery, Fabre said. But companies are exploring how to incorporate renewable energies like solar and how to jump on “whole new wave and realization” of carbon-neutral activities.
Industry leaders are continuing to monitor political and community scrutiny of petrochemical activities, Fabre said, adding that oil and gas will continue to be needed even as renewable energy is on the rise.
“The outlook is pretty good, although we have some challenges to overcome,” Fabre said.
Housing inventory up, so are interest rates
On the real estate side, available homes for sale in the Baton Rouge region are up about 29% from 2021, which gives buyers more options, said Kendra Novak, president-elect of the Greater Baton Rouge Association of Realtors and owner of Novak Realty.
However, interest rates have risen from about 3% a year ago to 6% in 2022. Knapp also noted that the median sale price has risen by about $50,000 in the last three years.
New homeowners aren’t quite priced out because of the interest rates, Novak said. The 6% rate is still better than what rates were decades ago, and home prices had been inflated amid a long run of depressed interest rates.
“Everyone wants to go back to the 2%, the 4% interest rates,” Novak said. “And those days are just over.”
Market changes for healthcare
Tenreiro said national trends will play out in the Baton Rouge health care market. He mentioned CVS’ purchases of insurer Aetna and home health provider Signify Health as potential disruptors, as well as Amazon’s entry into health care.
However, those moves can increase competition, which is good for patients and providers, he said.
“As a patient, that’s what you want. As an employer, that’s what you want,” Tenreiro said. “You want the ability to have choices.”
Beyond workforce needs, the impact of COVID-19 is still lingering on the market. Some patients stopped going to routine screenings during the pandemic, which could lead to a rise in cancers and other health issues, Tenreiro said.
However, COVID-19 provided an opportunity for a boom in telehealth, and it spurred Baton Rouge General to reopen the emergency room at its Mid City campus.
“Long-term, I think the impact was negative and positive,” Tenreiro said.