Getting Introduced To Hiring Freeze
A company discontinues hiring new employees or creating new positions for a specific period or until further notice. Mostly the non-essential roles are halted but, the company may hire some personnel for the essential roles. Hiring for the non-essential roles will remain halted until the company finds it necessary to lift them. The vacancies can get created due to the termination or resignation of previous employees or the employees might have taken a temporary leave. Let’s know the reasons for Hiring Freeze.
Reasons For Hiring Freeze
Cost-cutting is the direct reason here. Some indirect reasons are:
- Changes in the conditions of the market:
The market may bring out new policies to be forcefully followed by the companies. Thus, the company will have to pay there instead of spending on new employees.
- Global crisis:
Some events like a war, a pandemic, or a natural disaster can hit the economy on a large scale.
- Product failure:
Some products may fail in a company affecting its financial condition badly. The company will have to either spend on recreating the product or on planning, developing, testing, and selling the product from the beginning.
- Unexpected expenditure:
A company may face a sudden loss in some of the areas. Thus, it will have to shift its expenditure for recovering that loss instead of recruiting new employees.
- Internal reorganization:
The company may need some time to reorganize some teams, provide them new responsibilities, create new teams, and hire skilled trainers to train the employees in their respective fields.
- Changes in procedure or policies:
They might want to see how changes in the policies or procedures of employees affect the existing employees and the other aspects of the company as well.
- Decreased sales:
A decrease in the demand, increase in costs, an inappropriate strategy for the sales, or faulty products can lead to a fall in sales. It can hit one of the vital sources of income for the company.
Advantages Of Hiring Freeze
- Time to recover the financial loss:
Since cost-cutting is the direct reason for a hiring freeze, keeping the hiring on halt helps the organization recover the loss of finance over a certain period. It is an ideal case.
- The teams can be restructured and strengthened:
It helps in increasing the efficiency while producing required products.
- It can act as an opportunity for the temporary workers:
The company is expected to hire temporary workers in this period. Thus, this can be an amazing opportunity for temporary workers such as freelancers, workers working on contract or through agencies, independent workers, interns, part-time workers, etc.
Disadvantages Of Hiring Freeze
- Overload on the existing employees:
Since there are a lot of vacancies in the company and new personnel are not getting hired, the workload falls on the existing employees. Whereas, some jobs such as production, testing, and sales cannot be stopped in this period.
- Unnecessary expenditure has to be avoided during a hiring freeze:
Though the company can spend on production during a hiring freeze, an unnecessary expenditure should be avoided to overcome the financial crisis. A company should keep on trying to increase the revenue during this period.
- Existing employees may leave too:
The existing employees may leave anytime. The reasons include maternity leave, retirement, regular turnover, or a heavy workload due to the hiring freeze.
- Hiring temporary workers during a hiring freeze may hit the budget again:
It will happen if the company doesn’t have enough budget even to hire some temporary workers.
- The Transferrable skills will be lost:
Most of the employees have already left the company, existing ones may leave anytime, and temporary employees are getting hired. It results in the loss of transferable skills that can be transferred by the old skilled employees of the company.
- The existing employees won’t get time for personal development:
It may lead to poor outcomes or termination of those employees.
- It may lead to confusion:
Many employees have been laid off, and existing employees are responsible to complete their remaining work. It may create a lot of confusion.
- It may create a bad impression amongst the candidates:
Though it is a measure to get out of a financial crisis, the truth is, the company is suffering from a budget imbalance currently. Thinking that it may arise in the future again, some candidates may not choose to work with such a company.
- Existing employees may be forced to work with the ones they don’t want to work with:
Different employees may come up with various ideas to complete the work left by previous employees. Their ideas may clash and this may lead to frustration and disagreements. They may also choose to get out of the company.
Thinking Positively About The Hiring Freeze
It is not always bad for every stakeholder. Here are some positive aspects:
- Existing employees can get the leadership opportunities:
Existing employees are expected to do the jobs left by the laid out employees. Thus, the existing employees may work across various roles and get to learn new things. They can further lead existing or new employees for performing those roles.
- The company values the existing employees:
Some employees have still not been laid out. It means that the company considers them as one of the major contributors to the enrichment of the company.
- The company is serious about the costs:
It depicts the financial tactics of the company. It has already sensed danger and is now working to get away from it until everything messes up. It also prevents over-hiring that can lead to more employee termination in the future.
- It encourages team building:
Since existing employees are sharing the workload, they understand each other’s situation. They may opt to help each other, share knowledge, professional relationships, and experiences.
- The employees, as well as the candidates, will get to know how a company faces a financial crisis:
This experience will motivate the employees and the candidates to handle their financial issues wisely. In-depth research cannot be done, but people should always try to observe such a critical situation deeply.
Getting Out Of The Hiring Freeze
- Certain positions can be filled by hiring part-time workers, independent workers, freelancers, or people working on contracts.
- The company cannot sit idle. It will have to try everything to increase the revenues during this period.
The candidates need not worry every time if their application has been put on hold. Their applications may get no response or they may even end up getting rejected. But the candidates are not wrong everywhere. The company might have imposed a hiring freeze. The hiring freeze is a major step in saving the company from a downfall if some financial crisis has been sensed. There can be many reasons to halt the hiring for a certain period, but most of the reasons are negative.
Frequently Asked Questions
1. How Long Can A Hiring Freeze Last?
It depends on the company and the cause of the freeze. It may typically last from 3 to 6 months as the company gets out of the financial crisis.
- Should The Candidate Apply Somewhere Else If the Current Company He/she Has Applied To Has A Hiring Freeze?
- The candidate is advised to get more information about the freeze and its reason. If the freeze is going to be extended for some more time, then the candidate can search for some other job. However, the candidate should keep in touch with the employer for related updates.
- Ideally, the candidates are not recommended to wait for a company that has kept their applications on hold as it can waste the time of the candidates. The candidates might miss other amazing opportunities while waiting for a company.
- The candidates are still advised to present a good cover letter and resume for utilizing every single opportunity.
- Whom Should An Employee Approach To Discuss The Concerns About The Hiring Freeze?
The employees should get answered for the concerns related to the hiring freeze. They can directly approach the manager, supervisor, or a member of the HR department. The employee will also be able to know about his upcoming responsibilities, in case, if the hiring freeze gets extended. There is a difference between stopping and halting. If the hiring process has been stopped, there are hardly any chances of getting hired but, if the hiring process is just a halt, then the candidates may get hired after the halt ends.
- What Is A Salary Freeze?
The company or Government halts an increase in salaries or wages of its employees for a certain period or until further notice. This is called ‘salary freeze’ and is also known as ‘pay freeze.’ Like a hiring freeze, the direct reason for a salary freeze is to cut costs. The senior employees may not take it for a long time if they find that their salaries don’t match their workload. Thus, many of them may end up leaving the job.