If hiring freezes are on your mind, you’re not alone. Although hiring freezes can help protect your company and existing employees against financial uncertainty, they can also cause anxiety. If your company announced a hiring freeze (or if current market conditions are causing workplace stress), it’s important to lead with empathy and find ways to support your team as you navigate uncertain waters together.
As a manager, the best thing you can do to support your employees is lead with transparent messaging, clear communication, and—most importantly—plenty of empathy.
To protect your employees’ mental health during uncertain times, be transparent and focus on ways you can support them. Whether you know your company is planning to implement a hiring freeze, suspect one may be coming down the pipeline, or simply want to reassure your team in the current climate, we’ll help you understand what steps to take to support your team.
A hiring freeze is when a company pauses hiring non-essential employees for new positions. Hiring freezes can vary in breadth—for example, a hiring freeze may stop all hiring across the company or just on specific teams. Typically, companies implement hiring freezes when they’re under financial stress or when external factors strain performance.
Companies implement hiring freezes for many reasons—and they don’t always have to do with the company’s financial standing. Sometimes, companies use hiring freezes to safeguard against outside factors, like market uncertainty.
Common reasons a company might implement a hiring freeze include:
Macroeconomic factors that could impact the company’s revenue and profitability, such as changes in market conditions or projected economic slowdowns.
External global factors that could impact the company’s profitability, such as a global recession.
Financial concerns within the company, like liquidity or budget concerns.
The good news? Hiring freezes aren’t layoffs, and companies typically implement them when they want to keep current employees protected from whatever conditions made the hiring pause necessary. And while hiring freezes aren’t guaranteed to prevent layoffs, they are a good sign your company is being conscious and responding proactively to changing conditions.
It’s difficult to exist—let alone work and be productive—in uncertain times. Whether it’s a global crisis or market fluctuation, uncertainty can cause anxiety and hinder our ability to perform.
Hiring freezes don’t always mean a company is in financial trouble; sometimes, the organization is simply responding to outside factors. But since hiring freezes do sometimes reflect that a company has financial concerns, they can increase employee stress and decrease morale, potentially leading to higher turnover or lower productivity.
Poorly handled hiring freezes can have negative consequences on your workforce, including:
Employee confusion and uncertainty caused by a lack of transparency or understanding around why the hiring freeze was implemented.
Decreased employee morale due to fear around impending layoffs or the company’s financial position.
Increased workload for existing employees, as work is redistributed to compensate for the lack of new hires. Ultimately, this can lead to burnout.
Higher turnover rate among talent, as employees choose to leave out of concern for the company’s standing.
But the potential effects of a hiring freeze aren’t all bad. Hiring freezes can also give you time to re-evaluate your overall business strategy and give existing employees growth opportunities. When implemented correctly, a hiring freeze can potentially allow you to:
Restore financial stability without laying off existing employees.
Re-evaluate business and growth strategies to better align with current market conditions and trends.
Provide leadership and stretch opportunities to current team members.
More effectively manage cash flow to budget for current team and business opportunities.
If your company implements a hiring freeze, it’s important to keep a few things in mind. Communicating clearly with your team, offering support, and ensuring the freeze doesn’t cause overwork for existing employees will help protect employee morale and reduce the negative effects outlined above.
Follow these four steps to support your team during a hiring freeze:
How you communicate a hiring freeze to your team is crucial. Leading with empathy and being upfront about what led to the decision to implement the freeze will help reassure your team and reduce any misunderstandings. Give your employees context when possible, such as how and when the freeze will go into effect and what your company plans to do to reduce the impact on current employees. They’ll feel better having all the information, and you can feel confident everyone is on the same page.
It’s okay if you don’t have all the answers, especially since you may not have been involved in the decision-making or implementation process. In fact, you may still be processing the information yourself. If that’s the case, share that with your team and let them know you’ll navigate the uncertainty together. Acting as an open support system is the most important thing you can do.
Here’s how to be transparent when communicating a hiring freeze:
Outline your decision-making process for the existing team, including how the company decided to pause hiring.
Share the hiring freeze timeline with employees, if possible.
Be upfront about how the hiring freeze will impact goals, including individual and company-wide initiatives.
Set up different ways for team members to provide feedback, such as anonymous feedback forms and 1:1 meetings.
Keep your employees updated with all-hand meetings, company-wide updates, and “ask me anything” sessions.
A common concern among employees during a hiring freeze is that resourcing constraints will lead to additional work, causing employee burnout and overwork. Readjusting your company and team goals is the first step to ensuring this doesn’t happen.
Shifting goals might sound alarming, but it’s actually a necessary exercise to help your company—and your employees—thrive in uncertain times. Adjusting and sharpening goals to align with high-impact work ensures what your team produces is relevant and useful. Plus, it makes the team workload more manageable by setting stakeholder expectations and insulating your team from additional strain.
Begin by looking at your company- and team-wide goals. Ask yourself: what can you get done with the team you have in place? What needs to be shifted based on changes caused by the hiring freeze? What goals impact the company the most, and what can you defer?
It’s important to be realistic when adjusting goals in response to a hiring freeze. Additional ways to re-scope or de-scope business goals include:
Focus on strategy adjustments and reprioritizations that will drive the most impact for the company.
Align priorities with long-term business objectives to set your company and team up for continued success.
Review individual, quarterly, and annual goals to see what’s no longer feasible given resource constraints.
Soften or push back long-term company goals in favor of more critical, immediate goals.
Shift, defer, or change goals to re-align with current market conditions.
Take an individualized approach to resetting goals, such as adjusting goals based on department, output, budget, and impact.
Adjust individual goals to focus on value-adds, professional development, or relationship-building to keep employees motivated.
During a hiring freeze, it can be tempting to scale back on employee development and engagement efforts, especially if financial concerns caused the hiring pause. But employee engagement is critical, especially during uncertain times.
Employee engagement and development don’t have to cut into your budget. Low-cost ways to keep current employees engaged during a hiring freeze include:
Prioritize high-impact work to keep employees motivated and ensure your company continues producing.
Encourage your team to set professional goals to help them stay excited about the future without impacting the company’s bottom line, such as learning a new skill or tool.
Offer the chance to work cross-functionally with other teams as you readjust goals.
Recognize and reward hard work through employee appreciation programs, company-wide shout-outs, individual emails, and 1:1s.
Offer opportunities for your employees to make a difference by welcoming creative, innovative ideas.
Organize low-cost team activities, like potluck team lunches, volunteering opportunities, coffee walks, or team-building games.
Encourage professional growth by setting up coaching opportunities or mentor programs.
Promote a culture of learning with company events like show and tells or lunch and learns.
Allow for flexible schedules where possible, such as remote work or hybrid work schedules. Research shows that workers often concentrate better at home, and the flexibility of remote work can help improve work-life balance.
It’s not uncommon for hiring freezes to impact employee morale or increase fear and uncertainty among your workforce. And that’s okay—change and unpredictability are hard, in work and in life. As a team leader, you might feel uncertain and anxious too. But it’s also your responsibility to monitor your team’s overall happiness and mental health, especially during trying times.
In addition to being transparent with your team during the hiring freeze, continually check in to see where you can provide assistance. You can also:
Offer wellness benefits, like mental health days and wellness programs.
Encourage employees to take time off to rest, recharge, and disconnect.
Regularly check in with employees during 1:1 meetings to gauge their concerns and receive feedback.
Lead by example by taking time off and sticking to working hours.
Be conscious of redistributing work and where overwork might occur due to diminished resources.
Delegate or remove tasks from employees to prevent overwork and burnout.
Point employees to HR if they need additional help with their mental health.
Working through a hiring freeze is never easy, and it’s natural to be concerned about unintended consequences like employee anxiety and burnout. But hiring freezes also offer opportunities to focus on your current team and realign your business strategy. If you stay transparent and focus on ways to prioritize employee engagement and mental health, you and your team can emerge stronger than ever.
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