Hiring Slowdowns – the agile alternative to a Hiring Freeze
Written by Rob Blythe, co-CEO and co-Founder
With the recent economic turbulence, we’ve seen many companies go on a “hiring freeze”.
If you’re implementing a hiring freeze due to fundamental business concerns, then your time will be better spent focusing on those issues rather than reading on!
If, however, you’re considering (or currently implementing) a hiring freeze for another reason, be that a cautious approach to economic uncertainty or a tactical decision in the run up to your next investment round, I’d encourage you to reconsider as there could be some unintended consequences:
- Talent Retention: A hiring freeze can send a message to current employees that the company is in trouble. Top performers are likely to be more open to approaches from competitors who are still hiring and are in a perceived position of strength as a result.
- Speed of Response: It takes time to thaw a recruitment pipeline after a hiring freeze –you might lack the agility you need to respond to new opportunities.
- Clarity & Confusion: You may want to replace a key team member during a hiring freeze which, unless communicated really clearly, is confusing for both existing employees and candidates.
When we have clients whose hiring needs reduce, we encourage them to refer to it as a hiring slowdown rather than a hiring freeze.
We provide the flexibility for them to reduce the size of their recruitment team and then make sure that the remaining team uses any quieter periods to talent pipeline for future needs and make key strategic improvements from exploring new markets to redesigning processes.
When hiring slows we see it as the in-house recruitment function’s responsibility to ensure that we’re ready to deliver even more effectively when hiring needs inevitably return.
I also asked ChatGPT to write an article on "why companies shouldn't go on a hiring freeze”. I hope mine is significantly stronger but I’d appreciate any feedback as ChatGPT beat my expectations!
A hiring freeze is a common reaction by companies facing financial difficulties, declining profits, or uncertain economic conditions. However, this knee-jerk reaction can have far-reaching consequences that can significantly harm the company in the long run. Here are some reasons why companies shouldn't go on a hiring freeze.
- Lack of talent: By putting a hiring freeze in place, a company is essentially halting its ability to bring in new talent. This can lead to a shortage of skilled workers and stifle the company's growth and competitiveness. The lack of new talent can also lead to burnout among current employees, who will be expected to pick up the slack and work longer hours.
- Inability to adapt: In today's fast-paced business environment, companies must be agile and able to respond quickly to changing market conditions. A hiring freeze can prevent a company from adapting to new opportunities and challenges, such as expanding into new markets or developing new products and services.
- Missed opportunities: The hiring process can take time, and a hiring freeze can cause a company to miss out on critical talent. If a company puts a hiring freeze in place, it may miss the chance to hire top-performing candidates who are quickly snapped up by competitors. This can have a lasting impact on the company's ability to attract and retain talent in the future.
- Damage to company culture: A hiring freeze can send a message to current employees that the company is in trouble and may not be a secure place to work. This can lead to decreased morale, reduced motivation, and increased turnover. In turn, this can harm the company's culture, making it more difficult to attract top talent in the future.
- Increased costs: While a hiring freeze may appear to be a cost-saving measure in the short term, it can actually end up costing the company more in the long run. For example, if current employees are overworked and burn out, the company may be forced to pay for sick leave, turnover costs, and recruitment expenses.
In conclusion, a hiring freeze may seem like an attractive option in the face of economic uncertainty, but it can have far-reaching consequences that can harm a company's competitiveness, culture, and bottom line. Instead of going on a hiring freeze, companies should explore alternative solutions, such as reducing overtime, cutting non-essential expenses, and re-evaluating their workforce needs. By taking a proactive approach, companies can protect their workforce, maintain their competitiveness, and continue to grow and succeed in the long term.