What is a Hiring Freeze?

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

How Does a Hiring Freeze Work?

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 Does a Hiring Freeze Matter?

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

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Paul Tracy
Paul Tracy

Paul has been a respected figure in the financial markets for more than two decades. Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 3 million monthly readers.

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