November 5, 2013

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Industry Outlook: Technology Entrepreneurs

November 5, 2013

But we’re experiencing similar challenges on the manufacturing side. We make 100 percent of our wheels in Ogden. We’re one of the only bicycle firms to make anything in the United States. And during the recession, we had an ample pool of candidates to pull from. But now it’s getting tighter and tighter.

BHASKAR: The problems for small companies are exacerbated when incentives are given to a company for a thousand employees. The reality is they don’t hire fresh people and train them, they steal from you. And that raises your costs, while they get incentives to lower their costs.

What we really need is a system where we start hiring a freshman, whether it’s from high school or from college. You should be giving them training incentives regardless of whether you applied for it and hired a lobbyist or hired a law firm who has a person on the inside. Those things have to be changed structurally so that if you are hiring a freshman, you are given training incentives. If we do that across the board, you’re more young people will be hired and we’ll also raise the quality of the workforce in the state.

Bhaskar, you’ve been on the governor’s incentives board that grants those incentives. Is there a structural or a legislative problem with using some of those incentives for smaller businesses?

BHASKAR: Right now, basically, let’s say you’re hiring 10, 20 people—you’re not going to hire a lobbyist, fill out a bunch of forms, hire a law firm which has connections. While if you’re a big company, you can do all of that. But the reality is, you’re the one training the young people.

GREEN: That’s right.

BHASKAR: What we need is to legislatively change the structure going forward, go with objectives to train more young people, like South Carolina does. Train more young people, rather than just giving incentives to companies that are already here, but just expanding.

So is there a disconnect between UCAT and GOED’s objectives?

BHASKAR: UCAT is doing its job. But we need to have a lot more. Because for every kid UCAT trains, there are 100 kids that are being trained by people in this room. Right? So we need to focus on the 100 kids that are going to be trained, rather than incentivizing an employer to poach other employees.

Those of us on the board get calls from smaller companies saying, “This big company’s hiring my employees now.” Like the defense contractors, who have unlimited resources thanks to the tax payers, they will hire people at $23, $24 or $18, while you can’t afford to hire people at $18 and $24. You are hiring them at $12 to $13, but you are training them. That’s a huge training cost. We need to reverse that process legislatively if we want to have more small companies grow faster.

What are the key resources that you get out of Utah and what do you wish you had?

SLOVIK: There’s a shortage of software engineers. We all know that. What I’ve successfully done for years is hire people who studied math or chemistry or physics and decided they don’t want to be a physicist. I’m willing to teach them how to program. The best programmer I’ve ever worked with was a physics major out of Caltech who decided he didn’t want to be a physicist anymore.

What I find hard is making contact with places like the U, to their math department or to their science department. There’s no central place that I can find to go and post, “If you have any of these kinds of degrees, I’d love to talk to you.” Maybe there is. I just can’t find it. Or if you happen to know that professor, you can get in. It’s just very hard.

GREEN: We’ve had the same problem approaching the U up here. It is a challenge. You don’t know where to look. And there is no central location. You need to know who to talk to if you’re approaching the U for employees.  

PETERSON: It seems like the universities are catering toward the Fortune 500 for recruiting and not the small businesses. So I’ve done that same thing. I’ve gone out and tried to find that workforce, trying to feed some employees in just as an internship. And it’s not there for the small businesses, 120 employees or below. If you’re large, then they’ll cater to you very well and create that avenue. But it’s almost like, well, you’re only going to get four or five employees, so we’re not really interested in talking to you.

I think that’s common throughout Weber State, UVU, Utah, BYU. They’re all in that same boat. So to have an advocacy around promotion of small business—because if you add up all the employment done by small businesses, it’s going to add up to those large businesses. So there needs to be an avenue there.

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