Woozy from big swings in business volume, the home mortgage industry is taking new steps to control its largest cost: people.

Full-time workers with highly specialized skills, long the backbone of the business, are increasingly being replaced by part-timers, temporary employees, or full-time staff members with multiple talents. Once-rigid hours, meanwhile, are giving way to "flex time" programs that better suit both employer and employee.

Mortgage executives are hoping these innovations will let them respond better to the industry's notorious business cycles. Top executives are looking to expand staffs more rapidly during boom times and, perhaps more important, contract swiftly when the market goes bust.

"Mortgage bankers are trying to make payroll a more variable cost," said Kathy Sweeny, president of SRS Group, an employment firm in Walnut Creek, Calif.

It's easy to see why.

As low interest rates ignited a record boom in refinancings, nationwide mortgage employment posted double-digit gains in 1992, 1993, and 1994. Then with higher rates curbing loan demand, employment fell 11% last year. In commercial banking, by contrast, job levels have generally changed no more than 2% a year, government data show.

The violent ups and downs in mortgage banking have caused many executives to rethink fundamentally their use of permanent staff.

"There is a lack of desire to invest in human capital," says Alan Gutterman, president of Response Professional Placement, New York. "They feel they don't have to have permanent employees."

As a result, he and others said, the use of temporary and part-time employees is growing rapidly.

At Resource Bancshares Mortgage Group, Columbia, S.C., about 15.5% of its 762 employees in March were temporary, up from 3.8% of its 373 employees in March 1995. The company also has increased its use of overtime pay for full-time employees as a way to keep pace with business growth without hiring people.

"Temps and overtime can be controlled," said Michael Watson, a spokesman for Resource.

Managers at the company hire temps for three-month stints, Mr. Watson said. After three months, the manager reviews the situation to determine whether the employee should stay another three months.

Part-time employees also can help. At Knutson Mortgage Corp., Bloomington, Minn., working mothers often field customer phone calls from 10 a.m. to 2 p.m. This is a heavy calling period because of lunch hours, and it is convenient for mothers whose children are in school.

Knutson relies on people willing to work unconventional hours to staff its telephone lines, which are open more than 100 hours a week, said Ellen DeSua, vice president of human resources.

Then there's flex time - tailoring work hours to suit full-time employees and their tasks. Resource Bancshares, for example, lets employees take loan files home and review them at their convenience. Employees are paid by the file.

Whether people are part-time or full-time, they are increasingly employing a wide variety of skills. Executives and consultants say that multitalented employees are essential to adapt quickly to changing business conditions.

Lenders might seek employees who can both underwrite and fund loans, or perform more than one back-office task. Employees are shifted among functions as business conditions warrant.

"The more skills someone has, the easier it is to hire him," said Knutson's Ms. DeSua.

Don Britton, executive vice president at Old Kent Mortgage, Grand Rapids, Mich., said he seeks to keep a solid core of skilled employees on hand at all times, even if they fill unskilled jobs when production is down.

"If we have someone in a clerical function in slow times, when it is busy we put them into a higher skilled position," Mr. Britton said. The clerical post left open can be filled more easily than the skilled job could, he said.

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