10 Reasons Why A Hiring Freeze Hurts More Than Helps

The next time a hiring freeze is under consideration, consider the following 10 reasons why a hiring freeze hurts more than helps.

1. Losing Revenue. When critical revenue impact positions go unfilled, there is a lost opportunity to generate revenue every day that the positions remain vacant.
2. Limiting Product Development. Key vacancies in a product development team curtail new product development. Without new products, the company can’t significantly increase revenue after the freeze is over.
3. Limiting Expansion in Growing Business Units.
Rapid growth divisions and growing geographic regions are negatively impacted. The freeze limits their ability to continue to grow and threatens their competitive position.
4. Hurting Customer Service and Product Brand Image. Under-staffing means that other employees must do more work. This impacts service quality and may make customers feel that the company is slipping. The freeze negatively impacts product brand, online image, and future sales.
5. Damaging Business Processes. When a significant percentage of a process team leaves, a hiring freeze cripples that process and related interdependent processes.
6. Increasing Top Employee Turnover. A freeze reduces the chance for atop performer to get a promotion or a bonus which causes them to consider actively seeking new opportunities outside the company.
7. Retaining Dead Wood. Having to continually carry low performers leads to lower productivity overall, weakens management effectiveness, and frustrate stop performers.
8. Impacting New Technology Implementations. A hiring freeze limits the ability to attract new technologists to implement new technologies. This under-staffing slows technology implementation efforts.
9. Encouraging the Competition. Hiring freezes cause competitors to increase their efforts to recruit top employees and major customers away from the company.
10. Impacting Stock Prices. A freeze sends a message to analysts, customers, suppliers, and competitors that the company is not in growth mode or worse which hurts stock prices.

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