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Hiring freeze is a situation where the entity or employer stops hiring new candidates for a certain amount of time and usually to cut back on costs too.
This cost-cutting method becomes a result of financial distress like economic slowdown, recession or instances of overcapacity. And even large, successful companies prefer a pause in the recruitment process to maintain the financial stability.
Hiring freezes can take place at any time and in any organization. Even highly successful unicorns or struggling start-ups can face the tremble in their profit margins. With everything happening at once and no financial base, management might conclude that a hiring freeze is the best foot forward then.
Hiring freezes allows a company to hit the reset button on payroll expense growth. Implementation of a hiring freeze enables the restructuring of work groups to enhance efficiency.
A hiring freeze doesn’t mean recruitment has stopped forever. Companies can still fill vacancies that are in demand or key to their operations. A hiring freeze enables any entity to limit their costs without disrupting crucial functions like research and development, production, sales or marketing.