Hiring freeze in general has a chilling effect on the employees and employers. But in certain ways, this otherwise difficult decision makes way for some incredible changes in the company’s functionality for either a short or long-term. Going beyond the general notion that hiring freeze is “sometimes used as an alternative to layoffs”, in reality, it fetches an opportunity to create a reform in the human resource.
“Entering into a hiring freeze is a slippery slope between doing what is best for the company, managing expectations, and making sure your employees feel confident in you” – Source
But before getting all worked up with the concept, let’s explore the causes and outcomes of this phenomenon.
So, Why Do Companies Opt For Hiring Freeze?
A company’s decision to inculcate hiring freeze in the system for a given time can be different from another organization.
“Companies implement hiring freezes to protect company finances and preserve company morale.” – Source
But that is not the only one reason; find below more scenarios where a company decides to implement hiring freeze in their active functionality:
Crossing beyond the quarterly budget: This scenario speaks of the situation when the salaries of the existing employees are exceeding the budget for the current quarter. At this time, companies slow down or completely stop hiring of new employees only to resume it in the next quarter.
Decreasing of liquid assets: When the employer is concerned about the absence of lesser liquid assets that can cover the costs of the existing assets in time of need. At this point, hiring freeze is implemented. “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.”
When the company decides to expand its offerings: Today, we see a lot of companies evolving beyond their prolonged specialization. For example, a company dealing with mainly providing loan against gold now starts serving people who need financial consultation. In this transformation of product and service offering, the company can decide to stop recruitment for the time, again to start the same in the next quarter.
How Does Hiring Freeze Affect The Existing Employees?
Hiring freeze can affect employees differently. In general, employees can take up additional tasks beyond their specified job roles in the absence of employees who left. Also, this can bring a somewhat uneasiness in their minds – a sudden shift of confidence in this period can affect them and if their concerns are unaddressed – it can lead them to think about their choice in being with the company.
This crack in employee morale can easily be filled with transparency of the management in this issue. At the very mention of hiring freeze, employees develop this misunderstanding that their jobs are at stake or their responsibilities in the company are going to get multiplied without any addition of perks. This feeling is normal but NOT REAL! And it is the job of the management and recruiters to communicate and make them feel secured by clearing the air. Employees have to be educated about the positive outcomes of hiring freeze in this case.
So, What Can Be The Positive Sides Of Hiring Freeze For Both Employers & Employees?
Employees work for a cost-conscious company
Hiring freeze also eliminates the rate of over hiring in the company, thus saving multiple resources for the company. This shows employees how the company is mindful and is determined to prevent any situation of waste.
Employees understand their value in company
Instead of viewing it as an unwanted phase of ‘lay-off’, employers must make it a point to see it as the opportunity to demonstrate how the employees are valuable to the company. With this practice the existing employees develop the idea that their efficiency is being valued by the company and thus it can give them the boost to perform better.
Employees are likely to develop new skills
The moment an individual takes up responsibility beyond the specified job role, they stand a great opportunity to develop new skills which will help them enhance their professional edge and thus, they stand a better chance of getting promotional perks with consistent career growth based on experience and knowledge.
Management can focus on team-building
RECRUITERS, this is for YOU! This frozen phase of the hiring can give you an opportunity to prove the management that the existing employee pool you have created can be forged into excellent teams of talented people who will be dedicated to take the company to a greater level of growth. Also, in this time, inculcate confidence within the employees so that they develop themselves and become valuable resources for the company.
How To Respond To Hiring Freeze? A Note To Recruiters
1. Develop The Employer Brand: This step makes the company a star in the industry as it gets an image of ‘a desired place to work’. The employer’s brand highlight inspires the candidate to feel confident about applying in the workplace.
2. Improve The Existing Hiring Process: The frozen time-span in the company allows to focus on the development of the internal processes and that includes recruitment protocols. This frozen state gives an insightful glimpse on the obsolete ways and loopholes of the recruitment procedure of the company. This way the company can hire better candidates in the future.
3. Evolve The Recruitment Process For Future: The most effective practice for recruiters in this frozen period is to self-educate. Catching-up with the recruitment trends as well as the sourcing techniques and also going through the relevant recruiting articles in the feed, YouTube videos can help the recruiter evolve to a great extent, so that the future hires are dependable for the long-term growth of company.
4. Opt To Transform Digitally: This is the age of digital transformation. If you are still hiring in ways like before, it is high time to implement the power of digitalization into the system. How? By working with a competent evaluation software that will help you to choose the best talent from the haystack. Empowered with in-built features that give an accurate analysis of the candidates’ skills, the system will help you to conduct the prolonged process of onboarding seamlessly!
Testofy is one such platform that is dedicated to minimize the perils of recruitment in times of needs for companies. And through this blog, we have tried to highlight this lesser-trodden concept of hiring along with the solutions to the challenges. Hope it helps : )