Certain industries are in need of workers, but employment in the Knoxville area isn’t that far off pre-pandemic levels.
In June, there were 415,339 employed people in the Knoxville metropolitan statistical area, about 3,600 fewer than February 2020, according to the Bureau of Labor Statistics.
That’s less than 1% off from pre-pandemic employment levels and well above the pandemic low of 354,000 in April 2020.
“The best I can tell you is that overall in the aggregate, it looks like as many people are working now in Knoxville as they were before the pandemic,” said Matt Harris, associate professor of economics at the Boyd Center for Business and Economic Research.
There are also hundreds of new jobs in the pipeline. Last week, international firm IGT Technologies announced it had opened a Knoxville location, had already hired about 150 people and planned to double that workforce locally.
“What’s really happened is that the job market is trying to grow leaps and bounds,” Harris said. “But there’s not the new blood that they’re craving.”
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Shortages focused in certain industries
There are certainly some industries in Knoxville feeling the pain.
According to BLS data from June, employment was down from pre-pandemic levels in leisure and hospitality; education and health services; mining, logging and construction; and government.
Employment was up in manufacturing; trade, transportation and utilities; professional and business services; and “other services.” Employment neared pre-pandemic levels in information and financial activities.
There were 35,929 active job postings in the Knoxville MSA in June, according to the Knoxville Area Chamber of Commerce, down about 2,000 from May. The industries with the most number of job postings were:
- retail (4,852 postings).
- administrative support, waste management, and remediation services (4,638 postings).
- health care (3,946 postings).
- professional, scientific and technical services (3,047 postings).
- accommodation and food services (2,431 postings).
- manufacturing (1,788 postings).
- transportation and warehousing (1,750 postings).
Although the local labor force — the sum of employed and unemployed people in the Knoxville area — grew by 1.2% from May to June, “if every unemployed person in the Knoxville MSA got hired today, they would now be able to fill 58% of the job openings,” according to the Chamber’s most recent economic outlook update.
Knoxville’s unemployment rate was 4.8% in June, lower than in Chattanooga, Memphis and Tennessee, according to BLS data. It was 3.6% in February 2020 and 13.8% in April 2020, its peak during the pandemic.
“Overall, the changes in employment in Tennessee followed national trends but at less severe levels,” according to a report from The Sycamore Institute, a nonpartisan public policy research center. In the state, the largest job losses occurred among low-income positions and hospitality, but those losses weren’t as severe as they were nationwide.
The Sycamore Institute study concluded that slow improvements in employment could translate to slower recovery, higher costs and lower output for businesses and higher costs for consumers.
“Ultimately, if you have problems getting your people where they need to be, that’s going to slow down growth a little bit, but it’s not going to kill it,” Harris said. “It’s just a drag.”
Power in workers’ hands
Multiple industries hiring at the same time gives workers negotiating power and the freedom to make career changes.
“What I suspect has happened, but I can’t prove this empirically, is that people have gone back to the workforce, but they’ve gone back to different jobs than what they had,” Harris said.
Workers might prioritize flexibility, different work hours, remote work or the opportunity to change industries.
The employers getting creative are the ones seeing recruitment and retention success, said Amy Nolan, the Chamber’s vice president of regional enhancement. That could include flex hours, bonuses, same-day pay or limiting hours of operation.
Workers in Tennessee are still incorporating health concerns, caregiving needs and unemployment benefits into their decision making, according to The Sycamore Institute study.
“Perhaps there could be a misalignment of skills and qualifications between available labor and job openings, or a lack of child care options, or misaligned expectations regarding wages and job flexibility, or as many employers argue – too much extra federal money disincentivizing people from working,” a recent Chamber report concluded.
Because the BLS employment data is through June, we don’t yet know how the end of federal pandemic benefits in Tennessee will impact these employment numbers. Those funds, which paid up to $300 a week, ended July 3. Likely the growing threat of the delta variant also will affect employment rates, though that might not show up in July figures.
More jobs coming to Knoxville
Knoxville-area workers will have more employment choices in the next few years after a string of major relocation and investment announcements.
Global tech firm CGI will invest $27 million in Knoxville and create 300 tech jobs here by 2026. Between its Alcoa and Knoxville facilities, Amazon probably will create more than 1,000 jobs in East Tennessee. In May, Lending Solutions Inc. announced 265 new jobs.
“You want to have communities that have job opportunities, and we certainly have a lot of that,” said Doug Lawyer, vice president of economic development for the Knoxville Chamber. “The challenge … every company in the state is struggling with is getting people to go to work. We’ve got to get people back to work. It’s slowly coming, but not fast enough as some of these companies would like to see. I’d rather be on the side of, we’ve got a lot of job opportunities, we just need to find the people.”
The Chamber is beginning new strategies to find those people and bring them here: It plans to recruit more people ages 25-54 to the region; work with the University of Tennessee to retain talent and pair interns with major employers in the region; and increase work visas to recruit specialized talent from abroad to meet job demand.
Transportation and child care remain barriers to employment, and Nolan said the Chamber is exploring how to facilitate transportation to county industrial parks like Forks of the River.
Nolan said the Chamber is thinking long term, including how to create a better jobs pipeline beginning in middle school.
“We can’t stop growing. Economically, growing is what makes us thrive. It’s what makes more businesses open,” she said.
Will more people moving here solve the problem?
People are moving to the Knoxville area. The Knoxville Area Association of Realtors analyzed U.S. Postal Service change-of-address data and found the area gained 17 new net households each day for the first five months of 2021.
But the population relocating here typically is 50 or older, Nolan said, and often comes with jobs in hand.
Knoxville needs younger people in search of employment to move here.
Between 2010 and 2019, the Knoxville region grew its 25-54 age group by less than half a percent, or about 163 people, according to a Chamber analysis of U.S. Census Bureau data.
During that same time period, the 15-24 age group grew by 6.9%.
“That means while Knoxville attracts significant numbers of undergraduate and graduate students to the University of Tennessee and other postsecondary institutions, they quickly move on after graduation,” a Chamber report called “Talent Redefined” concluded.
Growing that age group by 5% would equate to about 16,000 working-age people.
Growth and development editor Brenna McDermott can be reached at brenn[email protected]. Follow along with her work on Twitter @_BrennaMcD. Support our local news efforts by becoming a Knox News subscriber.