How to Craft a Hiring Freeze Announcement (Template Included)

A hiring freeze is a great way for companies to reassess their long-term financial stability while eliminating increasing payroll costs in the present. Many companies put into place a hiring freeze when they are facing financial difficulties. This could be the result of budget cuts, industry disruptions, or even economic downturn.

In this article, we will explore how to prepare for a hiring freeze, including our hiring freeze announcement template, best practices for your own hiring freeze announcement email, the benefits and downsides of hiring freezes, and how to best utilize this effective cost-saving strategy for your organization.

A hiring freeze is a temporary halt in all hiring activity of an organization for a certain period of time. It can be implemented across the entire organization, or only in one particular department or part of the organization. The goal of a hiring freeze is to temporarily reduce ongoing payroll costs, and is often the first step a company takes when experiencing a financial downturn.

There are many different things to consider when thinking about implementing a hiring freeze. If a hiring freeze isn’t successful, many organizations will be forced to start eliminating payroll costs through additional methods, such as a voluntary or involuntary reduction event. So it’s important to understand the potential pros and cons of a hiring freeze, and how to determine if it’s the right strategy for your organization.

Once you decide to move forward with a hiring freeze, you then need to understand how best to put it into action. One of the first and most important steps is to craft a thorough and thoughtful hiring freeze announcement email to your employees.

Let’s start with an example hiring freeze announcement email to give you an idea of what your own announcement should entail. Below is a hiring freeze announcement template that you can copy and customize for your own organization.

Feel free to copy and customize this hiring freeze announcement template to craft your own announcement email. Of course, remember to review your hiring freeze announcement wording with your legal team before releasing internally to ensure that you comply with all local, state, and federal laws.

It’s also important to make sure you’ve considered all of your options and identified the most effective cost-saving strategies that will have the least impact on your employees and company brand. Click below to download our free reduction resources guide to implement the right cost reduction strategy for your organization.

Before we get into breaking down this hiring freeze announcement template, let’s talk a bit more about the key considerations when deciding if, when, and how to utilize a hiring freeze for your organization. There are differing opinions about whether hiring freezes are actually a good tool for companies experiencing financial downturn.

Some believe that hiring freezes may work as a short-term fix, but can actually cause more issues than they solve over the long term. They could lead to insufficient staffing, causing existing staff to be overworked and even more hiring needs to arise while the freeze is in place.

Hiring freezes can also create a negative work environment, similar to layoffs, that leads to lower employee morale and motivation, and possibly higher turnover rates of top performers. This could cause a delay in the launch to market of new products, not to mention lower productivity for the overall organization, resulting in less revenue coming in. This can be offset by understanding where to create exceptions to the hiring freeze for essential revenue-driving personnel.

However, there’s always the chance that, if the hiring freeze doesn’t sufficiently lower costs for the organization, a layoff or other reduction event might still be necessary. So understanding the impact of all the options in consideration, and the differences between each, is vital in making this decision.

There are some important distinctions to keep in mind when considering a hiring freeze versus other cost-cutting strategies such as layoffs or furloughs, or more permanent reductions in force (RIFs). These are all different paths an organization can take when experiencing a financial downturn, and can vary in their impact on employees and the bottom line.

Similar to more permanent reduction events, a hiring freeze could create a negative environment that impacts the organization for longer than its short-term duration. As we mentioned above, this could include reduced employee morale, lower productivity, and delayed production. Top performers could also see the hiring freeze as a bad sign and start looking to leave the organization.

Given this, many organizations considering a hiring freeze due to financial difficulties may opt to instead hold a voluntary layoff. This will allow employees who want to leave the organization the ability to do so, which could actually improve morale and thus productivity and revenue. They may also choose to take an even more temporary approach by reducing work hours, cutting pay, or canceling one year’s bonuses.

There are also comparatively positive aspects to hiring freezes to consider as well. A hiring freeze is generally received much better by employees and the public than a layoff event. If properly executed, it can also provide a shorter-term path to financial solvency, saving the company enough cash to quickly start recovering from a financial downturn.

Once you’ve reviewed all of the considerations, and decided that you want to go forward with a hiring freeze, it’s time to announce it to your organization. The most common way is to send out a hiring freeze announcement email to your staff, like the template above, that explains the hiring freeze and why it is occuring at your organization.

Let’s break down the above hiring freeze announcement template into its key components and what you’ll need to include as you craft your own hiring freeze announcement wording. There are a few elements that are essential to ensure your announcement is as thorough and thoughtful as possible. You’ll want to keep these in mind as you customize this template for your specific organization and situation.

Here are the key components you need to include in your hiring freeze announcement email:

• Date and addressee: It’s important to note who the recipient of the hiring freeze announcement is, as well as how and when they have received it. This should include a simple greeting, such as “Dear [insert name of employee].”
• Situation explanation: It’s important to provide some background for context to avoid any confusion. This means being honest about the financial situation of the organization, and steps that have been taken to assess and correct any issues before this hiring freeze.
• Reason for the hiring freeze: This should lead into the announcement of the hiring freeze, with an explanation of why this choice was taken. This also helps set the tone by explaining that it could be worse. Most employees will be more open to a hiring freeze if they understand the alternatives.
• Additional details: This includes any specifics about the hiring freeze, including how long it will last (if this is known), and if it will impact the whole or only part of the organization. If you are implementing a hiring freeze for only one area of your organization because you’re looking to phase out a product, or structurally change a department that has high turnover, you should communicate that to your staff in a way that doesn’t set off any alarm bells. Without providing this context, your staff may assume the worst.
• Hiring freeze exceptions: These additional details should also include information about how exceptions to the hiring freeze will be handled.
• Next steps and questions: Explain how the organization plans to monitor the effectiveness of the hiring freeze and share any additional information. This is also a good place to mention how staff can reach out with any questions they have regarding the hiring freeze.
• A thank you for their contributions: End the announcement on a positive note by acknowledging appreciation for the employee’s continued hard work and dedication to the organization.
• Simple sign-off: Then you can sign off with a simple signature from the CEO or other top executive.

It’s also a good idea to prepare an external version of your hiring freeze announcement to share with the press at the same time. The same goes for any external announcements to job applicants currently in your recruitment pipeline. These communications should explain that your organization is implementing a short-term hiring freeze to ensure its long-term financial success.

This will help you get out in front of it to control the narrative. Since there is a direct correlation between employer brand, retention, and recruitment, crafting this messaging should be given special attention. Work with your communication and PR teams to put it together, with guidance from your legal team to ensure compliance.

There are several ways to combat the common pitfall of reduced morale and productivity from a hiring freeze. Keeping your staff motivated and productive after they receive your hiring freeze announcement email is vital to the long-term health of your organization. Make sure that your managers are properly trained and these strategies are communicated well to the entire organization all throughout your hiring freeze to ensure its success.

• Keep your team calm: It’s normal for a hiring freeze announcement to cause staff to become stressed out. They will wonder if their job is secure in the long run, and worry about splitting up all the work left undone due to open positions on their team. Managers should listen to these fears and take measures to calm nerves. This doesn’t mean lying or making promises that you can’t keep. Just listening to them and communicating about the organization’s plans will help to ease this nervousness.
• Bring them into the vision: Executive leadership and HR should communicate the company’s vision and mission throughout this time. If employees have something bigger than themselves to buy into, then they’ll be better able to dig down deep and find a greater level of productivity to help turn the organization around.
• Give them recognition: HR should institute recognition programs to ensure that employees feel appreciated throughout the hiring freeze. This will increase productivity and deter their anxiety if employees are able to see how their individual contributions are achieving goals for the betterment of the organization.
• Communicate with greater transparency: Finally, there needs to be communication about the hiring freeze on an organizational level, not only on the team level from managers. All staff need to be informed about how the organization is doing against its goals, how long the hiring freeze will be, and if there will be any changes to the organization’s long-term strategy. This will also calm nerves and help employees to be more productive as they feel included in all communication and invested in the larger growth and goals of the organization.

There is plenty of content online about how to announce a hiring freeze, but very little information about how to evaluate the success of one. To ensure that your hiring freeze is successful, your organization should continuously monitor not only your financial performance, but also other metrics associated with the growth of your company.

Knowing what metrics to monitor depends on the reason for your hiring freeze. If your organization is using a hiring freeze as a financial band-aid while you prepare for a reduction event, it might not make sense to spend a ton of effort monitoring the following metrics. On the other hand, if you’re looking to use a hiring freeze as the main solution to your financial problems, then you will want to pay attention to the following metrics:

• Cash flow and increase in profit: These are standard metrics for measuring the financial health of an organization, so you will want to pay extra close attention to this data before, during, and after implementing your hiring freeze.
• Employee productivity and morale: The simplest way to measure this is to send out an employee engagement survey before your hiring freeze announcement email. After gathering the initial response, send out the survey again following the hiring freeze announcement in a set cadence to determine if your overall productivity and morale have improved or gotten worse throughout the hiring freeze.
• Employee turnover rate: This should be watched very closely to determine if the hiring freeze is causing your employees to leave the organization at a quicker rate than usual. You can then compare this data with your survey responses and any increase or decrease in profit to see if there is any causation or correlation.
• Employer brand survey: You can also use a survey to measure your employer brand in the communities where you work. Tools like SurveyMonkey have audience features that allow you to target certain demographics. For example, if your hiring freeze is implemented in Kansas City, Pittsburgh, and Philadelphia, you can survey people in those locations at a fairly reasonable cost. Send out the employer brand survey before your hiring freeze, in a regular cadence throughout the freeze, and afterwards to assess its impact on your brand in the community.
• Online employer brand: Finally, research your employer brand online. Create Google Alerts for your organization to monitor what is said about your organization online. Use a tool like Mention to see when your organization is talked about on social media platforms. You can also monitor your Glassdoor profile for any new reviews or changes to your company ratings.

There are a lot of important aspects to consider before making an official hiring freeze announcement, including whether a hiring freeze is the right cost-cutting strategy for you, or the only one you will need. As we’ve mentioned, a hiring freeze is commonly used by organizations in a financial downturn as a way to stop the hemorrhaging of money, often while they prepare for bigger reduction events. In this case, your organization should have a longer-term plan ready to implement after a hiring freeze to reduce payroll costs even further through a voluntary layoff or permanent reduction event.

If that feels too drastic for your organization, you could try reducing work hours, cutting pay, or canceling bonuses. You could also implement a furlough or unpaid sabbatical, which would allow your employees to leave for a predetermined amount of time and save you payroll costs in the short term.

There’s also the possibility that implementing a hiring freeze by itself, without any additional downsizing strategies, will be sufficient to remedy your company’s financial difficulties. If you decide to go this route, make sure that your workforce and overall organization are properly prepared with the right skills and strategy to ensure its success. This starts with crafting a thorough and thoughtful hiring freeze announcement email, which you can customize from the hiring freeze announcement template included above. This also includes being prepared to keep your team calm, informed, recognized, and fully invested in the organization’s mission and goals.

It’s also smart to have a plan for resuming hiring after the freeze at a normal headcount growth rate, making sure not to fall into a hiring frenzy that can cause poor talent decisions made in haste. This usually results from a fear that a hiring freeze will be needed again. So you’ll want to take precautions to prevent this, including conducting a full assessment of the causes for the financial downturn and the various metrics for monitoring the impact of the hiring freeze, which will help you devise a plan to avoid it repeating in the future.

If done properly, a hiring freeze can be a powerful and productive strategy for cutting costs and remedying your organization’s financial difficulties. At Careerminds, we believe that you can never be too prepared for your next cost reduction event. Our arsenal of resources, templates, guides, and industry-leading outplacement services can help you navigate the delicate process. Click below to speak with one of our experts and see if we are the right partner for your organization.

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Rebecca Ahn

Rebecca is a writer, editor, and business consultant with over 10 years of experience launching, managing, and coaching small to midsize companies on their business, marketing, and HR operations. She is a passionate people advocate who believes in building strong people, teams, and companies with empowering culture, content, and communication that facilitates meaningful results at every level and touchpoint. In her spare time, Rebecca is an avid traveler and nomad who also enjoys writing about travel safety and savvy. Learn more on her LinkedIn page.