John Troiano stopped placing want ads about eight months ago.
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After a "fruitless" search for salespeople earlier this year, Troiano, the chief executive officer of payroll service company AccuServe, quit actively looking for workers to add to his staff of seven.

"We like to see people with college degrees and experience in the sales cycle and process," Troiano said. "But it's a dual-edged sword. The ones who are highly educated are going after sales jobs with larger businesses like pharmaceutical companies, and the people who do very well in sales but don't have a college education don't fit our requirement. We're caught between a rock and a hard place. We're stuck hiring someone just out of college without experience, or a seasoned veteran we can't afford to pay."

A study released earlier this week shows AccuServe isn't the only small business facing hiring troubles in Las Vegas.

The SurePayroll Small Business Scorecard, a nationwide survey of more than 15,000 businesses with 100 or fewer workers, reported that the number of employees among small businesses in Nevada dropped 1.4 percent from December 2004 to September 2005, from an average of 4.68 workers to 4.62 workers per company. SurePayroll, which develops the Small Business Scorecard by analyzing salary trends among its national client base, also revealed that the average small-business paycheck in Nevada is down 4.6 percent in the first nine months of the year. Small-business employees in the state now bring home an average of $24,687, down from $25,873 at the end of 2004, SurePayroll said.

Nationally, small-business hiring is up 0.4 percent in the year's first nine months, while the average paycheck is down 2.1 percent. In the West, the number of small-business workers has dropped 0.5 percent so far this year, and the average paycheck has fallen 2.1 percent.

Ken Gaebler, a spokesman for SurePayroll, said small businesses in Nevada enjoyed a strong 2004 and thus were unlikely to maintain such brisk growth into 2005. SurePayroll reported that the average small-business employee count increased from 4.51 to 4.68 in 2004, while the average annual salary rose from $25,035 to $25,873.

"It's tough to sustain any win streak, especially in this economy," Gaebler said. "Some states that had rough years in 2004 are doing really well this year, while states that did well last year are not doing nearly as well this year."

Gaebler said small-business hiring is challenged across the country. Higher fuel costs, slipping consumer confidence and lingering concerns over terrorism and the war in Iraq are making business owners cautious about adding staff, he said.

Plus, the compensation outlook for local workers isn't likely to brighten in coming months, Gaebler said.

"With the influx of prospective employees who have taken refuge in Nevada after escaping from (hurricanes Katrina and Rita), we would expect salaries to stay down for a while," he said. "There will be more workers chasing jobs, and there still isn't enough new job creation to create upward pressure on salaries."

But local businesspeople say the problem isn't the economy, which remains robust in Nevada. Rather, the issue, as Troiano can attest, is the inability to find qualified staff members.

"You have no idea how frustrating it is not being able to find (salespeople)," Troiano said. "We're adding clients. The economy is not slowing, and the Las Vegas market is only getting stronger. There's no trick to doing business at AccuServe other than finding four or five salespeople."

Thomas Stafford, an attorney with the three-employee Law Offices of Thomas Stafford, had difficulty finding his third worker earlier this year. A state-run staffing service sent him three potential legal secretaries; none of them worked out.

"It was a disaster. The people weren't really trained, and this job is so fast-paced that I don't have time to do a lot of training," Stafford said. "The job requires a lot of writing, reading and interpreting statutes. I need someone who can think on their feet."

Stafford finally found a suitable secretary through a referral from a fellow attorney.

Executives of local staffing companies say demographics hurt the state's small employers.

George Dorsey, president of Las Vegas staffing agency Dorsey & Associates, said competition is "fierce" for a relatively small pool of educated workers. Dorsey said Nevada's college-attendance rate hinders hiring. At 24.5 percent, the state is No. 35 in the nation for the proportion of residents older than 25 with a bachelor's degree, according to 2004 data from the U.S. Census Bureau.

"The smaller business is not going to be able to put together a competitive compensation package like one that MGM Mirage or Harrah's Entertainment could offer," Dorsey said. "This is certainly a great economy, but it's hard for small companies to find qualified people for even clerical and administrative positions. A lot of times, companies have to recruit outside the state to get skilled labor."

Compounding the tough hiring times, Dorsey said, is the availability of well-paying jobs for people without college degrees. Recent high school graduates can take home $50,000 a year in some casino jobs, he said.

"Even if you spend four or more years in college, where exactly can you find a job making that kind of money out of school?" Dorsey said. "Small businesses have to compete against that as well."

SurePayroll's bleak look at local small-business conditions seem at odds with a survey in Entrepreneur magazine's October issue. The report declares Las Vegas the fourth-best startup market among the nation's big cities.

Gaebler said other markets across the country are also experiencing dropping demand for the products and services that small businesses provide, leaving Las Vegas in a comparatively strong position for business formation.

Copyright © 2005. Las Vegas Review Journal.