Many tech startups these days are currently putting their businesses on a hiring freeze due to a turbulent economic condition. This situation is worsened with some major layoffs happening; not only in the US, but also in some Asian countries like Indonesia. Hiring freeze is not exactly the same as layoff or furlough, as it is basically halting all sorts of recruitment within a company. Regardless of whether your company is affected by this situation or if there is any rumor about a hiring freeze, it is best to be prepared if the storm ever comes. Here is what you need to know about the hiring freeze, as well as how both workers and job-seekers can address it.
A hiring freeze is when a business immediately stops recruiting new personnel to fill open positions. A company may continue to hire new employees for essential roles, but any less-essential job roles will stay vacant until the hiring freeze is ended. At the same time, a company restructured jobs across the board. They remove positions that are deemed insignificant, inefficient, or do not contribute significantly to the company’s performance. Instead, they only focus on positions that are thought to make a significant impact.
The most prominent reason why hiring freeze happens is due to a downturn in a company’s financial wellbeing, an upcoming recession, or market disruption. Companies decide to do this to stabilize the company’s expenditures by slowing down expenses. Companies can lessen the burden of pay, benefits, and large recruiting costs by not recruiting new employees. Additionally, the hiring freeze halts spending on research, development, training, and placement, among other things. Thus, the company’s earnings may be saved and used for more crucial activities, allowing the company to continue operating and maintaining its commercial activities. Even with a hiring freeze, a business must do all necessary measures to maximize revenue.
The hiring freeze time frame depends on the business and reasons behind this, such as whether they are having their internal financial downturn or if the global economic situation is to blame. Hiring freeze can last anywhere from three to six months; this is often seen as a realistically normal period of time for recovering financial condition. Employers should keep in mind that a hiring freeze might have a detrimental impact on current employees, as employees may be obligated to take on more work or duty as a result of a relatively small team. Therefore, companies must engage with employees and reassure them that their employment and livelihoods are secured.
Read Also: Is HR Outsourcing More Effective than In-House HR Team?
Even if a hiring freeze is done for the overall wellbeing of a company’s long-term sustainability, it is not going to nullify the fact that this also impact current employees. This can put a pressure on current employees since there may be no replacements for those who leave a company due to retirement, maternity leave, or periodic turnover. It is common for current employees to feel uneasy and confused in the aftermath of a hiring freeze; existing employees must fill the job duties of vacant positions. If the issue becomes too distressing, overall performance and employee work satisfaction may decline. Employees may leave the company if they think their workload is overwhelming and they are not being properly rewarded since the hiring freeze begins.
Even though a hiring freeze is not the same as layoff, there is always a potential that companies may proceed to terminate some current employees as well. This is why you need to pay extra attention if your company is announcing a hiring freeze; you are still prone to losing your job if things do not get better within your company. In doing your job daily, probably along with some additional tasks if your company grows without having extra hires, do your best as usual. If your manager notices that you perform well under a distressing company situation, you may be safer from the risk of layoff, as you show dedication. Start to minimize your tertiary spendings; you need to save up money more than ever, because if the push comes to shove and layoff happens to you, you will still have an emergency fund ready to help you get by. If you fear that you are at risk of layoff, maybe it is time to revamp your resume and look for some job opportunities.
For job-seekers, the hiring freeze that happens in some major startups may fear them. It makes sense, because with more businesses going through this means there are less job openings in the near future. While it is still worth it to try applying for more jobs during their unemployment, job-seekers should also consider gig economy or freelancing. If you are a job-seeker feeling this way, but are still unequipped with in-demand skills for freelance gigs, maybe it is time to scale up and learn new skills, such as digital marketing, graphic design, UI/UX, programming or coding, and many more. Even if you end up finding a job later on, having the mastery in one of the in-demand skills will open the door to freelance gigs that can help you earn more money.
The economic condition after COVID-19 is still in its earliest stages of recovery, yet more financial disruptions are affecting companies at the same time. Hiring freeze is one of the ways for companies to survive. It is indeed a difficult time for everyone, be it employers, employees, or job-seekers. The best thing to do at this point is to prepare for the worst while working our best to get by each and every day.
Read Also: Singaporean Workers Would Consider Quitting their Job Amidst Tight Labor Market
