State government is already one of Minnesota’s largest employers, and its ranks are about to multiply as it adds a legion of new workers to help enact an expansive agenda the DFL-controlled Legislature passed this year.

The hiring starts amid the tightest labor market in a generation.

“It’s reasonable to assume that we are going to hire at least a couple thousand people over the next couple of years,” said Minnesota Management and Budget Commissioner Jim Schowalter, whose agency leads state hiring efforts. “That’s going to be a major lift and an opportunity to get a more diverse workforce, hire more veterans and really stock our talent pool.”

The state needs to add more than 400 new employees by 2026 to run Minnesota’s paid family and medical leave program. A commissioner and more than 200 workers are wanted to oversee the legalized marijuana market. Hundreds more will be required to run new or expanded education, housing and energy programs.

“It’s got to be one of the biggest, most impactful sessions in terms of the creation of new state jobs that I’ve ever seen,” said Minnesota Business Partnership Executive Director Charlie Weaver, who served in two former governors’ administrations. “And it does come at a time when we’ve only got 2.8 percent unemployment rate in Minnesota, where the competition is already fierce.”

Clashing over government growth

The state’s next two-year budget will grow from roughly $52 billion to almost $72 billion. The nearly 40% jump will fuel the hiring burst, expanding a current state workforce of about 41,000 people, not including those working for colleges and universities.

Agencies are still poring over the new budget to figure out how many employees they’ll need, but new hires will be required in almost every one of the state’s two dozen cabinet-level agencies. Much of the new state spending is one-time, so some jobs will be temporary.

The Office of Cannabis Management will create about 100 new state jobs, but more than 100 additional hires will be spread out across a dozen departments to help with regulation and enforcement.

Lawmakers created a new state agency — the Department of Children, Youth and Families — that will shift staff from two other agencies but also require 10 temporary new employees to make that transition. Once it’s set up, new full-time employees could be needed.

Republicans say thousands of new hires over the next few years — and potentially more into the future — create a rate of government growth that’s unsustainable.

“In a tight labor market that we’re having right now, trying to siphon off so many people to do things for the government rather than in the marketplace is going against our ability to sustain the tax revenue that we need to keep up with this growth,” said Senate Majority Leader Mark Johnson, R-East Grand Forks.

House Speaker Melissa Hortman, DFL-Brooklyn Park, said Republicans are focusing on the wrong measurement. Yes, she said, they will add Minnesota Housing staff after putting $1 billion toward housing, and workers to administer hundreds of millions more in early learning scholarships.

“The metric is, are we closing equity gaps in homeownership? Yes, we will be doing that,” Hortman said, or in early education, “What we looked at was: How many children will we serve? Not how many [full-time equivalent positions] will it take to administer the program.”

Hiring will be tricky, Hortman acknowledged, but said the new laws could attract workers.

“There will be people moving to Minnesota for reproductive freedom, for being able to access the health care that they and their families need and for the investments that we’re making in education,” she said.

Competing with private sector

Minnesota’s unemployment rate is tighter than the already low national average. And the most recent statewide jobs numbers from April show about 41,000 fewer workers in Minnesota than before the pandemic.

“That puts a lot of challenges on the state to find workers, as it does the private sector,” said Alan Benson, a Carlson School of Management associate professor who researches hiring. And he said the state has a more limited set of options to entice workers.

Private sector employers can come up with creative policies “almost on the fly,” offering temporary signing bonuses or allowing people to work from home, Benson said. State government must follow requirements around pay fairness and transparency, and many jobs are in-person, he said. Job security, traditionally one of the big selling points of government work, has less value now.

“That’s not such a great carrot … when the labor market is so tight and people know that if things don’t work out now, then they can always find another job somewhere else,” he said. “And probably one that pays more.”

The recovery of government jobs in Minnesota post-pandemic has lagged the private sector rebound, due in part to early retirements, comparatively static wages and less nimble hiring processes, according to a recent Department of Employment and Economic Development report.

As the state competes for new employees, it needs to rethink the overall compensation package offered to workers, said Megan Dayton, president of the Minnesota Association of Professional Employees, which represents more than 15,000 state employees.

“We have great health care benefits, but they have been eroding for some time,” she said. “This is a unique opportunity to invest in public employees.”

The GOP-aligned Minnesota Business Partnership represents companies employing about 500,000 Minnesotans. Weaver said lack of available talent has been members’ top issue for more than a year. He predicted the state will need to outsource some jobs in the paid family and medical leave program, which he said will involve complex work handling people’s benefits.

But Schowalter said he sees new positions as “first being for Minnesotans.” The state has shifted to more telework since the pandemic, but he said they aren’t looking for fully remote workers outside the state to fill some of these new jobs.

While the government can’t offer the same financial rewards as many private sector companies, Schowalter said he has already gotten calls from people who heard about the new laws and want to work for the state. They have different roles to fill, but many are attracted by the common thread of public service.

“The kinds of jobs with the state have purpose, they serve the community and they enable personal growth,” he said. “That is intrinsic to what we do and we’re trying to make sure people understand that.”

Gov. Tim Walz’s Chief of Staff Chris Schmitter said the state is well prepared to implement the big changes of this session. They were ready to launch the Office of Cannabis Management website shortly after the bill passed and quickly debuted a site for the new Department of Children, Youth and Families.

“We also have a thoughtful team that’s been working over the course of the last four years to make the state an employer of choice,” Schmitter said. “We feel comfortable and confident that we’re going to be able to hire the talented folks we need.”