Middle Tennessee businesses say they need more access to capital, less uncertainty about the federal debt and fewer government regulations before they’ll start hiring workers again in bigger numbers.
Otherwise, CEOs of many of the region’s largest companies say they’ll remain reluctant to add jobs even if Congress and the Obama administration offer them fresh incentives to do so.
Mark IV Enterprises, a Nashville-based commercial construction company, has no plans to hire after seeing construction prospects plummet a couple of years ago. Owner Tonya Jones said she let 14 employees go two years ago, and today she hires only when she has a job and contract in hand.
“Hiring someone is a major commitment,” she said, estimating it would cost at least $66,000 in annual salary, benefits and insurance to hire a full-time construction superintendent. “Hiring means confidence, and I don’t have any right now.”
“Until you get an economy that’s really moving forward, most businesses won’t be hiring more people,” said Terry Turner, president and CEO of Pinnacle Financial Partners, a bank holding company here.
Several other executives, from a small-town banker to the top executive of a major manufacturer, generally agree. They said fundamental business conditions — not tax breaks or other government incentives — will drive hiring decisions in the next few months.
“People have got to get to feeling a lot better about spending money,” said Randall Clemons, chairman and CEO of Wilson Bank & Trust, based in Lebanon. “Activity. We need activity.”
For Clemons, that means the easing of credit and brisker loan demand from customers at his bank, which employs 430 people.
“Most businesses have decided in general that they can do the same job with (fewer) people, so even when there is a recovery, you won’t see the level of new jobs we’ve seen in past recoveries,” Clemons cautioned.
At Pinnacle Bank, recent hiring has been limited to a handful of relationship managers, Turner said.
“The folks we’ve hired over the last month or two are in revenue-producing positions” that could lead to hiring more support staff, he said. But “if they don’t produce incremental revenue, we won’t hire more people.”
Gallagher Benefits Services “will add staff when we’re confident it’s needed,” said Karen Saul, Nashville-area president. The human resources firm has added a sales associate and several account managers in recent months, increasing its local presence to about 135 people.
Additional hiring will ultimately depend on confidence — among consumers and business owners, she said. “It’s confidence issues, no question about it. People have been shaken and taken a step back. There’s just so much uncertainty.”
Surveys make pointA trio of recent national business surveys reinforce such an iffy outlook:
A Manpower poll of more than 18,000 U.S. employers found that just 16 percent planned to add staff in the October-December quarter. In Middle Tennessee, it was 15 percent — which was nearly offset by the 13 percent who expect to shrink their payrolls.
A U.S. Chamber of Commerce survey of 1,400 businesses found that 19 percent plan to expand in the coming year, while 64 percent intend to keep employee levels steady.
Almost 41 percent of small businesses participating in a Pepperdine Private Capital Markets Project and Dun & Bradstreet Credibility Corp. study said they plan to hire in the next six months. But almost as many, 38 percent, had no hiring plans.
Hiring anxiety stems from uncertainty over the economy, the ballooning federal debt and the reluctance of Congress and the president to work together, said Jim Burnett, chief development officer for SMS Holdings Corp.
The company offers security and maintenance services in places as diverse as shopping malls and airports. It employs 13,500 people nationally.
“The market and employers need certainty,” Burnett said. “It’s important for the president and Congress to work together; … that basically has companies in a holding pattern.
“When you see zero job growth (nationally) in August, that’s a concern. If other people aren’t hiring, that could impact our company. As our customers go, we go.”
Despite such angst, some Middle Tennessee companies say they’ve made small to significant additions to their payrolls in recent days.
For example, Clarcor Corp., a manufacturer of truck and industrial air filters, recently announced it will add 70 jobs in South Dakota because of increased demand from its customers.
“To me, that’s pulling the trigger” on hiring, said Norm Johnson, the Franklin-based company’s chairman and CEO. “It may not be a big gun, but it’s still a shot.”
But future hiring by the niche manufacturer, which has 5,600 employees worldwide, “will be strictly based on the demand for our products,” Johnson added.
And even then, the job growth won’t necessarily be at a blistering pace. Initial steps will be to improve the productivity of existing workers, and also use overtime hours to fill orders.
Tractor Supply, a Brentwood-based farm and ranch retailer with stock publicly traded on Wall Street, has opened more than 50 stores nationally and added 1,100 employees this year.
That gives it more than 15,000 people on the payroll, Chairman and CEO Jim Wright said.
But for hiring to pick up for corporate America as a whole, Wright said, consumer confidence barometers must improve by at least 10 percentage points over several months.
“What we want to see is whether consumers feel better about the prospects of keeping their jobs or not losing their jobs,” he said. “The key is job security.”
Faith in startupsMark Rowan, president of Griffin Technology, which makes accessories for iPhones, iPods and other Apple products, thinks entrepreneurs are the answer to the nation’s slack economy.
The privately held company has expanded its payroll by more than 10 percent to 200-plus employees in two years because of risk taking, Rowan said.
“The company is 20 years old, but we still think like a startup, so risk is something we’re comfortable with.”
He predicts it will be startup businesses, not Fortune 500 companies, that do the most to spark significant job creation.
“The companies standing on the sidelines are not going to solve the problem,” Rowan said, citing previous economic recoveries led by new ideas and novel business models. “Some companies saw the future pass them by. Looking back has never moved the economy forward.”
