Employers in Tennessee are still struggling with workforce issues, and they’re turning to schools to help.
The Tennessee Manufacturing Road Show stopped at Crossville, Inc. Oct. 19 to discuss challenges in manufacturing with a panel discussion regarding workforce development.
Bradley Jackson, president and CEO of the Tennessee Chamber of Commerce and Industry and Tennessee Manufacturers Association, noted Tennessee has achieved high marks as a business-friendly state.
“Tennessee is one of the top 10 states in the nation for our manufacturing strength,” Jackson said during the event.
Manufacturing employs 353,000 people in Tennessee — 11% of the workforce — and offers above average compensation. The state is home to five original equipment manufacturers in the motor vehicle industry, but also has a strong presence in food, beverage and tobacco manufacturing, chemicals, fabricated metal, appliances, machinery and tile.
Its location, tax policy, and right to work policies attract business, Jackson said. And, trends show a decrease in Chinese imports in recent years.
But businesses are still facing challenges.
“Tennessee has been on the cutting edge of a lot of things, like Tennessee Promise,” Jackson said. “We’re only one of 4-5 states that offer that. It’s a huge advantage to employers when you can show them we can help create a talent pipeline.”
But Tennessee lags other states in workforce participation. The state reported a 59.4% labor participation rate in September 2023, according to the U.S. Bureau of Labor Statistics, falling behind neighboring states like Virginia, which reported a 66.8% labor force participation rate.
“That gives them 175,000 additional people in their workforce,” Jackson said. “There’s a lot of challenges to figuring out why people who are able to work are not engaged in the work force.
“And, we’re still missing 1.8 million pre-COVID workers.”
Wages have been increasing, which has posed a challenge for employers, Jackson said. At the same time, wages are not keeping pace with inflation.
Cliff Wightman, president of the Tennessee College of Applied Technology Crossville and Livingston; Leslie Eldridge, supervisor of Career and Technical Education with the Cumberland County School System; and Adam Poe, vice president of the Highlands Economic Partnership, fielded questions on how the local community was working to build a workforce equipped for high-need careers. The three agree partnerships are critical to developing a skilled workforce.
Eldridge said the school system and TCAT system had partnered to increase dual enrollment opportunities for students, giving them an early start on post-secondary education. The schools increased participation in those programs from 79 students in 2022 to 355 students this school year.
Wightman said TCAT also partners with industry to create custom programs for a specific need. They also rely on their advisory boards, made up on industry professionals, to ensure their curriculum remains current and relevant to local industry needs.
As important as it is to offer opportunities to build skills, people also need to be aware of opportunities in the region.
Poe said a survey of spring 2023 graduates at Tennessee Technological University found fewer than 18% of the students had a job lined up for after graduation.
Next, he asked where they planned to go after graduation.
“The overwhelming response was Nashville, Knoxville or Chattanooga. Why? To be able to go get a job,” Poe said. “At the foundation of all of this is education. It’s letting people know that median household income has grown $6,000 a year, year-over-year. We’re trending in a very good direction and we’re blessed to be in this area of the country with so many great qualities and culture.”
Wightman said childcare was a significant issue for the workforce.
“That comes up more and more and more,” he said.
There’s also a perception of manufacturing that isn’t accurate in modern manufacturing, Wightman said. Today’s manufacturing is highly automated and highly skilled, he said — and parents and youth need to understand the opportunities available.
Eldridge said there is a need for parent and family involvement to understand the benefits of early dual credit opportunities or earning an industry certificate while in high school.
Poe added emotional intelligence was needed across the workforce.
“Make the investment so the current workforce has the self-awareness and organizational awareness and conflict resolution where teams continue to grow their organizations together. I think that creates a culture of excellence,” Poe said. “That word spreads. When people love where they work, they share that with their friends and their family. That’s your best recruitment.”
Tennessee Speaker of the House Rep. Cameron Sexton noted early in the meeting that business issues are often interlocked with other pressing issues.
“You start working on one issue and it’s connected to this issue, and it’s connected to this issue,” Sexton said. “That’s the simplest aspect, but that makes it very complicated.
“For example, if you want to work on criminal justice and have less people commit crimes, you’ve got to start with K-12 education. You’ve got to start with them having the ability to have a skillset. You also have to talk about health care and we’ve talked about mental health and how that impacts a family.”
Sexton reviewed policies enacted in recent years to help businesses grow in Tennessee, including changes to the state’s business tax structure. That includes raising the business licensing threshold from $10,000 to $100,000 and increasing the exemption to the franchise tax to $500,000. Another change moved to a single sales factor apportionment formula, which aligns with other states.
“We have lots of stuff we’ll roll out at the end of the year that is outside the box,” Sexton said. “In the long-run I think will be beneficial. It will be a long conversation.”
Sexton pointed to new development, like Flatrock Motorsports Park currently under development in Eastern Cumberland County. The Southeast U.S. has seen significant business growth in recent years, he added, and surpasses the Northeast in Gross Domestic Product in 2021.
“As we look at everything that’s happening in our state, we are on the verge of blowing out what we thought was possible in Tennessee,” Sexton said. “You see policy differences. You see people saying they can move to the South. Businesses have changed. We’re very transient. You can open a business and run a business almost anywhere you want.”