Keeping company

Nationally and locally, the numbers are downright ugly. Tennessee’s unemployment rate jumped almost a full point in December to 7.9 percent — easily topping the national 7.2 percent rate — and big local names like Bridgestone and DuPont last week said they plan to lay off hundreds of workers each. Last month, hospital titan HCA laid off roughly 100 workers from its headquarters.

December didn’t deliver the usual holiday employment bounce. Instead, Tennessee companies laid off more than 15,000 people. Looking ahead, a report published recently for the U.S. Conference of Mayors says Nashville companies will lay off another 15,000 people this year, or 2.0 percent of the region’s total labor force.

From health care to technology and finance to retail, employers are being forced to make tough decisions about trimming jobs and services. But despite the dour situation, there is a brighter side to the current shakeup, albeit one that’s hard to see for many.

Those executives who can perceive the upside are the ones in the fortunate position of being able to hire (or replace) employees. With talent hitting the streets from nearly every corner of the economy, they have a much broader and deeper pool from which to fish.

“In times like these, employers have the pick of the litter,” says Derek Thomas of Kingsport, Tenn.-based Silver Creek Technologies, which helps companies with their hiring.

Tracking and training are key

Like so much in the economic cycle, this situation is nothing new. Around the turn of the century, following the burst of the dot-com bubble, droves of programmers and other sharp IT and finance pros were left hanging as the hot-shot companies employing them went supernova one after the other.

The survivors of that downturn — or the new companies launched at the time — were able to snatch up scores talented workers from their fallen competitors. Among the local success stories launched then is e-mail marketing service Emma, which now employs about 75 people.

Today’s turbulent market is similar in many respects to the tech bust. The market is being flooded with hundreds of quality workers who find themselves in need of a job. Companies such as Silver Creek have made a living of helping businesses sort through that sea of applicants as well as track employee performance in the name of cutting turnover.

Silver Creek partners with a couple of Nashville’s well-known restaurant chains, a sector notorious for having turnover issues. Its Web-based hiring and performance tracking tool helps companies select the most suitable candidates for job openings by making the application process more comprehensive. In addition to the standard application, the system also has employees take tests in such areas as reading, language skills and rudimentary mathematics along with an “attitude survey.”

The system allows managers to review those results online and facilitates subsequent performance evaluations, which include a review from the employees themselves. The ultimate goal: Identify the best job candidates and hold on to the highest-value people once they’re hired.

Silver Creek has worked with popular West Nashville chain Bread & Company for nearly two years and recently announced it has partnered with Nashville’s Sagittarius Brands, which runs fast-food franchises Captain D’s and Del Taco.

Taking a similar approach to improving its hiring and turnover practices Lebanon-based Cracker Barrel Old Country Store. By emphasizing training, teamwork and flexibility, the restaurant chain has gradually lowered its annual turnover rate from more than 160 percent early this decade to roughly 90 percent now – a trend that has saved the 60,000-person company millions each year.

Crucial to sustaining that trend has been the focus on handling new employees once they're on board. Spokeswoman Julie Davis said the program teams new hires with individual managers for their first 30 days. This strategy, she says, helps newbies settle more quickly into their jobs and soak up “the restaurant's culture.”

That in turn helps stores lower their training costs and allows managers to be more selective when they do need to hire because they have more time.

White-collar regeneration

The white-collar end of the job market hasn’t been immune from the recent turmoil. Some expensive employees have had to either take a pay cut or be sacrificed on the altar of the bottom line.

Take for example Cummins Inc., which boasts a healthy Nashville presence and which this month announced plans to trim its global white-collar work force by at least 800 and cut its top executives' pay by 10 percent next year. Similarly, Caterpillar — which runs its financing operations from West End Avenue — announced before Christmas that its executives will have their pay cut in half this year, while senior managers’ pay packages will shrink by up to 35 percent.

Such moves aren’t the exclusive domain of big employers, either. Many players in the financial world have had to shed accomplished-but-expensive managers, decisions that already are reshaping the landscape. Along with start-ups have come a number of new local outposts from firms like New York-based investment bank Shattuck Hammond and health care consulting outfit Stroudwater Associates.

More broadly, laid-off executives — or senior managers who grow restless amid the stasis of a slow economy — will strike out on their own with new concepts or better mousetraps. They will often make their way to venture capitalists, many of whom are seeing an increase in deal pitches. The entrepreneurs funded by those gatekeepers of capital will likely have their pick of strong candidates in the coming months.

The long and the short of it is that this is a time of upheaval. Hard times force a reshuffling and real talent won’t stay on the market for long. But before the market again finds a solid footing, opportunities will abound. The lesson for employers: If you are going to hire, be choosier than ever.