BizJournals Portfolio

The Bad Job, Good Job Economy

The job picture for U.S. small businesses isn't pretty, but some entrepreneurs are bucking the trend by hiring overseas or helping others find the right skilled people for jobs at home.

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Danny Sullivan is an optimistic entrepreneur, but then again, he's not hiring Americans.

The upbeat attitude of Sullivan, who runs a technical outplacement firm based in Pittsburgh, seems to run counter to the prevailing conventional wisdom these days. Just look at the latest findings from the National Federation of Independent Business.

“With fewer increases in new hires and more reports of shrinkage in workforces, we can expect the April job numbers to be a disappointment,” NFIB Chief Economist William Dunkelberg said today in a preview of a jobs report it will release on Tuesday.

The NFIB finds that little has changed in terms of future employment growth, as only 16 percent of small businesses plan to increase their workforce while 6 percent plan to cut jobs. That leads to a seasonally adjusted net of 2 percent of business owners who expect to create new jobs over the new quarter, Dunkelberg said.

On Friday, the U.S. Bureau of Labor Statistics releases unemployment figures for April, but economists aren't predicting much good news. And today, a Morningstar commentary suggested that many workers will stay unemployed for a long time, because the economy has lost the need for their skills. Some manufacturers have closed for good. Construction remains in a deep slump, leaving many workers in the trade on the long-term jobless rolls.

Then there's global competition, and here's where Sullivan gets happy.

In his company, Agents of Value.com, Sullivan is the only U.S. employee. He employs more than 350 workers, many of them software programmers and engineers in the Philippines. His clients are looking to outsource their technical needs to save money and more effectively use the tech tools at their disposal.

Sullivan said business mentors and friends have told him he could boost his company’s revenue beyond $2 million a year by hiring at least some U.S.-based sales people. But the 35-year-old is reluctant to do that, because of the cost of hiring here versus in other parts of the world. Salaries tend to be much higher, and the cost of health care gives pause. “It’s another thing that’s adding to the complexity of hiring people here,” Sullivan said.

Meanwhile, he can pay $500 a month for a software engineer in the Philippines. American engineers from top schools are commanding six-figure salaries as companies like Google and Facebook compete for talent.

To Sullivan, smart people all over the world are a valuable asset for American companies, even if they temporarily slow down the growth of American jobs. “It’s like oil in the ground,” he said of external talent. “How do we access that global workforce? Everybody’s trying to get as much done with as small a budget as possible.”

Like Sullivan, Ron Kaminski is in the business of finding the right candidates for jobs. But unlike Sullivan, Kaminski has a domestic focus as he helps his customers hire new high-skilled workers and boost efforts to hold onto the talent they have. Kaminski, CEO of Corporate Quest, is looking for software engineers and highly-skilled middle managers for his clients, who represent a mix of small entrepreneurial companies to Fortune 500 corporations.

Kaminski's business—with offices in Cleveland and Charlotte, North Carolina—has grown revenue 40 percent in the last year to a little short of $1 million, he said. The portion of Kaminski's business dealing with helping companies choose the best candidates for executive positions has increased about 30 percent.

“If you’re a talented person … you can write your own ticket in this market,” he said.

But if you don't have the right talents, you could just get left behind.


Kent Bernhard Jr. is News Editor of Portfolio.com

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