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Small business in Las Vegas find it isn't easy filling out their staffs

Jack Zunino would really like to hire some new workers.

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Also hampering Zunino's recruitment efforts are bigger companies with more resources to spare. He said he's lost people to major corporations that can pay $1 an hour more than Zunino & Associates can afford.

The latest Small Business Scorecard report from SurePayroll, an Illinois payroll contractor, shows what Zunino already knows: 2005 was not a vintage year for job growth among companies with 100 or fewer employees.

SurePayroll interviewed 15,000 small businesses nationwide on their hiring patterns in 2005. Nevada's small businesses contracted slightly; their average number of employees fell 0.8 percent, from 4.68 workers in January to 4.64 employees in December. The average wage among small businesses in the Silver State dropped 1.9 percent last year, from $25,873 in January to $25,394 in December

That performance fell below national results. Small companies nationwide posted a 0.3 percent increase in small-business hiring from January to December, while the average small-business salary fell 0.5 percent.

The figures run counter to overall economic growth. The nation's gross domestic product grew at an annualized rate of 3.8 percent in the first three quarters of 2005, and job growth in Nevada is averaging more than 6 percent a year.

For small companies, though, competing for workers in a thriving economy is tough. Their larger counterparts can leverage bigger business volumes to create economies of scale and help lower the costs of health insurance and capital, said Michael Alter, president of SurePayroll. Big companies can also invest in technology and improve productivity more quickly ,than small companies, Alter said. Big businesses can also retain lobbyists to promote laws that give them advantages over smaller competitors.

Those advantages mean big companies can boost compensation to land the best workers.

Douglas Jones, regional director of Marathon Staffing Group in Las Vegas, focuses on placing workers with small- to mid-size businesses. Jones said prospective employees often believe big companies have better benefits and more career and networking opportunities than small companies. Last spring, as the national and local economies surged, recruiters at his staffing agency noticed a "dramatic change in the ability to deliver quality employees to smaller companies," Jones said. Small-business job orders that Marathon could fill overnight a year ago now take up to two weeks to fill, he said.

Especially tough to fill are positions that force small companies to compete with bigger businesses, Jones said. Clerical and administrative jobs often go unfilled, as do posts in smaller factories, warehouses and distribution centers.

"We've had to educate clients on how much things have changed," Jones said. "The food-service and casino industries compete for the same employees that normally are easy to place with small businesses elsewhere. A factory worker in Las Vegas can earn more as a dishwasher in a casino, and the work is no harder, so hospitality drains employees who might be good for small businesses. I have clients who say, 'In other states, we have no problem filling these jobs.' I tell them, 'In this state, that employee is pulled away by a dish-washing job for $9 or $11 an hour.' "

Douglas Hitt, president of Event Management Solutions in Las Vegas, said his company has experienced that worker drain firsthand.

Event Management Solutions had two full-time employees in early 2005. When Hitt decided in the fall to add workers, he spent three months trying to fill two jobs that would have taken a mere 10 days to fill a year ago. In the waning days of December, Hitt found his workers and managed to increase his staff from two to four full-timers.

"We have a very difficult time finding talented people who understand the hospitality and event business," Hitt said. "A lot of people who transplant here don't have that type of experience, so we find ourselves having to train people."

Like many other small businesses, Event Management Solutions isn't drawing workers by raising its salaries, which range from $30,000 for clerical jobs to $75,000 or more for salespeople. And health insurance is too expensive for the company to provide, Hitt said.

So Hitt, who spent the first business day of 2006 on the phone looking for prospects to fill four full-time positions he'd like to add in the first quarter, said he knows expansion won't be easy.

"We have all the business we need. We simply need to find (workers) who understand the event business," Hitt said. "We're looking through trade publications and going to events to meet people who seem to be qualified. If they're not happy, we'll try to offer them a better way of life."

At Zunino & Associates, the philosophy is similar.

Jack Zunino, who gave up his employee search just before the holidays, will resume his hiring activities later this month. He said he'll compete with big business by emphasizing his company's "good work environment" and benefits, which include profit-sharing, dental and health insurance and long-term opportunity.

"We might not pay as much as someone else, but there are companies that hire people for a big project and fire people when the project is done. That's not our policy," Zunino said. "We advocate company pride and longevity. We're definitely looking for people who want to make a commitment to our company, and who want to have pride in where they work and what they do. We want to keep a happy, healthy environment."

Copyright © 2006. Las Vegas Review Journal.