By John L. Duoba, CCH Staff Writer

This is the first in a two-part series on ways small businesses can compete for prospective employees in the current marketplace. Part I touches on certain economic realities for small business owners and ideas for attracting full-time employees; Part II examines the numerous creative alternatives to just hiring conventional full-time help.

For small business owners, the phrase "Good help is hard to find" is more than just a cliche--it's a way of life. And recent economic indicators are making this fact ring truer than ever.

First of all, newly released unemployment figures are now at a 30-year low in the United States, bottoming out at 4.3 percent. This tight labor market and the trend toward rising wages are a boon to prospective employees, allowing more options in position, salary and terms of employment. But the flip side for employers means greater competition for candidates and higher costs for pay and benefits.

And while large corporations often have the means to compete effectively in this type of environment, many small businesses may not.

On top of that, the annual rate of small business starts is dropping, further echoing the positive job outlook for employees. According to a just-completed survey by Wells Fargo/National Federation of Independent Business, new small business formation in 1997 dropped to 2.9 million starts, down 4 percent from the previous year and 17 percent from 1995.

"The most likely reason for the fall-off in business starts is the nation's strong job market," said Mike James, executive vice president of Wells Fargo's Business Banking Group. "With real wages rising and employment ads filling the newspapers, it's a great time to be an employee."

So with the current employment marketplace clearly favoring employees and larger companies, small business owners need to be more creative in fulfilling their labor needs.

Conventional Full-Time Employees

Obviously, in the competition for qualified candidates, you probably can't outbid all others on salary and benefits. But you may not have to. Sure, money is the strongest inducement for job-seekers, but it surely isn't the only one. And all the money in the world won't make a person happy if all other aspects of a job are unsatisfying.

Consider the flexibility you may have in other aspects of the full-time employment relationship--an option that some larger companies may not have due the confines of the corporate structure. Focus on those elements unique to your business from a prospective employee's point of view. The good news is that many of these perks cost an owner very little in terms of money, which is always in short supply for a smaller company.

• Can you offer the type of hands-on experience that will speed a person's route down a career path, giving workers the opportunity to grow their skills and exert their abilities?
• Can you modify conventional work schedules, allowing flex time, work-at-home and telecommuting to give people greater control over their lives?
• Can you provide a work environment where a person is valued and recognized for their accomplishments and contributions, instead of a nameless, faceless situation where identity is suppressed in favor of corporate motives?

Each of these factors will certainly mean different things to different people. And in the end, they probably won't make up for huge difference in pay. But if you can craft an attractive employment package, outside of just wages and benefits, the playing field may become more level in the competition for employees. (On the other hand, if a candidate's sole deciding factor in a job hunt is money, he or she may not be right person to become a big part of your small business.)

And don't forget, hiring full-timers isn't the only way to get the help you need. Part II of this series looks at various sources of employment help you may not have considered. Stay tuned.