Gray is Good

A good human-resources manager can also help fix problems like high employee turnover. In today's supertight labor market, where frequent job hopping no longer raises an eyebrow and stock options are passed around like punch, it's tough holding on to new hires, says Lorie Nevares, founder of StateScape, an online legislative and regulatory information service. Most people who come to work for StateScape are in their 20s. For them, Nevares says, "the job market is like Candyland." She adds, "They find out they can get big money somewhere else, and if a chance comes to jump, they're gone."

Nevares hired a human-resources manager when her staff had grown to 15, and she finds the position is essential to making sure everything possible is being done to keep employees happy. "My HR person is great, and the young workers really relate to her, like a housemother," Nevares says. "It's a big relief to me."

A competent HR person can also help establish some basic personnel policies and practices that are important but often missing at a dotcom, Bernard says. Everyone should have a clear job description, for example, and undergo routine evaluation so that there's no confusion (or surprise pink slips) and the company can make sure it's got all legal bases covered. Rewards should be doled out fairly. Handing out raises or shares "willy-nilly," Bernard says, creates resentment among the staff.

Does all this mean that the dotcom world is fated to dissolve back into the conventional business world, just dressed in chinos? Don't bet on it. But the new dogs will have to learn some old tricks, and some of the old dogs are just the ones to teach them.

--Reported by William Dowell and Valerie Marchant/New York, Anne Moffett/Washington and Helen Pitt/San Francisco