Keep Employee Experience Top of Mind During a Hiring Freeze
After years of bullish hiring, big tech companies are reversing course, with back-to-back announcements of layoffs and hiring freezes. Twitter, Google, Microsoft, Meta, Apple, Amazon, Yahoo, Zoom, Salesforce and PayPal are all among big tech names to have slashed their workforces.
Yet, Glassdoor’s latest ranking of best places to work, published in January, still has Google, Microsoft and LinkedIn sitting among its top 20 list.
So, how do they do it? What should companies do when faced against the harsh reality of layoffs and hiring freezes to preserve their culture, appeal and competitiveness?
Understanding the Reason Behind a Hiring Freeze
There can be numerous reasons for instituting hiring freezes in a company.
"A hiring freeze can be a strategic decision made by businesses for a variety of reasons, including financial constraints, the need to re-evaluate current staffing levels or a shift in business priorities," explained Rodrigo Barraza, HR director of the Ninja Tropic eLearning.
While they often become necessary when a business is struggling with declining profitability or fearing an economic recession, they can also occur in times of growth.
"Even if profits are strong, some businesses may implement hiring freezes if they want to avoid growing too rapidly and focus on their existing employees," said Jill Chapman, director of early talent programs at Insperity.
Today, it's a bit of both. Most companies conducting hiring freezes these days are doing so because of economic conditions — from recession fears to rapidly growing wages to lack of labor availability —but they also come on the heel of record growth that, some say, was unsustainable.
So, a hiring freeze in itself isn't necessarily a sign of pending catastrophe. In fact, Chapman said, companies that pause hiring for a short period have a high chance of coming out of the freeze stronger, especially if they’ve invested in their current team through the process.
The question, then, becomes, not so much why implement a freeze but rather, how to do it right.
Related Article: Survivor's Guilt and Other Ways Layoffs Impact the Employees Left Behind
Growing Through a Hiring Freeze
There's an interesting connotation to the word growth. Most people in business jump to think of profits, revenues, market share — those financial and measurable metrics.
But growth is so much more than that. It includes improving processes, gaining efficiencies, developing future skill sets, strengthening culture, streamline the offering. All of those factors, while they may not be immediately reflected on the bottom line, will pay off at a later date.
Investing in people, in teams that remain in place after layoffs and during freezes is a big part of that.
According to Barraza, companies should make sure they continue to invest in their workforce despite the pause in recruitment. Not bringing on new team members doesn't mean forgetting about those who are still around. Developing new skills, restructuring processes and roles, and creating a continuous learning and improvement culture are all critical strategies for doing more with less.
Additionally, with internal development and commitment to developing existing talents, companies can improve morale and retention, thus preventing unnecessary turnover during difficult times. A recruitment freeze, Chapman said, is a fantastic opportunity to look into existing talents within the business, seek gaps and develop the right strategy to rebound.
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Staying Talent-Focused in Challenging Times
Companies that can sustain layoffs and hiring freezes and still come out with an untarnished reputation have one thing in common: they do not forget that people are their greatest asset. And for that reason, they treat them right and help them overcome the challenges at hand.
Business leaders and HR teams going through difficult times must not lose their focus on the employee experience, Chapman said. During a hiring freeze, some staff can feel the strain. After all, it is likely that more work is going to be required of those who remain.
Bryan Driscoll, former director of HR at ISGF and labor law consultant, suggests investing in employee wellbeing initiatives, providing mental health support and offering flexible working options. If employees feel overwhelmed by the extra amount of work, he said, they might feel more inclined to leave the business.
Managers play an important role in that process. With better coaching skills and increased awareness and engagement, they can help staff navigate through the hardship and preserve a healthy culture.
The problem, Adria Solutions Owner David Berwick said, is lack of transparency. Managers don't always share why the company is on a recruitment freeze, and this can cause mistrust between leaders and staff.
He suggests being honest and open with employees, keeping them informed of how the situation is progressing, and keeping an open mind and dialogue; some employees may have ideas to help the company still achieve its goals.
Part of this also entails being receptive to adapting processes. Amy Spurling, founder & CEO of Compt, said companies that can't hire new employees may want to consider consolidated tools and equipment that can lighten the workload and help reduce the risk of burnout.
Related Article: There's More Than One Way to Reduce Headcount
When Does It End?
There is agreement that if companies are to benefit from a hiring freeze, it must be done somewhat quickly.
In Berwick's experience, smaller, more agile businesses are often the first to come out of a hiring freeze. They tend to actively look for ways to get the business going again, being proactive rather than reactive, adopting best practices and testing new avenues.
Barraza said businesses should always be looking for signs that they can stop the freeze and start growing the team again. Some of those signs include a growing backlog of work, clients requesting more work and a need for new skills to maintain growth and production.
A hiring freeze that lasts too long can damage the business long term. While doing more with less is a great strategy, it shouldn't come at the expense of employees.
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