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Hiring Freeze: An Actual Freeze or an Opportunity for Growth?

In the background of a global recession, the hiring freeze scenario is becoming an increasingly popular solution to save the business. Find out if it works for you.

Andrew Vasylyk

Head of Sales & Co-founder

LinkedIn

7 minutes

March 6, 2023

Hiring Freeze: An Actual Freeze or an Opportunity for Growth?

In the background of a global recession, the hiring freeze scenario is becoming an increasingly popular solution to save the business. Find out if it works for you.

Operating during a hiring freeze — go through it with use to your business

"A hiring freeze doesn't mean you can't pursue new opportunities, it just means you have to be more creative and resourceful in how you approach them."
— Mary Barra, CEO of General Motors.
What is a hiring freeze?

A hiring freeze is a decision made by an organization, typically a business or government entity, to suspend the recruitment of new employees temporarily. The decision is usually made as a cost-cutting measure when an organization faces financial difficulties or needs to reduce expenses.

Hiring freezes can significantly impact an organization’s operations, particularly regarding workload distribution and employee morale. 

Common reasons for a hiring freeze

Budget constraints

1

An organization may decide to implement a hiring freeze when facing financial difficulties, such as a decrease in revenue, a decrease in funding, or an increase in expenses. A hiring freeze can be an effective cost-cutting measure allowing an organization to reduce costs without laying off employees.

Restructuring or reorganization

2

An organization may implement a hiring freeze when undergoing a restructuring or reorganization process, such as a merger, acquisition, or consolidation. The freeze can help the organization streamline its operations and ensure the right personnel is in place once the restructuring is complete.

Uncertain economic conditions

3

An organization may implement a hiring freeze during economic uncertainty, such as during a recession or political instability. The freeze can help the organization mitigate the risks associated with economic uncertainty and ensure that it is prepared for future challenges.

Overstaffing

4

An organization may implement a hiring freeze when it has excessive employees relative to its current needs. The freeze can help the organization avoid further overstaffing and ensure it is operating efficiently.

Strategic planning

5

An organization may implement a hiring freeze as part of its strategic planning process, such as when developing a new business plan or revising its existing one. The freeze can help the organization to align its personnel needs with its long-term goals and objectives.

Technological advancements

6

As automation and artificial intelligence continue to advance, some organizations may choose to freeze hiring as they automate specific tasks and roles, decreasing the need for human labor.

How to improve teams without hiring new talents

While a hiring freeze is a difficult time for business, it’s also an opportunity to use the time to strengthen teams and develop strategies once everything is back on track.

Managers can invest time in strengthening the internal team and processes: 
  • working with a team, working on development plans, building personal relations, and growing in other related areas;
  • revision policies and processes; work on matrix, spot and fix problems;
  • still work with pipeline and get contacts for future opportunities;
  • work on employer branding;
  • develop cross-functional relations and support functions like sales (which might be overloaded in such periods);
  • the team might use this time for knowledge-sharing sessions and personal development.

Core internal processes to focus on during a hiring freeze

Implement process improvements

1

Organizations can implement process improvements to streamline workflows and increase efficiency. It can involve identifying and eliminating bottlenecks, automating tasks & implementing new technologies, and improving communication and collaboration among employees.

Prioritize employee development

2

Organizations can prioritize employee development by offering training and development programs, mentoring, and coaching to help employees acquire new skills and improve their performance. It can help to build a more skilled and motivated workforce, which can be critical during a hiring freeze.

Don'ts during a hiring freeze

During a hiring freeze, there are some things that organizations should avoid doing to minimize the negative impact on their employees and overall business operations. Here are some "don'ts" during a hiring freeze:

Don't make promises you can't keep

1

If you communicate to your employees that there will be no layoffs during the hiring freeze, ensure you can follow through on this commitment. False promises can erode trust and morale among employees.

Don't neglect your existing employees

2

During a hiring freeze, it’s essential to ensure that your existing employees feel valued and supported. Ensure that you provide them with the resources, training, and support they need to manage their workload effectively.

Don't stop communicating

3

Communication is critical during a hiring freeze. Keep your employees informed about the company’s plans, including the reasons for the hiring freeze, what it means for them, and how long it will likely last. Be transparent and responsive to their questions and concerns.

Don't ignore the impact on recruitment

4

Even if you are not actively hiring during a hiring freeze, it’s essential to maintain a positive employer brand and reputation. Neglecting your recruitment efforts during this time can make it more challenging to attract top talent once the hiring freeze is lifted.

Don't forget about long-term planning

5

A hiring freeze is a short-term solution to manage immediate budgetary concerns. It may involve identifying and developing internal talent, investing in technology and automation, and exploring new revenue streams. However, it’s crucial to maintain a long-term perspective and plan for the future.

Quiet hiring is one of the strategies during a hiring freeze

Along with a hiring freeze, here comes a new trend of 2023 — quiet hiring. It can be a helpful strategy during a hiring freeze, allowing companies to fill critical positions without violating them. 

Quiet hiring involves hiring part-time, contract, or freelance workers to fill company workforce gaps. By doing so, a company can access the skills and expertise it needs to grow and develop without making long-term commitments to full-time staff.

Quiet hiring forms

Once you've decided to go on a quiet hiring strategy, consider the two ways of implementing it. However, in both situations, you should be completely transparent — communicate any strategic decision with your employees and act correctly & ethically.

Internal quiet hiring

1

Within internal quiet hiring, you can shift your employees between different positions and departments — provide them with new opportunities for upskilling and promotion. 

Focusing on employees’ professional development, work, and the tech environment can boost your company’s productivity and innovativeness.  

Make sure that new assignments are exciting and valuable to people, and well rewarded. Otherwise, you risk turning internal quiet hiring into a burn-out machine in the long term. 

External quiet hiring

2

Unless you still want to hire during a hiring freeze and have a substantial lack of specific expertise but limited time and resources — go for the external quiet hiring. Following this strategy will allow you to hire contractors to fill in the skills gaps to keep your business running.

Forms of external quiet hiring

Depend on the business goals you pursue:

For small or short-term tasks

1

You can hire freelancers, consultants, and individual contractors. 

Freelancers are usually hired through freelance platforms, such as Upwork, Fiverr, and Freelancer, that connect companies with freelance workers who can provide short-term or project-based services.

For finding consultants and individual contractors, companies can reach out to industry contacts or attend networking events to find qualified candidates for short-term or project-based work. 

For strategic staffing

2

You should hire staff augmentation companies that let you hire teams 100% integrated with your in-house ones but will allow you to cut costs and limit liabilities.

If you decide to go this path, here is our list of 5 staff augmentation companies worth your attention. 

For projects that have a set scope

3

Hire software development companies for custom solutions, or consider investing in a ready solution if applicable.

Remember some steps to follow when looking for a software development company to find the best safe contractor that meets your needs. 

Let's sum it up!

Though a hiring freeze may seem like a negative tendency at first sight, it can be an opportunity to reassess the company’s existing workforce and strategize for the future:

 

  • Evaluation of existing talent, helping to identify areas where additional training or resources may be needed;
  • Review of a hiring process and assess whether it’s effective;
  • Streamline processes, adopt new technologies, and focus on internal projects that may have been deprioritized in the past;
  • Investment in the existing employees provides development opportunities, increases job satisfaction, and a better retention rate.

 

While hiring freezes may initially seem like a roadblock for businesses, they can be turned into opportunities for growth and improvement. 

Andrew Vasylyk

Head of Sales & Co-founder

LinkedIn
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