What is a Hiring Freeze?

A Hiring Freeze is when a company or an employer stops the non-essential hiring of the personnel to reduce financial duress and preserve company morale. It can also be implemented due to a Recession or other economic or Market downturn.

The timeline for a hiring freeze is entirely decided by the company based on the cause of the cost-cutting effort.

Why do Organisations Consider Hiring Freeze?

It organisations reacquire financial balance or employee morale. With Hiring Freezes, companies can reduce or eliminate non-essential positions, considering the payroll expense growth. Meanwhile, the management can restructure their workgroups and consolidate employees in order to provide Efficiency in the production of goods and other services for their customers.Here are some common situations where a company may implement a hiring freeze:

Global Crisis

During global crises, such as the Covid-19 outbreak, many businesses were negatively impacted by situations. It is during these times that businesses temporarily stop recruiting new employees, monitoring the global market and trends.

Budget Defalcation

If a company finds hiring new employees at present will result in budget defalcation for the quarter, a hiring freeze is considered as the best cost-containment strategy. Herein, the recruitments are held off until the financial position of the company is improved.

Shifts in Market Conditions

Changing market conditions can have a significant impact on the overall revenue and profitability of a company. In this case, a company may implement a hiring freeze to counter the impacts of the shift.

Impacts of Hiring Freeze

Hiring freeze may lead to an increased workload on existing employees because of the additional tasks allocated in the absence of new employees. The employees may experience a period of pressure and confusion, which can affect employee productivity in the long run. And this can ultimately result in more employees leaving the company.

How to Respond to Hiring Freeze?

It can be exhilarating to make a connection with a company going through a hiring freeze. But don't worry, there's always a way out. In case you find yourself interviewing at an organisation that suddenly strikes a hiring freeze, know that it's not the end, and you only need to wait for the right time. In most cases, the hiring freeze will lift (usually after a period of 3 or 6 months), and the employer will need to fill in the vacant position. It is here when you need to ensure you're top-listed amongst all the candidates.

Once the employer notifies you about the hiring freeze, convey that you're still very interested in the opportunity and would keep in touch. You can also ask them for a specific date when they'll be revisiting the role and ensure to follow up with them as per the specified date. In case they don't indicate any timeframe, follow up every few weeks or months during the freeze.

Takeaway

Hiring freezes can be implemented by businesses for several reasons. However, they are usually associated with adverse circumstances or losses. But that's not always the case. Implementing a hiring freeze can not only prevent employers from aimlessly adding employees to the company, but rather work on improving the current situation of the company. Besides, understand that a hiring freeze doesn't mean that all hiring will be stopped. A company may continue to hire new employees for specialised job roles essential to meet the demands of the customers. Such positions can be filled with freelance, part-time or contract position workers to keep up with the company's core operations.