This month marks four years since the financial markets melted down triggering recessions in many countries around the world. While most economies of most countries have long since started growing again, Bermuda is still in decline and job losses continue to mount. So naturally people want to know what it will take for employers to begin hiring again.Obviously there are a number of factors that influence an employer’s decision to create jobs. But none is more fundamental than confidence in the future.When people have confidence in the future, investors invest, entrepreneurs take risks and job creation results.Conversely, when people lack confidence in the future, investors and employers tend to hunker down and remain in a conservative mode until the economic outlook improves.So the all important question is how can confidence in the future be stimulated?My advice to leaders is that they play a key role in inspiring confidence. The recipe for confidence is not a precise one but ingredients always include a compelling vision for the future and a plan to make the vision a reality.As a leader of my organisation, in the later part of 2008, we communicated a new vision for the company based on what we anticipated would be a long period of declining revenues. Our strategy was to immediately begin reducing our cost base so that we could better respond to downward pressure on the fees. We also planned to leverage our lower cost base to reduce fees for payroll and accounting services because we knew that there would be more demand at a lower price point.Four years ago we told our employees that we anticipated being “smaller but better”. Smaller as a result of not replacing employees that resigned. Better because we planned to cut out wasteful spending and maximise employee productivity. “Cutting people cost without cutting people” became our credo.What was the result? At first it was difficult to sell employees on the “smaller but better” vision because we had experienced 10 years of year-on-year growth. But today the vision we led our employees to see in 2008/09 has become a reality.Without resorting to redundancies we have downsized from 56 employees to 40. Our cost base is lower. It’s true that profit margins have been squeezed extremely hard across all business lines but our payroll and accounting business has grown. So we have laid the foundation for potential future profitability. We just need the Bermuda economy to begin growing again.But when will that be? This question depends on a number of factors but the Bermuda Government plays a key role. Our political leaders must inspire confidence in the future.Unfortunately many in the business community are very concerned about some of the decisions made by our political leaders. For example, there is no doubt that the Government’s decision to increase the payroll tax in 2010 severely shook the confidence of employers.Insurance industry CEOs Mike McGavick, David Cash and Charles Duplin recently articulated well the sentiment from the business community. More than just undermining confidence, that payroll tax decision caused a “rupture of trust” (McGavick) at a time when employers were on a “cliff edge” (Duplin). Bermudian CEO David Cash called the 2010 payroll tax hike “shortsighted” and concluded that “the benefits were vastly outweighed by the negatives”.Just as the government did not anticipate that a loss of confidence would result from raising the payroll tax in 2010, I suspect that our political leaders are not fully conscious of the deep level of concern today about the level of government debt which began to rise sharply in 2005.The national debt undermines confidence in the future because the debt represents future taxes to be paid. Knowing that businesses will inevitably bear a lot of the future tax burden, many employers are cautious about creating jobs. They wish for a firm commitment by government to stop spending more than it earns.No matter which set of political leaders we have after the next general election, our government will have to rapidly figure out how to live within its means. Both major political parties have committed not to make any civil servants redundant so the strategy will have to be to “cut people costs without cutting people”. To see significant progress in that direction would go a long way to boosting the confidence of employers.Doug Soares is a partner of Expertise, Bermuda’s largest management consulting and outsourcing company. He may be contacted at doug@expertise.bm or via www.expertise.bm