"The demand for innovation is not going away, particularly in a knowledge economy," Jim Reese, chief executive officer of Randstad North America, a $6 billion provider of professional employment services, observed recently. "Innovation will fuel an ever-increasing demand for workers with the right skills to make innovation pay off."

With the leading edge of the baby-boom generation-76 million strong-inching closer to retirement age, the U.S. Department of Labor projects there will be 10 million more jobs than workers to fill them by the end of the current decade.

By 2030, that shortfall could grow to 35 million, and if current trends continue, it will be exacerbated by a skills shortage, as well. Small businesses may be particularly at risk in this area because they will be competing with larger companies for the same shrinking pool of top workers, and the bigger organizations typically have more to offer in terms of resources for employee recruiting and retention.

The future is important, of course, but most small and medium-size businesses are at least as concerned with meeting the challenges they face today. Finding and hiring the best employees, keeping them motivated and productive, and making sure they stay with the company are objectives most businesses need to meet right now.

Long-term trends point to a sellers market for employees, especially for top performers.

"Our employees-their experience, creativity and innovation-are the engine that drives our business forward," says Susan Gramatges, chief operating officer at Pierpont Communications, a fast-growing public relations agency based in Houston, TX. "We don't sell a product; we sell our people and their time, which are critically important to our marketing position."

An important part of Pierpont's growth strategy has been to hire top talent, so it is meticulous about the process, Gramatges adds, noting that the fit has to be 'magical' on both sides for it to work.

Here are some tips culled from a variety of expert sources that entrepreneurs and small business owners can use to inject a little magic into their own human resource endeavors.

LOOK INWARD

1. Tap existing resources to find valuable new employees by making your current workers recruiters.

A&E - The Graphics Complex is a commercial printing firm that has won several awards over the past few years singling it out as one of the best places to work, both in its local community and within its industry. As its reputation has grown, the company has found that more and more candidates seek it out, but one of its most productive sources is an employee referral program.

"We look for those employees who stand out, going above and beyond and providing exceptional customer service in any given situation," says Pat Gremillion, vice president of sales and marketing at the family-owned business.

To find them, A&E taps many sources in a recruitment effort that Gremillion says is "constantly ongoing, even on our days off." It often promotes from within, it reviews resumes from online services, and it maintains a strong relationship with a recruiting agency.

A&E also offers employees a referral bonus if the company successfully hires and retains a candidate they recommend. That incentive, coupled with the natural desire of people to let others know about the good thing they have found in employment at A&E, has resulted in important contributions to the company's 230-person workforce.

2. "Grow your own" with an internship program.

Pierpont has been successful recruiting from the local chapters of its industry organizations, the Public Relations Society of America and the International Association of Business Communicators. "We also have a strong internship program," Gramatges says. "Several of our entry-level employees were former interns."

oNE OF THE MOST PRODUCTIVE SOURCES FOR ONE COMPANY IS ITS EMPLOYEE REFERRAL PROGRAM.

3. Know what you're looking for, and be sure you're getting what you expected.

Topping the list of what employers must do to make sure they get the right person for the job is determining that candidates have the skills and experience the position demands, says Sue Burnett, founder and president of Burnett Staffing Services.

"It is very important to check the references of all candidates. Make sure they are what they say they are and have the skills they claim to have," she advises. While that advise might seem self-evident to some, Burnett says it is too often overlooked.

Pierpont is one small business that takes Burnett's suggestion to heart. Once it has identified a potential candidate who has the specific skills it is looking for, several members of the management team meet with him or her.

"We try to determine if the right chemistry is present and if we get the feeling that this individual would complement our existing staff," Gramatges says. The company looks for assertiveness and strong verbal and written communication skills, and it places great value on prior public relations agency experience. The same principles can be applied by any business, no matter what the industry in which it competes.

COMPENSATION MATTERS

4. Money still talks louder than anything else.

Mark Candela, director of business development at Enterlogix Corp., a business software consulting firm, is blunt when asked about the best way to attract desirable candidates and keep them happy: "You pay them more money."

In fact, all of the 22 employees at Enterlogix, designated one of the best places to work in the city of Houston for two years running, are well paid. "Actually, we're overpaid for the market," Candela admits. "You go to work for one primary reason, and that is to make money, so you have to keep your salaries above what the competitive marketplace is offering."

Team spirit and other soft benefits are great, but the money comes before anything else. "People are going to think about feeding their families first," Candela states. "Money talks, and we all still listen."

5. When the money's done talking, sell the candidate on the company.

Pierpont was recognized as one of Houston's best workplaces by the Houston Business Journal in 2003, and the same qualities that helped it win that award help attract the best candidates.

It's important to check references and make sure candidates have the skills they claim.

Over the past 17 years, Pierpont founder and chief executive officer Phil Morabito has nurtured a culture that is entrepreneurial in spirit, one that encourages employees to be self-starters and take ownership of their actions and responsibilities and that rewards them for doing so.

Gramatges says that spirit is encapsulated in the Pierpont PATH:

When Enterlogix sets its sights on winning a particular candidate, it makes a concerted effort to give that candidate an insider's look at the company culture and the people behind it.

"We're small enough to be able to do that," Candela relates. "A group of five or six of us will take them out to lunch or for drinks after work. It's a casual environment that gives them an opportunity to get a candid view of the company from the people who will be their coworkers."

That's an excellent strategy, Burnett agrees, with the one caveat that steps be taken to insure the group consists of employees likely to present a positive view of the company.

Money is still the primary motivator for most employees, and it can't be overlooked.

6. Don't forget about the spouse.

Especially in cases where the job to be filled is a professional position, it's a good idea to involve the candidate's spouse in some way, Burnett suggests. "Take the spouse out to dinner or lunch, tell him or her all the good things about your company, make them feel important and that their opinion counts," she says.

In a situation where an attractive candidate is weighing multiple offers that are comparable in areas such as salary and benefits, the spouse's opinion can be the deciding factor in swinging the decision.

7. Once you get them hooked, reel them all the way in.

Make new employees feel welcome right from the start, and reinforce that feeling regularly. Simple things such as a homemade "welcome to the department" sign, introductions to coworkers and managers and making sure new hires will have someone to eat lunch with the first day can be effective in smoothing the transition jitters for new employees at any level.

Some companies assign experienced employees to function as mentors to new hires during the transition period. That can range from a few days to a month or more, depending on the complexity of the job involved and the work environment.

Higher up the food chain, the mentoring technique is even more common. "We usually hire fairly experienced people, and we throw them in the fire and expect them to produce pretty quickly," Candela says. "But we also mentor them."

"We have some of the industry's most senior and experienced people working here, and we make sure new employees feel comfortable going to those senior people and asking them questions," he explains. "We have open and candid discussions with them, and we want them to understand there are plenty of resources here they can turn to."

8. Let employees know that you value them and have a stake in their success.

A&E focuses on giving employees everything they need to be successful, by publicly recognizing employees' talent and hard work and by demonstrating that the company cares about its employees in concrete ways such as free medical and dental insurance."A&E can only be as successful as our employees," Gremillion says.

"Therefore, we try to give new hires, as well as existing employees, the resources they need to do their jobs and be successful. This includes proper training, equipment and guidelines. It's a major factor in our success."

Companies that demonstrate genuine concern for employees have a hiring advantage.

LISTEN CAREFULLY

9. Keep channels of communication open, and use them often.

Employees who rate their employers as excellent communicators have higher morale, are more loyal and have more faith in their top management than employees with lower opinions of their employers' communications skills.

That's one of the more interesting findings of Randstad North America's 2003 Employee Review. Just as interesting is the fact that employees who rate their employers as excellent communicators are also more likely to say they are more productive than usual, even when the economy is faltering.