What Is a Hiring Freeze? Everything You Need to Know

By Indeed Editorial Team

Updated February 22, 2021 | Published March 12, 2020

Updated February 22, 2021

Published March 12, 2020

Before you get worried about your company's freeze on hiring and what it means for you, it is important that you learn more about its causes and outcomes. By understanding why companies halt their hiring process, you can see how a hiring freeze is actually for your benefit.

In this article, we review what hiring freezes are, why they are implemented, how they affect current employees, and how to view them in a positive way, with answers to frequently asked questions about this workplace occurrence.

Related: 4 Levels of Conflict and Tips for Managing Them

What is a hiring freeze?

A hiring freeze is when a company suddenly stops hiring new employees to fill company positions. A company might continue to hire new employees for roles deemed essential, but all non-essential roles will remain vacated until the hiring freeze has ended.

Related: 4 Communication Styles in the Workplace

Why do companies implement hiring freezes?

Companies implement hiring freezes to protect company finances and preserve company morale. Here are a few situations where finances and morale cause employers to implement hiring freezes:

Exceeding the quarterly budget for salaries

A company might implement a hiring freeze if hiring more employees at present might mean exceeding the budget for employee salaries during the current quarter. For this reason, it might delay the hiring of new employees until a new quarter has started.

Decreasing liquid assets

If an employer is concerned that there are not enough liquid assets to cover the cost of current assets when needed, the employer might implement a hiring freeze. This is so that it could allocate a portion of the salary budget that would go to new employees toward current assets as a last resort.

Waiting to hire new employees after layoffs

Another reason for hiring freezes has to do with maintaining morale among employees. When a company has to lay off several employees, it might wait a considerable amount of time before hiring other employees to take vacant positions. This is seen as a respectful act to current employees whose friends were laid off.

Related: 10 Ways to Have a More Positive Attitude at Work

How does a hiring freeze affect current employees?

A hiring freeze can mean many different things for current employees. Typically, a hiring freeze can cause a department and its employees to take on additional tasks in the absence of new employees who would have been responsible for those tasks.

Additionally, it is normal for current employees to encounter a period of uneasiness and confusion in response to a hiring freeze, but in actuality, hiring freezes can present more positive outcomes than one might think.

Related: 10 Ideas to Improve Employee Engagement

How to view a hiring freeze in a positive way

Here are a few positive ways you can view a hiring freeze within your company:

  1. You work for a cost-conscious company.

  2. You are valuable to your company.

  3. You are more likely to achieve leadership opportunities.

  4. You can focus on team-building.

1. You work for a cost-conscious company

When a company implements a freeze on all hiring procedures until further notice, this is actually a great demonstration of smart financial tactics. Your employer recognizes potential threats to the company's financial stability and is trying to revive it before it becomes unmanageable.

By implementing a hiring freeze, your company could also be trying to prevent over-hiring, which would mean layoffs later on in the process. This demonstrates that your company is mindful of how its actions affect its employees and a determination to prevent such situations from occurring.

2. You are valuable to your company

Instead of viewing a hiring freeze as a potential for layoffs, view it as a demonstration of your worth to the company. If you were not considered a valued contributor to your company's success, it would find an individual to hire as an essential employee who could take over your role. By placing a hold on hiring new employees, you are considered an essential employee within your company.

3. You are more likely to achieve leadership opportunities

When a hiring freeze is implemented, this means that current employees are expected to take on additional tasks from vacant positions. This is a good opportunity for you to take on more advanced roles within your department. You might acquire new skills and qualifications that could be put toward a future promotional opportunity, and you can earn credit among higher-ups for helping the company.

4. You can focus on team-building

You can use your company's hiring freeze as a constructive way to strengthen your professional relationships with your coworkers. As mentioned, you might be expected to complete additional work that you are not familiar with. Take this as an opportunity to rely on your coworkers and collaborate with them to complete difficult tasks and in the process, strengthen your teamwork.

Related: 3 Problem-Solving Activities for Team Building

Frequently asked questions

How long do hiring freezes typically last?

The timeline for a hiring freeze is entirely dependent on the company and the cause of the hiring freeze. They can sometimes last between three and six months. This should be seen as a completely normal amount of time for financial balance or employee morale to be reacquired.

Should I pursue other offers if the company I applied to cannot currently hire me?

If you applied for a job, received an offer and were informed that you cannot currently be on-boarded due to a hiring freeze, you should try to obtain as much information as you can about the cause of this event and how long the company projects it will take.

Keep your options open in case the hiring freeze lasts for an extended period of time, but remain in contact with the hiring manager for updates.

Who can I approach within my company to discuss my concerns about a hiring freeze?

It is normal to feel worried when your company implements a hiring freeze, and there is no reason why you should not get the answers you need to continue performing your job duties well.

You can go to your direct supervisor or manager, or you can approach a member of the human resources department to get more information about the current state of the company, the reasoning for this change in procedure and how it will affect your current responsibilities.

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