Labor pains

Entrepreneur, April, 1998 by Mark Henricks

Importing workers may help. Despite the low nationwide unemployment rate, there are pockets of available workers, notes Fioretti. For instance, he says businesses in thriving northern Kentucky are finding willing workers in the state's depressed coal mining areas.

Entrepreneurs near large metropolises may be able to tap the inner-city unemployed. "Unemployment rates in inner cities are still high," notes Barbato. Some Rochester, New York, employers have purchased vans to transport workers from inner dries to suburban work sites, he says.

Some entrepreneurs search internationally. Pritchard, for example, has recruited machinists from Taiwan and China. The visa requirements and red tape involved may not make it worth your while, however: Pritchard's Taiwanese worker may have to leave the United States soon unless he gets a visa extension, and his Shanghai mold maker is still overseas, his immigration plans tangled in red tape.

"With the paperwork mess and the cost of lawyers, I'm not sure about this deal," Pritchard says of international recruiting. And although he's finding willing workers now, that may not last long as overseas economies mature. For example, The New York Times reported in January that India, once an employee resource for U.S. firms seeking computer talent, now has more jobs than its 55,000 annual graduates in the field can fill.

The problem with hiring less qualified or foreign workers is that entrepreneurs will have to do the training, taking time from other management tasks. "We've got production to get out," says Gustafson. "And I don't have a layered organization with a 10-week training program."

LEASE IS MORE

Leasing employees is another option, one that lets small companies avoid many of the hassles involved in recruiting and hiring workers. That's one reason professional employee organizations, as leasing companies call themselves, are growing at a rate of close to 30 percent a year. But during times like these, it's the benefits packages leasing companies can offer that are the real appeal.

Leasing companies pool large numbers of employees so they can provide even small firms with workers who have benefits such as medical and dental insurance. "It's a way small businesses can compete for employees more effectively with large corporations," Fioretti says.

But it's not just a matter of benefits. The leasing company that provides some of Ferris' employees stays abreast of legal issues and standard practices far better than he can. "If I have a question about vacation policy, they tell me what the industry standard is and how we should respond," Ferris says. "You have a human resources professional that can give advice on how to keep people happy."

Surprising numbers of leased and temporary employees wind up permanently employed at their new workplaces. Manpower says 40 percent of its temporary workers take permanent jobs with its clients. Temporary-to-permanent arrangements reduce turnover, says Bingham, because employers and employees can see how well they get along.