Some small business owners say they're hiring but they can't find employees, despite millions being unemployed.

The improving economy is hurting us

Owner: David Greenberg
Company: Parliament Tutors, LLC
Location: New York City
Annual revenue: projected to be $600,000 this year

We used to place a Craigslist's ad for tutors, and our inbox would be flooded with applicants. Everyone was just trying to stay alive until the economy improved. Now it's harder to recruit.

It's a reflection of the improving market that people are looking for more stable full-time employment options. We have four full-time employees, and 500 tutors who are contractors. We want to hire more. Many of our tutors come straight out of college.

We start them out at $25 to $50 an hour based on location, travel time and complexity. We can't pay more, because we do not want to charge our clients more. Our price point makes us competitive. But as demand increases, freelance tutors feel empowered and strike out on their own.

If a client in an obscure location buys one of our specials, and we can't deliver a tutor to that area, we have to give a refund. If we can't fill the need for qualified tutors everywhere, we can't expand.

I think this hiring problem will continue to be an obstacle we need to overcome, but we will. In my mind, challenges only fuel growth.

People don't want to work

Owner:

Michael J. Fredrich
Company:MCM Composites, LLC
Location: Manitowoc, Wis.
Annual revenue: $7 million

We're a small business manufacturing custom thermoset composite moldings. We run our factory 24 hours a day, four days a week and sometimes on Friday.

Lately, we have had to lock our front office doors. People receiving unemployment benefits are required to show that they have put some effort into finding work. Some show up at our offices to fulfill this requirement -- usually on a Friday. So we lock our doors to avoid them. We've resorted to only hiring people who have worked 90 days for a temporary staffing agency.

We have about 60 employees and are looking to hire four more. The jobs are entry-level press operator jobs. They are not difficult. The presses run on automatic, but someone needs to inspect and clean the parts when they are produced by the machine.

And we offer a competitive wage: $8.50 to $9.50 an hour. The $8.50 is just the starting wage. After 90 days we increase it to $9.50 to $10 an hour.

But many people add up their constantly renewed unemployment, food stamps and housing assistance and realize that they can make as much not working, as working.

We could raise wages to $100 an hour, fill the positions and then go out of business, taking all our jobs with us.

Not being able to remain fully staffed means we may not meet our performance delivery standards all of the time. That makes us less competitive. We are creating a permanently dependent class of people in the country who won't ever want to work again. Harsh talk, but that's our experience.

People prefer unemployment

Owner:

Dema Barakat
Company:Velocity Merchant Services
Location: Downers Grove, Ill.
Annual revenue: $5 million

Velocity Merchant Services is a credit-card processing company. We have 72 employees and are looking to hire 45 to 50 salespeople.

But we are finding people don't even show up for the interview. Or people come for the training, but don't stay for the job.

We hosted a job fair where we hired 40 people. Twenty-five showed up for training. Only two lasted more than a couple of weeks. People work for three months and get themselves fired so they can collect unemployment for another year.

We have learned to document everything we do with an employee. We've become sticklers for regulation. Finally, we hired an inside recruiter and created surveys designed to discover who is truly serious about working.

We've raised wages from $12 per hour to between $15 and $18 per hour plus commission, meaning a salesperson starts between $24,000 and $38,000. An employee can make up to $80,000. We've found people do work harder for more money. But their training, which used to take 30 days, now requires 90 in order to prepare them to make the higher numbers. Training costs money.

We bought a 30,000-square-foot building planning to triple the size of the business. But we can't find the employees, meaning our already low profit margins are flat. We should have revenues of $10 million to $15 million, but the numbers aren't there. As a business owner, I need to be optimistic, but we have problems to overcome.

Many fail our background checks

Owner:

Jim Angleton
Company:AEGIS FinServe Corp.
Location: Miami
Annual revenue: $1.9 million

Aegis provides U.S. government agencies with financial services, such as payroll. We are experiencing difficulty hiring qualified people who have Department of Defense secret clearance and financial expertise.

Since the Patriot Act was passed, the time frame to get a clearance went from 90 days to nine months. While we conduct in-house due diligence, the 32-page trust application is forwarded to government agencies, such as the FBI, NSA, etc., and costs the firm upwards of $25,000 per candidate.

If a criminal record, psychological issue, poor credit or other problem, comes up, a candidate could be disqualified. Aegis then eats the due diligence costs.

Without proper staffing, we work longer hours, nights and weekends included. We have to if we don't want to lose business. Aegis has six employees and wants to hire five more. By adding qualified representatives, we project tripling our revenues.

As the wars in Iraq and Afghanistan conclude, we are more optimistic about getting qualified people. Former military applicants have held or can get security clearances. We find they make excellent representatives for our company. Having been in harm's way, they are very disciplined and mature.

People aren't as driven

Owner:

Ari Zoldan
Company:Quantum Networks, LLC
Location: New York City
Annual revenue: $10 million

Long-term near double-digit unemployment rates have bred an air of discouragement in the job market. Even people who interview for our marketing, sales, and business development positions walk in already sure they won't get the job.

Quantum sells cell phone products and services. We have 25 employees and want to hire 10 more.

Many of them have been unemployed for years. After the dot-com bubble in early 2000, it was as if the American people got kicked in the stomach and lost that positive energy. Nobody believed they could obtain "The American Dream."

Elsewhere in the world, workers have a survival mentality. They know they have to give 110% to keep their jobs. In this country, we give public assistance and unemployment. That allows us not to be as driven. I spend 90% of my time interviewing, and half the people who are scheduled never even show up.

We want to hire motivated, dedicated young adults. We start them between $30,000 and $40,000. We tell them if they survive the first year, and are pulling their weight, they can write their own ticket. "The American Dream" is achievable right here. Without such employees, I'm limited and prevented from scaling my business. I'm looking for leaders, and I can't find them.