Back off, Bezos: These Nashville CEOs are ready to fend off Amazon
SOURCE: Nashville Business Journal
On a February morning in the Gulch, a group of Asurion executives stood next to a pile of dirt, wearing hardhats and holding shovels as cameras flashed inside a tent.
They were there to celebrate the groundbreaking for the company’s $252 million, 552,800-square-foot headquarters — one whose very design is meant to help attract and retain up to 2,000 employees, with features ranging from outdoor terraces the size of a football field to coffee shops and dining.
“It’s an amazing asset for us. It’s going to be a while before we move in, but the renderings give us an opportunity to say, ‘If you join, this is where you’re headed,” Asurion CEO Tony Detter said.
The view of Asurion's new planned headquarters from 11th Ave.
PHOTO COURTESY OF ASURION
It’s a concrete example of how area companies are beefing up their brands, offices and benefits to compete in an increasingly tight labor market, a market that is about to include a tech goliath hungry for employees: Amazon.
Amazon.com Inc. announced its 5,000-job Nashville Operations Center of Excellence in November, the largest jobs announcement in state history. Music City’s business community has largely welcomed the e-commerce giant, seeing the Amazon brand and the high-paying jobs it brings as an economic boom for the city. But as Amazon begins its campaign to hire at least 400 workers this year, employers large and small could feel the effects of a workforce already not big enough to meet demand.
From large hospital operators to tech startups, from third-party logistic companies to professional services firms, businesses across Middle Tennessee are crafting plans to fight for Nashville’s talent. Even longtime Nashville employers like HCA Healthcare Inc. have seldom faced a company that can compete in pay and resources the way Amazon will be able to, while smaller startups that can’t compete on salary must find creative perks to keep employees happy.
To be sure, Detter and other area executives say having Amazon in town will attract workers to Nashville, deepening the city’s talent pool over time and benefiting companies across the city. But if Amazon focuses its efforts on hiring locally — as Senior Vice President for Worldwide Operations Dave Clark has said the company intends to do — employers that don’t have a plan for retaining and hiring employees may be in for a short-term crunch.
“We’re really trying to recruit locally here in Nashville, across Middle Tennessee and the state in general. We think opening in Nashville is going to unlock a lot of talent locally,” Clark said. “We’ll take them all locally if people locally meet the qualifications for the job. That’d be fantastic.”
Stressful in Seattle
Washington Federal Bank has been around for more than 100 years, but for the past two decades it has experienced firsthand the effects of Amazon’s rise in Seattle. Amazon employs more than 40,000 people in the city spread across 37 offices, many of them in high-paying jobs at the company’s downtown headquarters.
Washington Federal President and CEO Brent Beardall said Amazon’s presence in Seattle has made everything more expensive, including the salaries for clerks and executive assistants. But Amazon also has been good for business, according to Beardall, and Washington Federal has found ways to adapt when looking for talent.
“To think we are going to compete with Amazon is foolhardy,” Beardall said. “Like most things in life, it’s a double-edged sword. … We’ve looked at this as an opportunity to evolve.”
Part of that evolution has meant having fewer but better-paid employees, he said, relying more on automation. Washington Federal also has moved most of its back-office jobs to cheaper markets like Boise, Idaho.
But maybe the most important change has been the bank’s pitch to prospective employees. Washington Federal’s Director of Communications Brad Goode said when competing against Amazon for a hire, he makes sure to stress that job candidates have more autonomy to make an impact at Washington Federal.
Goode said his past three hires in the bank’s marketing department also were interviewing with Amazon.
“We had to do a better job of selling the company,” Beardall said. “My challenge to everyone is love what you do and make a difference, and it’s a lot easier to make a difference at Washington Federal than Amazon.”
Managing Shareholder Kelly Noonan has been at Seattle’s Stokes Lawrence for 30 years. She also has seen the impact of Amazon on the city and her law firm. While it’s still relatively easy to hire talented lawyers, she said, finding and retaining staff such as law clerks and paralegals has become much more difficult.
Noonan said her firm tries to counteract that through transparency to create a positive culture that keeps employees engaged. The firm holds quarterly meetings with the entire staff where leadership shares the firm’s financials, successes and areas for improvement.
“People want to contribute; they want to be heard,” Noonan said. “So we try to be really intentional about nurturing that kind of workplace for our employees and the people we hope to recruit.”
That sort of personal engagement is why Nashville tech upstart Beachy Co. CEO Matt Houston doesn’t think Amazon will be able to recruit many workers from local startups.
He said the kind of people who like to be part of building a company aren’t likely to want to work for a corporate giant like Amazon. Companies the size of Beachy, whose platform lets resort guests reserve beach chairs online, offer a culture, flexibility and opportunity that larger firms can’t, Houston said. For example, each of Beachy’s 15 employees owns shares in the company and has weekly individual meetings with leadership.
“There is the same chance that [Amazon’s arrival] is really helpful to companies like mine as it is that it’s detrimental. It could establish a talent ecosystem that we don’t have currently,” Houston said. “But there are different risk profiles between working at Amazon and working at a startup. … I don’t think there are many people that would be happy equally working at either Amazon or Beachy.”
Getting personal
Atiba Software LLC founder and CEO JJ Rosen knows his company doesn’t have the resources to outspend a company like Amazon, but he’s competed with bigger companies before.
Two years ago, when he found out an employee was leaving for a larger firm, Rosen asked what he liked and didn’t like about his time at Atiba.
Atiba gave employees a few perks throughout the year to support morale, like a holiday party and free lunch delivered to the office every two weeks. So Rosen was surprised when the employee said he dreaded those events because he was uncomfortable socializing in group settings.
“That was interesting to me, because we were buying him lunch, but it was making his day worse,” Rosen said. “It’s sort of like if you give someone a gift, but they’re actually offended by it. It’s kind of a lose, lose.”
JJ Rosen, founder and CEO of Atiba Software, customizes his company’s perks to each of his employees to help retain talent in the city’s tight labor market.
BEN MATTHEWS | FOR THE NASHVILLE BUSINESS JOURNAL
That’s when Rosen started a personal perks plan for his employees. Instead of giving the same fringe benefits to his entire staff, Rosen met with all 80 of his workers individually and asked, “What can Atiba do to improve your life?”
Some wanted help losing weight, others asked for new tech hardware, several wanted more skills training and one said she’d like Friday afternoons off to spend time with her child. With a little bit of bargaining, Rosen said all requests were met.
The program has been so successful that Atiba’s leadership now meets with every employee once a year to find out which perk could help them. Rosen said the program usually costs the company a little less than $1,000 per employee, but it is cheaper than recruiting and training a new worker or missing out on a project because of a lack of staff.
“For a smaller company, really personalizing perks for our employees is a way to compete with bigger companies like Amazon, which may have a harder time giving that attention,” Rosen said. “We can really customize, on an employee level, what is going to keep them with our company.”
Clay Massie is a software developer at Nashville tech company Atiba. Tech employees like Massie are in high demand locally, especially with giants like Amazon opening offices here.
BEN MATTHEWS | FOR THE NASHVILLE BUSINESS JOURNAL
Mission-driven
HCA Healthcare has been royalty inside Nashville’s business scene for years, but Amazon’s arrival could threaten the hospital giant’s claim to the throne.
HCA employs about 11,000 people in Nashville, more than half of whom work in the company’s IT group, making HCA one of the largest tech employers in the city.
Marty Paslick, HCA’s senior vice president and chief information officer in charge of HCA’s IT group, said it’s not salary and benefits that enable the tech division to have one of the lowest turnover rates in the company — it’s the mission.
Marty Paslick, senior vice president and CIO of HCA Healthcare Inc.
NATHAN MORGAN | NASHVILLE BUSINESS JOURNAL
“We really try to make sure we are providing purpose and meaning to technologists,” Paslick said. “We want our employees or recruits to understand their tight relationship to the bedside.”
To do that, Paslick said the tech group has developed a program that brings its employees behind the scenes of HCA, taking them to TriStar Centennial Hospital, Sarah Cannon and the company’s behavioral health facilities to see how their work impacts patients.
Paslick said he doesn’t expect HCA to do anything in direct response to Amazon to help retain talent; in fact, he thinks Amazon will bring more qualified tech workers to Nashville and HCA.
No matter the approach, Washington Federal Bank’s Beardall said Nashville must realize it will be impacted by Amazon — the question is how will businesses take advantage of it.
“Amazon is a game changer. What they have done in Seattle is nothing short of amazing,” Beardall said. “If you want to put your head in the sand, you’ll fail. ... Have a plan, because the world around you is going to change, but what are you going to do to take advantage of the opportunity?”