|
 |
Hiring Freeze May Be the Worst Way to
Control Costs During This Downturn |
|
 A
hiring freeze many not help your enterprise
in this recession
-
It makes it easy for manager to avoid
confronting low performers. Managers may
be reluctant to rid the firm of their
low-performing employees because they
fear they will not be able to re-fill
those positions.
-
When people leave the firm (during a
freeze) their position goes unfilled.
This means that other employees must now
do double duty because replacements
can't be hired. This causes frustration
and additional turnover. It may also
impact quality and send a message to the
customers that the company is not going
to survive the recession.
-
FTE (Full time Equivalent) employees are
often replaced with consultants, temps,
and other "off the book" spending.
-
Communicates to customers, suppliers,
analysts, potential applicants and
employees that our firm is not in a
growth mode. Pauses in recruiting sends
a stronger message that the company is
in trouble.
-
By freezing jobs in enterprise growth
areas you punish top-performing
divisions and impact their ability to
continue to grow and recover from the
downturn.
-
A large amount of a manager's time is
wasted "getting around" the freeze. It
can also give managers a bad taste for
hiring of any kind, which may result in
managers not devoting as much time to
hiring when the recovery takes place.
-
Top talent may become available during
the freeze and they may end up at a
competitor.
-
They give managers another chance to
"blame" HR or top management for poor
performance. Managers need to be given
the "freedom" to succeed (or fail)
through their own decision making.
-
It sends a message to your competitors
that you are weak. This may cause them
to increase their efforts to recruit
away your employees.
-
Freezes may cause employees to hesitate
before making referrals because a freeze
may keep their referrals from getting
hired.
A better way to is to educate managers about
the different options they have for cutting
costs and increasing revenues.
-
It is often better to do it through
budget control (controlling dollars),
rather than through a hiring freeze or
headcount tracking.
-
Managers should be encouraged to fire
low-performing employees' periodic
basis.
-
Managers need to develop plans to
transfer people from low return areas to
those with higher return.
-
Offer short-term incentives to employees
for increasing productivity or for
reducing costs.
-
If freezes are used, metrics should be
tracked to see if overall costs are
actually reduced by the freeze.
Read on .... |
