Strategies for Addressing the 2024 Labor Shortage in Tennessee and Encouraging Economic Growth

2024 labor shortage solutions in Tennessee, EB-3 Visa green card jobs, Tennessee labor shortage and economic growth

Tennessee must grapple with a significant labor shortage across various industries, which poses business challenges and impacts economic growth. The state’s robust economy, coupled with factors such as an aging workforce, skills mismatches, low workforce participation rates, and the impact of the pandemic, have contributed to this pressing issue.

There are currently 56 available workers for every 100 open jobs. The state has 189,000 job openings and 105,102 unemployed workers.

The labor force participation rate is 59.4%, and the unemployment rate is 3.1%.

The quit rate is 2.9%, and the hiring rate is 4.8%.

Tennessee is currently undergoing demographic changes that are affecting the labor market.

The state is experiencing an aging population and a decreased birth rate, resulting in a diminishing workforce and a growing demand for healthcare services and skilled workers. 

Recognizing these demographic patterns can assist policymakers and businesses in devising strategies to attract and retain talent, particularly in vital sectors such as healthcare and manufacturing.

There are disparities in labor shortages between rural and urban areas.

Rural communities frequently need help attracting and retaining employees due to limited job opportunities, inadequate infrastructure, and lower wages than urban regions.

Tailoring workforce development programs and incentives to meet the specific needs of rural communities can help bridge the gap and ensure more equitable access to job opportunities.

Skills gaps and mismatches between employer-demanded skills and those possessed by job seekers can worsen Tennessee’s labor shortage.

Enhancing coordination between educational institutions and businesses to align curricula with industry requirements, providing training programs in high-demand fields, and promoting lifelong learning can assist individuals in acquiring the skills necessary to fill available positions effectively.

The emergence of the gig economy and alternative work arrangements has also impacted the labor market in Tennessee.

Many workers choose freelance, part-time, or gig work over traditional employment, posing challenges for businesses seeking to fill full-time positions.

Understanding the preferences and motivations of these workers and adjusting recruitment and retention strategies to accommodate the evolving nature of work can help businesses navigate the changing labor market landscape.

Three top industries that are gravely affected by the labor shortage include:

1. Healthcare

The healthcare industry in Tennessee is facing a severe shortage of healthcare professionals, including nurses, physicians, and allied health workers.

The Tennessee Hospital Association (THA) forecasts a deficit of more than 15,000 healthcare workers in the state by 2035, with the largest shortage anticipated in registered nursing.

Simone Stewart, M.Ed., CCSP, GCDF-I, provider workforce development director with Wellpoint (previously Amerigroup) Tennessee, highlighted burnout as a significant contributing factor to the ongoing scarcity.

The aging population, increased demand for healthcare services, and the industry’s high turnover rate have exacerbated the shortage of qualified healthcare workers.

2. Manufacturing

The manufacturing sector in Tennessee is also experiencing a significant labor shortage, particularly in skilled trades such as machinists, welders, and technicians.

The Manufacturing Institute (MI) study suggests that by 2030, manufacturers will face the challenge of filling an additional four million jobs, with an estimated 2.1 million of these positions potentially going unfilled.

The retirement of older workers, a lack of interest among younger generations in pursuing careers in manufacturing, and a skills gap are contributing factors to the shortage in this industry.

3. Hospitality and Tourism

Tennessee’s hospitality and tourism industry, which includes hotels, restaurants, entertainment venues, and attractions, needs help filling positions ranging from entry-level to management.

The industry has added 200,000 jobs, bringing total employment to 15.7 million by 2024.

Forty percent (45%) of companies require additional staff to fulfill customer needs.

The seasonal nature of tourism, competition for workers from other industries, and challenges in attracting and retaining talent have all contributed to the labor shortage in this sector.

Here are some strategies to address the labor shortage in Tennessee:

1. Workforce Development Programs

The Tennessee Higher Education Commission (THEC) reported a significant increase in the state’s college enrollment rate at the beginning of July.

The class of 2023 saw a 2.4 percentage point rise compared to the class of 2022, reaching a college-going rate of 56.7%.

Implementing workforce development programs that focus on upskilling and reskilling workers to meet the demands of high-growth industries can help address the labor shortage in Tennessee.

Collaborating with educational institutions, industry partners, and government agencies to design training programs tailored to specific industry needs can provide individuals with the necessary skills and qualifications for available job opportunities.

These programs can include apprenticeships, vocational training, online courses, and certification programs to enhance the employability of workers.

2. Incentives for Workforce Participation

Offering incentives to encourage workforce participation can help attract individuals back into the labor market and reduce the impact of the shortage.

The minimum wage in Tennessee is $7.25, which aligns with the federal minimum wage.

The last increase in Tennessee’s minimum wage was in 2009, bringing the mandated hourly pay to the current $7.25

Local governments in Tennessee also follow the same minimum wage rate set by the state.

Employers must provide financial incentives, such as signing bonuses, relocation assistance, tuition reimbursement, and retention bonuses, to encourage workers to join and remain in the workforce.

Offering flexible work arrangements, childcare support, and wellness programs can help create a more inclusive and supportive work environment that appeals to a broader range of individuals.

3. Promoting Diversity and Inclusion

Promoting diversity and inclusion in the workforce can help expand the talent pool and address Tennessee’s labor shortage.

Spanish is Tennessee’s most widely spoken non-English language, accounting for 4.16% of the population.

Over the last decade, there has been a significant decrease of 56 percentage points in the combined population of the two largest racial groups, white alone and Black or African American alone.

White citizens still comprise most of the state’s population, totaling over 5 million.

White citizens represent 72.2% of Tennessee’s population, down from 77.6% in 2010.

In Davidson County, white non-Hispanic individuals now account for 56% of the population, a decrease from 61.4% in 2010.

Implementing diversity initiatives, creating inclusive recruitment practices, and fostering a culture of belonging can attract individuals from underrepresented groups and provide opportunities for talented individuals who may have been overlooked.

By building a diverse workforce, businesses can benefit from a broader range of perspectives, ideas, and skills that can drive innovation and success.

4. Public-Private Partnerships

The winter 2024 Tennessee Business Leaders Survey, conducted by the Boyd Center for Business and Economic Research at the University of Tennessee, Knoxville, found that Tennessee business leaders focus more on filling job openings than on concerns about recession or inflation.

According to the survey, 50% of state business leaders expressed confidence that there won’t be a recession in the coming year, marking a shift from last year when four out of five respondents viewed the likelihood of a recession at 25% or higher.

While employers stated that they are still experiencing the effects of inflation, the impact is less significant than it was a year ago.

Most survey participants feel that Tennessee’s economy is as strong as or even stronger than the overall U.S. economy.

They attributed this strength primarily to business investment (47%) and state government leadership (26%).

Establishing public-private partnerships between government agencies, businesses, educational institutions, and community organizations can create collaborative solutions to tackle the labor shortage.2024 labor shortage solutions in Tennessee, EB-3 Visa green card jobs, Tennessee labor shortage and economic growth

By working together, stakeholders can leverage their resources, expertise, and networks to effectively develop and implement initiatives that address workforce challenges.

These partnerships can involve funding support for training programs, sharing best practices, coordinating job placement efforts, and advocating for policies that support workforce development and retention.2024 labor shortage solutions in Tennessee, EB-3 Visa green card jobs, Tennessee labor shortage and economic growth

5. Employ workers from overseas

The EB-3 visa is an employment-based immigrant visa category that allows skilled and unskilled workers to relocate to the United States for permanent residency.

Employers from Tennessee can utilize the EB-3 visa program to enlist foreign workers to fill vital roles in industries facing a shortage of unskilled labor.

This initiative can assist in addressing immediate workforce requirements, bolster the domestic labor pool, and facilitate the prompt and effective completion of construction ventures.

2024 labor shortage solutions in Tennessee, EB-3 Visa green card jobs, Tennessee labor shortage and economic growth


Tennessee faces significant labor shortages across various industries, impacting economic growth and business operations.

Industries such as healthcare and manufacturing face specific challenges, with acute shortages of skilled professionals.

Employers in sectors like manufacturing, healthcare, hospitality, and technology need help to fill open positions, leading to increased competition for skilled workers and potential disruptions in service delivery.2024 labor shortage solutions in Tennessee, EB-3 Visa green card jobs, Tennessee labor shortage and economic growth

Investing in education and training programs to upskill workers, especially in high-demand industries, can help bridge the skills gap and boost employment opportunities.

Promoting diversity and inclusion in the workforce can expand the talent pool and foster innovation.

Embracing remote work options and flexible scheduling arrangements can also appeal to a broader pool of potential employees, including those with caregiving responsibilities or individuals seeking a better work-life balance.

Addressing burnout and turnover rates in sectors like healthcare through targeted interventions is crucial for long-term sustainability.

If the above strategies are implemented, Tennessee can strengthen its economy, support businesses, and ensure sustainable growth for the future while addressing the specific challenges faced by different industries and communities within the state.


 Lindsay Cates and Stephanie Ferguson. US Chamber of Commerce. “Understanding America’s Labor Shortage: The Most Impacted States”.

2 Maddie McCarthy. State of Reform. “Tennessee healthcare stakeholders combat workforce shortage with education and community health workers, but pay remains an issue”.

3 Manufacturing Institute. “Creating Pathways for Tomorrow’s Workforce Today: Beyond Reskilling in Manufacturing”.

4 National Restaurant Association. “2024 State of the Restaurant Industry ”.

5 Tennessee Higher Education Commission. “Tennessee Higher Education Commission Announces Big Momentum Year Increase in College-Going Rate for the Class of 2023”.

6 Colleen Egan. “Understanding the Tennessee Minimum Wage in 2024”. 2024 labor shortage solutions in Tennessee, EB-3 Visa green card jobs, Tennessee labor shortage and economic growth

7 Steve Goldstein. LLC Buddy. “Tennessee Diversity Statistics”.

8 UTK News. “Business Leaders Praise Business-Friendly Tennessee but Share Concerns About Filling Jobs”.

9 EB3 Work.

10 USCIS. “Employment-Based Immigration: Third Preference EB-3”.

2024 labor shortage solutions in Tennessee, EB-3 Visa green card jobs, Tennessee labor shortage and economic growth