In lean times, consider hiring.

• Author: Ladd, Scott
• Position: Private companies

With the unemployment rate surging past 10 percent and little immediate relief in sight, private companies, in particular, are likely wrestling with critical hiring choices as they enter 2010: Cut more jobs, make do with an already beleaguered workforce or add new talent and perhaps invite higher short-term financial pain.

Not surprisingly, most companies are steering clear of the third option. Some are continuing to reduce payrolls even further. Small businesses continue to shed jobs, having cut another 75,000 in October, according to estimates from payroll processing company ADR The total in layoffs for companies have 50 or fewer works since 2008 is more than 2.6 million, notes ADP

Even industries better positioned to withstand economic storms--health care and pharmaceuticals, for example--are feeling the pinch. One major player, Johnson & Johnson Inc., recently announced plans to eliminate 8,400 jobs, citing poor business conditions and shaky short-term prospects. And the potential tax implications of new federal healthcare and cap-and-trade legislation offer another veneer of worry for business owners and executives.

"Everyone is skittish, everyone is nervous," says Ken Goldstein, an economist for global business and research association The Conference Board. "Businesses might be able to hire one or two more people, but even small businesses that want to expand and hire more can't get loans. They can't get banks to sign off on deals."

Company officials are confronting a near future of stagnant or smaller staffs, many of them working longer hours for less pay and forced to absorb the workloads of laid-off former co-workers. They're also shouldering higher levels of responsibility and stress. Surveys show worker satisfaction rates dropping sharply.

On the flip side, most employees have few if any career options. "The one thing companies can count on in this environment is that it's unlikely people will be hired away. But it adds to the level of un-happiness. People have no place to go," says Goldstein.

Lean and mean may be a philosophy of the moment. But it could be a blueprint for trouble down the road. In the prevailing environment, keeping valued employees motivated and productive is a management imperative, experts say. Ensuring employee satisfaction isn't only an important short-term strategy. It could mean fewer alienated workers, and ultimately fewer flights of disgruntled top talent once the economy improves.

Among strategies to...