Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Hiring Freeze

What it is:

A hiring freeze is a temporary cessation in hiring new employees.

How it works (Example):

Let's say Company XYZ is running out of cash and needs to conserve in every way it can. To avoid laying off employees, it institutes a hiring freeze, meaning that any open positions at the company will remain unfilled until further notice.

Why it Matters:

Hiring freezes are methods of conserving cash and are almost always a reflection of financial issues within a company. They can strain morale, however, because employees may have been counting on hiring new employees to relieve backlogs, overloads or skills shortages.