What Do Employers Accomplish From "Hiring Freeze”?

If your company is currently experiencing financial pressure, it is probably the best time to implement a hiring freeze.

What is hiring freeze?

As the name suggests, a hiring freeze is derived from two words: hiring which means recruiting or hiring someone new on board, and freeze which means an act of holding at a fixed level or no movement; then hiring freeze means to stop hiring new candidates for any position in a company.

A hiring freeze is usually conducted in an attempt to manage human capital costs in times of crisis or when an organisation is experiencing a financial downtime. The freeze can be temporary for short-term or long-term and is sometimes used as an alternative to layoffs.

See also: Hourly Employee: Reasons and Guide for Employers

How does hiring freeze affect employer and the whole team?

In most cases, hiring freeze will bring negative impact to the company and team. Why? Because when there is no new team member to help more assigned tasks, current employees should spare their time to help. This could result in excessive workloads and mounting tasks for current employees that later could lead to burnout. When this happens, productivity and performance can decrease.

Another negative result of hiring freeze, according to Brian Formato, is that when your organisation stops advertising new jobs in the marketplace, the employment brand becomes tarnished. Hiring platforms you use will also turn off candidates from having an interest in your company, making it hard to recover when you want to start hiring again. At the worst part, employee morale will suffer and there will be low employee engagement.

It is not all about the nightmare, however. You might actually benefit from hiring freeze. The biggest benefit is that employer can save company’s financial budget. Doing “the right” hiring free can also improve productivity, getting the work done from fewer hands. Just like Basecamp company, the team achieved success in 2017 when they conducted hiring freeze to save cost and improve morale as well as engagement.

David Heinemeier Hansson, the founder and CTO at Basecamp, commented that they are not at all about running faster, squeezing out more productivity from fewer hands which is quite contrary from most companies. The constraint of having the same team means that you also only get to do the same amount of work. Ensuring that the pressure given to current employees is right, giving no burden or stress, that is what hiring freeze should be. Doing this, employees can focus on more effective work, added David.

How to announce hiring freeze?

Announcing hiring freeze cannot be done by simply telling the team that you will do the program, as employees might develop negative thoughts regarding the initiative. But it does not mean that you should tell lies about your financial crisis too.

Then, the best move is by announcing a hiring freeze with some context. For example, if you implement the freeze for only one area of your organisation, you should communicate the matter to the staff in a way that does not invite massive chaos. To do this, you can follow these simple tips from Career Minds in writing an announcement email.

• A simple greeting such as Dear (insert information) employee
• A date
• Background about the financial situation and steps that have been taken to assess and correct any issues before hiring freeze
• An announcement of hiring freeze, including why this choice was taken
• Information about how expectations to the freeze will be handled
• Information about how long the freeze will be
• A high-level overview of how organisation plans to monitor the effectiveness of hiring freeze
• Appreciation for employees continued hard work and dedication to the organisation
• A simple signature form the top executive

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