Chad Sugg left ServiceSource in Nashville in 2017 for a job at a consulting firm but returned to the tech sales and services firm one year later. The departure brought him a raise, and his return to the company brought him a promotion and greater opportunity. In each case, he was not seeking out a new job.
"I wasn’t looking to leave," Sugg, 43, said of his initial exit from ServiceSource. "I enjoyed the role I had."
In Nashville, where the unemployment rate has hovered at close to 2.5 percent since September and where several companies are reporting rampant growth, it is a job seekers’ market. In March, Nashville was tied with San Francisco and San Jose for the lowest unemployment rate among large metro areas, significantly beating the nation’s 3.9 percent rate, its lowest since 2000.
For many companies, the demand for workers is playing out in more aggressive recruiting, company trips, a greater focus on culture and pay increases.
Antioch-based trucking logistics firm Cavalry Logistics has begun paid promotions on social media to advertise 100 jobs the company is adding this year. To encourage referrals from current employees, Cavalry will hold a raffle at year-end, offering up a flat-water kayak, a TV and a Coleman charcoal grill. If a new hire passes a 90-day threshold, the person who referred them receives a bonus.
"We are going to be very shorthanded for the amount of business our customers are going to be throwing our way," Cameron Grady, a Cavalry Logistics business analyst, said of the upcoming peak season for trucking. "We are not having a problem finding the business. We are struggling to get enough people to manage it."
Since Cavalry Logistics moved to the former Best Buy site in Antioch two years ago, many new businesses have cropped up nearby, further challenging the company’s hiring process, Grady said. The company is having to be more proactive at local colleges and is hosting a hiring day this week to find candidates.
In addition to promoting employees, Calvary has also focused on its daily culture. The company hosts food trucks, offers casual days and installed a basketball goal, pool table and ping-pong table. During the recent Winter Olympics, the office held a skateboard luge and roller hockey.
"Logistics can get hectic," Grady said. "We try to encourage small breaks."
Bill Fox, an economist at the University of Tennessee at Knoxville, said Nashville’s unemployment rate is especially noteworthy given the amount of people moving to the city with or without jobs, a trend that should help mitigate the tight labor market. The Nashville area’s population has increased 9.4 percent between 2010 and 2016.
"When the word is out that job growth is very strong in Nashville, people move without jobs," Fox said. "Still you have this low unemployment rate. It is owed to really good job growth."
While wages have increased incrementally, economists have expected more significant movement, given the national unemployment numbers, Fox said.
"That is certainly a surprising factor, that it hasn’t been more robust," he said. "What you’ll hear is economists saying at some point this will start going up and maybe that will be soon, but we’ve been saying that for a few years."
Instead of rewarding through increased salaries and wages, companies might be making schedules more flexible or adding more hours, he said.
Per capita income has increased in Nashville, more so than national rates, suggesting that earnings are climbing overall in the Nashville area, according to Fox.
"Housing is expensive in the Nashville area," Fox said. "To get people to move into that area, to get people to stay in the area, wages and income generally need to come up."
Employees at ServiceSource celebrate quarterly performance at their downtown office
Entry-level pay at ServiceSource has increased “significantly” in the past five years, said Michael Poe, ServiceSource’s Americas president. Higher earnings are achieved through meeting short-term targets and climbing to new sales levels, he said.
“We just watch what’s happening to Nashville,” Poe said. “I have 100 managers in our Nashville office. They know their reps are looking for apartments and that the rent is going up or that it is hard to buy a house now because real estate has gotten so expensive.”
To access a greater talent pool, ServiceSource, which employs more than 700 Nashvillians, leaves the door open for employees who leave. Poe described Sugg’s return to the company part of as the "boomerang metric," an indicator of return employees that has been increasing in recent years. With a growing number of emerging tech companies in Nashville, some employees will try a new opportunity but will ultimately return to ServiceSource.
“If they have been achievers and valued producers in our business, we tell them, ‘Go try it, we wish you well,’” Poe said. “If you are not happy, call us back. … A lot of times they are even more valuable when we get them back because they have learned something new and they have a refreshed perspective on the value of our culture when they come back. It’s an important message."
To remain competitive, Poe said ServiceSource is “really big on rewards and recognition.” At the end of each quarter, ServiceSource ends Friday early and hosts a "dance party" for its entire staff. In March, the company took 60 employees to Fort Lauderdale for three days, where they played golf, dined on the beach or swam in the pool. Poe said the company had scaled back the travel a few years ago, but he brought back the quarterly events last year.
“With millennials, there is just an expectation, you better have a good culture and make it fun and empower and not micromanage or you’re going to be in trouble,” Poe said.
Poe said the company has not felt the pressure of the low unemployment rate, especially for entry-level roles because of the amount of young people flocking to Nashville in general. But as the company hires for more experienced roles in Nashville, the process takes longer.
“We do have to work a little harder on some of the newer, high complexity roles we are creating," Poe said. "The more technology experience you require, the smaller the pool is going to be."
To confront employment challenges, Hugh Thomas at Onin Staffing is turning to alternative benefits, including reimbursements for employees who carpool, through local app Hytch. While the app’s goal is to get cars off the road, Hugh sees it as part of a retention strategy.
"We are constantly seeking ways to beef up our commitment to our teammates so they will stay on board," Thomas said. "You can’t expect to just sit around your office and wait for people to come in your door. You have to go out and recruit."
Reach Jamie McGee at 615-259-8071 and on Twitter @JamieMcGee_.
Unemployment rates in March
National: 3.9 percent
Tennessee: 3.4 percent
Knoxville: 3.2 percent
Memphis: 3.9 percent
Chattanooga: 3.5 percent
Per capita income in Nashville MSA
Unemployment among large U.S. metro areas in March
Nashville: 2.7 percent
San Francisco: 2.7 percent
San Jose: 2.7 percent
Denver: 2.8 percent
Indianapolis: 3 percent
Austin: 3.1 percent
Milwaukee: 3.1 percent