You’re working for a company that is under financial pressure. Perhaps a global pandemic threw uncertainty into future orders. Maybe an economic downturn is squeezing buyers and they are, in turn, cutting orders for your products.
The C-level executives need to act quickly to be seen responding to market conditions or risk being punished by shareholders. They quickly implement an absolutely terrible policy: The Hiring Freeze.
Why is this such a bad decision? Bottom line, a hiring freeze delivers short-term benefits at the cost of mid-term and long-term pain.
A Case Study, With Advice
Imagine that you are managing a team of seven people. You’ve been proactive and “managed out” an underperformer with the expectation that you would be able to hire a strong replacement. Unfortunately, another member of your team has also just resigned after receiving an offer with 25% higher pay.
You have job posts live and good candidates are applying. Your team isn’t loving the workload but they see the quality of candidates interviewing and step up to keep projects moving forward.
But you’re still down two colleagues – or put another way, down 29% versus the full staffing level.
Suddenly, the execs announce a hiring freeze.
The Best People Head for the Exit
During normal times, atrophy is a factor in many teams. Staff suspect that they could make more money elsewhere. But they enjoy working with their group of colleagues. And they know the irritations in this company and have adapted to them.
But now we’ve motivated them to update their resume (CV) and get out on the job market. The best people quickly find new jobs with better pay. Even worse, they will tell their colleagues and spur them to get on the market.
In contrast, the weakest team members hunker down and milk the job. They know you won’t push them out because you can’t hire a replacement. They may not be superstars, but they know that someone producing at 50% is better than no one producing at 0%.
How Do You Manage Through a Hiring Freeze?
Don’t fight the decision on day one. The company is in crisis and you shouldn’t add to that crisis. Be proactive and take action. Here are some options:
Option #1: Work More Hours, Continue to Deliver
The first option – and the worst option – is to ask your team to put in more hours and continue to get all the work done. You will not only burn out your colleagues, you will also destroy any trust you’ve built as a leader.
Option #2a: Halt Lower-Priority Projects But Deliver Executive Priorities
Given your team is 29% understaffed, cut 29% of the total workload.
Stack rank projects based on benefit to the company. A natural instinct is to pause all those under-the-radar projects that are important in the mid and long-term but whose effects are not immediately visible to executives. This is a mistake.
Senior executives will know that almost a third of your team is gone and yet they see no impact. Don’t be surprised when they decide to cut another headcount or two from your team. I’ve seen it happen multiple times.
Option #2b: Trim Commitments, Including Executive Priorities
When reviewing your team’s commitments, quite often you’ll find an executive priority (or three) that were previously untouchable. Maybe the COO has a favorite sports team and wanted an executive suite. But customers aren’t that interested and it isn’t helping build relationships with key buyers.
If the benefits are low and you can defend your decision, make sure to add those sacred cows to the cut list.
Communicate to your bosses how you’ve “right-sized” the workload to the available crew and how the most valuable projects will continue. You’ve shown you are a good corporate citizen and you’ve indirectly shown the price to be paid for understaffing the team.
Finally, It’s Time to Rebuild
After enough time has passed, your job as a manager is to sell the value of additional hires. If execs approve one additional hire, they get quantifiable benefits A, B and C. Approve another hire and get X, Y, and Z. Don’t put the sacred cow on the top of that restart list.
I know it can be frustrating – if not outright soul-sucking – to have to justify your existence (again). But now is the time you prove your value to your staff. You didn’t burden them with extra work when times were hard and you argued for growth that will benefit their careers in times to come. They will remember your efforts – successful or not.
Yes! Love the part about not pushing all the sacrifices into secrecy. Thoughtful piece on a really tricky leadership challenge.
In regards to the frozen backfills – I thought that the 10% GE cut philosophy of old similarly punished people who were proactive about managing poor performers off their team early. Across the board cuts instead of thoughtful cuts demotivate better managers.