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  Employers Flock to Fargo


FARGO, N.D. -- It's never been easy for Fargo, described by a former economic-development director as "the least photogenic place in America." The 1996 hit movie "Fargo" didn't help, depicting a desolate wasteland of harsh winds, hip-deep snow and graphic violence.

But this metropolitan area of 175,000 is showing that business opportunities in the frigid tundra can be surprisingly hot. As most of the nation struggles to shake off the recession, Fargo's economy has stayed strong and steady, attracting investment, adding jobs and extending a decade of prosperity.

Now, Fargo is facing the opposite problem that much of the nation has: It's starting to run out of workers.

Employers increasingly have to look elsewhere to fill openings -- and attracting them to Fargo isn't easy. When out-of-state prospects balk at the thought of Dakota winters, Candice Dietz, president of Fargo employment agency Preference Personnel, counters by offering to throw in a snowmobile or two. "Haven't had any takers," she says.

In October, the latest figures available, Fargo posted the second-lowest unemployment rate of any metro area in the nation, 1.8%, less than a third of the national average. Employment here grew 5% between January and October 2002, compared to 2% job growth nationwide.

How did Fargo attract so many employers? After all, it lies in a region considered so hopeless 15 years ago that a pair of professors recommended the federal government turn it into a buffalo preserve.

Local leaders had no illusions that the climate and scenery were going to sell their community. So while most midsize cities spent the 1990s pitching hard-to-define "quality of life" to recruit companies, Fargo promoted the quantity and quality of its labor force.

Local business groups financed detailed surveys that not only pinpointed a skilled work force (more than 40% with two-year college degrees or better, compared with 30% nationally), but also demonstrated that these workers were readily available. The first surveys, conducted in the early 1990s, showed that within a 30-mile radius of Fargo, some 45,000 people were "underemployed," many in low-paying jobs for which they were overqualified, and that they were eager to offer their farm-bred work ethic if given a better opportunity.

Companies bought the pitch. Cargill Inc., the Minneapolis-based conglomerate, says local employees have proved so productive and able to adapt to technology that it has been able to run its Fargo accounting center with half the 250 employees it originally estimated when it located here in the mid-1990s. Navigation Technologies Inc., a Chicago-based maker of digital maps, says the productivity of its North Dakota workers helped persuade it to shut down production in Sunnyvale, Calif., last year and consolidate operations in Fargo.

SEI Information Technology Inc., a technical support firm, also of Chicago, has more than doubled its Fargo work force over the past 18 months to 275 and plans to add 25 more jobs by the end of the year.

Manufacturing employment in Fargo has grown by 1,000 jobs since 1995, and continues to expand while U.S. factory jobs decline. In October, Marvin Windows & Doors Inc. of Warroad, Minn., announced it would open a second plant in Fargo, adding up to 100 jobs to a cluster of window makers and suppliers that already employs about 800.

But success is gobbling up the very resource that launched it. Two years ago, a work-force survey showed that the number of underemployed had plunged to 13,000 -- just barely above the 12,000 jobs existing employers estimated they would need to fill in a few years. Meantime, the rural counties that have long replenished Fargo's labor pool are drying up as young people leave the state to escape struggling farm economies: The 20-to-34-year-old group shrunk 23% in North Dakota in the '90s, compared with 5% nationally.

The looming labor shortage has become such a concern that voters considered a ballot measure earlier this month to give tax breaks and $1,000 annual student-loan payments to young workers who stay in the state. Opposed by much of the political and business establishment, the measure failed, but recruiting workers remains near the top of the state's agenda. The state legislature appropriated $237,500 last year to help lure talent, some of which helps support, a Web site listing jobs at North Dakota companies. Gov. John Hoeven even telephones certain people considering jobs in the state and urges them to accept.

Dakota expatriates are a particular recruiting target. As opportunities improve, political and business leaders hope they will return.

Michael Olsen, a Fargo native, thought he would never come back when he left the state in the early '80s to work as a senatorial aide in Washington, and later for a public-relations firm in Minneapolis. But a few years ago, he made a business trip to Fargo to visit a potential client, Great Plains Software, a home-grown company. Instead of luring Great Plains as a client, Great Plains lured him: Chief Executive Doug Burgum recruited Mr. Olsen to run the company's corporate communications. Mr. Olsen jumped at an opportunity he thought he would never see: working for a growing, international company and living in North Dakota. "Kids, we're going home," he told his children, who had never lived in the state.

It's a tougher sell for non-natives. Karen Edwards, an Illinois native, says she was happy in Houston, when her husband, Jeff, told her Great Plains was recruiting him for a job. She asked where the job was. He said it was a great company. She asked again where the job was. He said it would be a great opportunity. She asked where the job was a third time. "Fargo," her husband said. Ms. Edwards started laughing.

Ultimately, Great Plains -- now called Microsoft Business Solutions since Microsoft Corp. bought it for $1.1 billion last year -- offered a job to Ms. Edwards, too. After a visit, she agreed that Fargo would be the right place to raise a family, with its good schools, friendly people, low cost of living and little crime. In March 2000, they moved to Fargo to take jobs as marketing executives. They have renovated a century-old home and are living a "really, really nice life," says Ms. Edwards. She adds: "We look at it as the next adventure in our lives. We don't know anybody else who packed up and moved to Fargo."

Community and business leaders concede that Fargo isn't for everyone, but insist that if the local economy can provide good jobs, the area will continue to attract people like Mr. Olsen and the Edwardses -- and persuade more of the 20,000 college students in area to stay after graduation. That is, as long as companies don't get cold feet about moving to Fargo or expanding their operations here because they fear they can't find enough workers -- a challenge Fargo so far has managed to overcome.

"People have made a career predicting the doom and gloom of the prairies, but there are tremendous opportunities" says Joseph Chapman, president of North Dakota State University in Fargo. Besides, the winters really aren't that bad, adds a dead-serious Fargo Mayor Bruce Furness: "We only get one week of 35 below."

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