According to Dwight Gertz, principal with Mercer Management Consulting of Boston, Massachusetts, co-author of a new study on the subject of downsizing, recent statistics demonstrate that downsizing and cost-cutting do not pay in the long run. Gertz's study finds that in the period between 1988 and 1993, those companies that expanded and grew increased their overall market value by an average of 19%. That is almost 50% higher than cost-cutting companies, which saw a 12% increase in market value. "The message is clear," the report concludes, "you can't shrink to greatness. You have to grow."

The good news is that the small business sector, which is where most of us in California work, has been growing in the past decade. That means that for many managers, the challenge lies in consistently hiring the right people. The first time around.

New Challenges

Finding qualified candidates is harder today because more companies are competing for the same skill sets. The "average" job requires more abilities—to follow written instructions, use computers, work in teams, and analyze data. This is certainly true in the high-tech arena.

One-size-fits-all hiring does not work anymore. Making good matches requires more flexibility than in the past, and common assumptions must be relinquished. Managers can no longer decide to hire only those who:

• are similar to me
• do not need training
• will easily and effortlessly fit in
• want a career with us

These beliefs can blind managers, and therefore cause them to overlook other candidates, many of whom may be better suited to the work environment of the future.

Develop a Retention Program

Good employees are the cornerstone of any business. Managers must provide regular review and performance discussions, set up promotion paths and make sure people understand what they need to move up the ladder. Create structures to help staff. Mentoring programs, special assignments, and paying for professional memberships are ways to help people thrive.

Hire Laid Off Employees

During upswings, hiring past employees (assuming that their performance was acceptable) is a good thing to do. They know and understand the company, will take less training time to get up and running, and probably already know some of your existing staff. This is a good morale booster for all concerned.

Provide Training

Training for all employees is important, never more so than now. Whether that training is basic skills, English as a second language, or technical and job specific, continual learning is a motivating and unifying force. Many bright and very capable job applicants may not have all of the knowledge or skills you need, but are eager to learn.

Hold Jobs Open Longer

Owners and managers must assume full responsibility for integrating the work force. If you are looking to choose from a diverse applicant pool, holding the job open longer and finding nontraditional ways to get the word out is necessary. There is a large body of excellent candidates from: older individuals, women, the disabled, immigrants and people of color.

Alternatives to Full-time Employees

Consider using part-time, temporary or contract workers before making the leap to creating a permanent staff position. Many highly skilled individuals work part-time for more than one employer or have their own business that they pursue part-time. Take advantage of their availability while simultaneously holding down costs. Keep in mind that contracted work no longer needs to be low-level, low-skill. Presidents, Chief Operating Officers, engineers, and technicians are now common in many industries.

Successful managers in thriving companies are opening the doors to a wider group of workers, and with thought, openness and planning are reaping the rewards.