What is a hiring freeze?

A hiring freeze means you temporarily stop hiring new employees. This usually includes adding new roles and hiring replacement workers if someone leaves the company. It’s a way to control costs if your organization foresees incoming financial issues or is already struggling financially. Hiring freezes are sometimes used to avoid layoffs and can last indefinitely, depending on the general economic conditions and the company’s performance.

Companies handle hiring freezes differently based on the situation. Some organizations might continue to fill positions they deem essential, only freezing hiring for nonessential roles. Others might only pause hiring for permanent, full-time positions. This could allow for freelance help, outsourcing or temporary employees to fill in the gaps.

When a hiring freeze makes sense

A hiring freeze is usually tied to the company’s finances. You might have immediate cash flow issues or anticipate financial strain soon. These situations can happen due to internal decision-making or factors such as liquidity issues or shortfalls in the budget. Many tough decisions may also be caused by external factors, which could include industry-specific changes, recessions or a global crisis.

Effects of a hiring freeze

The obvious effect of a freeze on hiring is no new employees. This has a ripple effect that can impact productivity and employee satisfaction. Being aware of how the temporary pause in hiring will affect your organization and employees can help you proactively deal with those issues. Some things that could happen include:

• Excessive workload: Your organization still needs its essential functions to happen. That means your remaining employees will likely have to take on extra responsibilities. This could spread them thin or cause them to work overtime.
• Change in performance: As employees take on more duties, their performance levels could slip. This could be because they’re trying to get as much work done in a day as possible, or they might be too stressed or tired to perform to their full capacity. Other times, it’s frustration with the situation that can affect work outcomes.
• Missed deadlines: If the workload is too high, it might be difficult or even impossible for your employees to finish projects on time. This could potentially affect your profits and customer satisfaction.
• Employee well-being: Increasing responsibilities can affect your employees’ well-being. They might feel tired and stressed. This can affect their physical health. Keeping employees healthy and happy is important for high productivity and overall morale.

Helping your team through hiring freezes

Although most hiring freezes are temporary, you may wish to plan for a long-term situation to help your team. Providing support can boost morale while keeping productivity and performance high. Here are some ways you can support your team while they wait for hiring to resume.

1. Get leadership on board

During a hiring freeze, having a supportive, united front across the leadership team can minimize the effects. Meet with your managers to ensure they fully understand the situation. Let them know how to communicate information about the hiring freeze and what they’re expected to do to support employees.

2. Communicate regularly

Rumors can start quickly when you implement a hiring freeze. Employees might begin to worry about the security of their positions. Communicating clearly and regularly can help ease those worries and keep employee confidence higher.

It can also help employee morale to know what’s happening. Dealing with a sudden increase in workload can be frustrating, but knowing that it is a temporary situation may make it easier on them. Explaining why you need to hold off on hiring and giving an expected timeline may help keep your team happier. If timelines change and you expect to extend the freeze, let employees know. Transparency is generally the best policy in this situation.

3. Listen to feedback

Two-way communication is always important, but it can be especially helpful during challenging times like hiring freezes. Hearing directly from your employees helps you understand how the situation affects them. You can assess how they’re doing mentally with the increased workload or perceived uncertainty. It helps you figure out if there are ways you can support them or resources they need to do their jobs well.

Seek feedback from your employees regularly. Doing one-on-ones with your team gives you a chance to talk directly to individuals. You can also have informal conversations when opportunities pop up throughout the day. Take notes on those conversations to assess how things are going. Use the feedback to make changes and improve support.

4. Work on retention

Going through a hiring freeze doesn’t necessarily mean you’ll be short-staffed. If your retention is high, you could continue like normal with little to no changes in the workload. Using employee retention strategies to keep your current staff could help you sail through the freeze smoothly.

Work toward a positive environment that values employees’ contributions. Fostering positive work relationships can improve teamwork and encourage people to stay. Another effective strategy is finding ways to recognize your employees. Acknowledge their achievements and their extra contributions to keep the company running well.

5. Evaluate current employees’ skills

Knowing what skills you have available within your current team can help you deal with unfilled positions. When you know a hiring freeze is happening, look at the skills, certifications and knowledge of your existing employees. This can help you develop a plan for covering duties if someone leaves the team. You can also look for gaps in skills to identify potential training opportunities.

6.Cross-train employees

Your current employees can better handle their new responsibilities when you implement a cross-training program. Cross-training means you teach employees how to perform the duties or responsibilities of another person’s role. These are tasks that the employee doesn’t normally do in their position.

By cross-training your staff, you have multiple people who know how to handle key responsibilities. This makes it easier for your team to pick up the slack if one of their colleagues leaves the company during a hiring freeze. The remaining team members know how to handle the duties competently.

If you just toss employees into a new role or add duties to their day, they might feel unsupported. Employees who haven’t done those tasks before might not know how to perform them well. Their productivity could also be lower. Proactive training can help ease the transition if someone leaves the team and you can’t replace them immediately.

7. Streamline processes

A hiring freeze is a good time to evaluate your current procedures to make sure they’re necessary. You might find that some processes are outdated or not as simple as they could be. Eliminating unnecessary tasks and streamlining what remains can ease the workload for your team. It lets them focus on the most important tasks, especially if their workload increases after a team member leaves.

8. Provide necessary tools and support

A similar way you can support your team is by making sure they have the tools and resources they need to do their jobs efficiently and effectively. This could mean having the right technology or the latest version of software programs they use regularly. You might upgrade to new programs that let you automate some parts of the job.

If it falls within the plans of your hiring freeze, you might outsource duties temporarily if employees can’t keep up. For instance, if your bookkeeper quits, you might outsource the essential bookkeeping tasks to an accounting service instead of asking other employees to handle them.

9. Maintain recruitment efforts

You might not be hiring immediately, but that doesn’t mean you should stop your recruitment efforts entirely. Having good prospects in the pipeline means you can move quickly as soon as the hiring freeze is over. Communicate with any job seekers in your candidate pool to keep them updated on the hiring situation. Knowing what you’ll need when you can hire again can also help you focus your recruitment efforts and give you a chance to sift through previous applicants to find people who might fit those needs.