What Is a Hiring Freeze?
What Is a Hiring Freeze?
Finding a job or internship takes time and effort, from crafting a strong resume and cover letter to submitting applications and nailing interviews. Discover the most effective strategies to secure a position you’re passionate about.
Definition
A hiring freeze occurs when a company temporarily or indefinitely stops filling open positions. During this pause, the employer may also refrain from creating any new roles.
Key Takeaways
- Hiring freezes happen when employers halt recruitment and the creation of new jobs.
- They often occur during economic slowdowns, such as recessions or periods of reduced business activity.
- Employees and job seekers are impacted differently, including fewer job opportunities, rescinded offers, and limited career advancement.
How Hiring Freezes Work
A hiring freeze is essentially a pause on bringing in new staff. Companies may implement it as an alternative to layoffs or furloughs, or alongside other workforce reductions. In addition, organizations may adopt other cost-saving measures, such as:
- Limiting raises
- Canceling bonuses
- Reducing benefits and perks
Hiring freezes are usually enacted when business growth is flat or declining. However, some companies implement them even when performance is steady, as a precaution to protect profits.
Note:
Even if a specific employer is not yet affected, broader economic downturns can trigger hiring freezes across industries.
Examples of Hiring Freezes
- In 2022, Meta (Facebook’s parent company) implemented a hiring freeze across most teams following a decline in quarterly revenue and profits. This affected engineers, data scientists, and other roles, alongside staff reductions and budget cuts.
- Other tech companies also responded to economic pressures that year. For instance, Coinbase rescinded job offers, and Amazon announced a combination of hiring freezes and layoffs to reduce expenses.
Impacts on Employees
Hiring freezes can affect employees in several ways, including wages and slower career growth:
- Stalled promotions: Many companies not only halt hiring but also freeze promotions and internal transfers, limiting advancement opportunities.
- Stagnant career growth: Reduced mobility within the organization means fewer chances to develop your career internally. Opportunities to learn new skills or collaborate with other teams may also decline, potentially slowing your professional development.
- Increased job stress: When open roles go unfilled, remaining employees often face heavier workloads. This can make it harder to meet team goals and may lead to a more challenging and less rewarding work environment.
How to Prepare for a Hiring Freeze
While hiring freezes can be difficult to predict, you can take steps to prepare:
Look for the signs:
Employers are more likely to implement hiring freezes and other cost-cutting measures during economic downturns. Warning signs include:
- Company liquidity or cash flow issues
- Organizational restructuring
- Broader economic challenges, such as recessions
The rule of thumb is simple: when business slows, hiring often slows too. Being aware of these indicators allows you to plan accordingly, whether by building your skills, networking, or preparing for potential changes in workload or career progression.
How Do Hiring Freezes Affect Workers?
Hiring freezes impact employees and job seekers beyond the obvious effects of fewer job openings and smaller teams. Understanding these effects can help you navigate your career during a slowdown.
Impacts on Job Seekers
Rescinded job offers: Employers may retract previously extended offers during a hiring freeze. In most cases, this is legal, and a company can rescind an offer for any reason—or no reason at all.
Fewer opportunities: Widespread hiring freezes reduce the number of available positions, making it harder to find a new role.
Reduced negotiation power: If many companies in your industry pause hiring, you may have less leverage to negotiate salary, benefits, or other terms.
Note:
Employers with 100 or more full-time employees may be covered under the Worker Adjustment and Retraining Notification (WARN) Act, which requires 60 days’ notice for plant closures or mass layoffs. While hiring freezes aren’t covered by this law, WARN notices can serve as a warning that a company may face financial difficulties.
How to Prepare During a Hiring Freeze
- Keep your resume updated: Regularly update your resume, refine formatting, remove outdated positions, and ensure your skills are current.
- Upskill: Review job postings in your field to identify in-demand skills. Consider online courses, certifications, or self-study to fill gaps in your qualifications.
- Stay calm: Job searching can be stressful, but being proactive ensures you maintain options and are prepared if your current employer slows hiring or restructures.
Hiring Freezes vs. Layoffs
| Hiring Freeze | Layoff |
| Temporary pause in recruiting and filling new roles | Employees are terminated, either temporarily or permanently |
| Open positions remain unfilled | May occur as a cost-cutting measure |
| Promotions or raises may be delayed | Large companies may need to provide advance notice |
| Bonuses or raises may be limited | Often affects large numbers of employees at once |
Frequently Asked Questions (FAQs)
How long do hiring freezes usually last?
Hiring freezes typically last a few months, often around three to six months. However, during a recession or significant economic downturn, they can extend longer. Extended freezes are often accompanied by additional cost-cutting measures, such as layoffs, furloughs, or reduced spending.
What does it mean if a job is on hold?
If an employer says a job is “on hold,” it usually means the role is not being filled at the moment due to a hiring freeze, restructuring, or upcoming layoffs. It can also indicate that the position may be offered to an internal candidate or another external candidate instead.
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