Are Corporate Salary and Hiring Freezes Really Freezes?

                                          

I was interviewing a candidate who had not had a raise in over three years.  She was looking because there was a salary freeze.  Her human resources department had instituted the freeze saying it was dictated by the holding company; along with the salary freeze was a hiring freeze.  My candidate’s comment to me was. “the freeze is only when it suits them.  Every time someone threatens to leave, they get a raise [bad form, see my article fromAdweek on counter offers], and every week I see people here at work who were not here the week before.”

Her comment reflected what every employee knows about these freezes.  They are really counter-productive.  What was once a smart business tool has, over time, become abused.

My own belief is that most freezes are artificial for exactly what my candidate said.  A wage freeze should mean that even if you get a new job, that they cannot counter or give more money.  That’s a wage freeze.  And a hiring freeze should mean that even if someone essential on the business should leave, they are not immediately replaced.

I often wonder to myself if those freezes aren’t purely artificial.  They make it easy for a company not to give a normal salary increase when due.  They stifle growth. And they are an excuse for companies to keep financial ratios in line without having to do deep analysis to see if other costs can be cut or curtailed.  Now we all know that if a fee based client (aren’t they all?) wants to add to staff that it will happen regardless of the holding company, and, whether or not their fee is increased to accommodate the new hire.

Freezes are demoralizing.  They force otherwise loyal employees to look for new work.  This is especially true when workers know that their account or their agency is actually doing well.  It hurts doubly when they find out that top management is getting bonuses during these freezes.  Word of those things always leaks out.

I do know about one really good wage freeze.

Years ago at the old Kenyon & Eckhardt agency (merged into Bozell and then remerged into various IPG agencies), there was what I want to call a true freeze.  It lasted about four months, as I recall.  At the end of the four months, everyone who was due for a salary review and increase, was given their review and raise – retroactively to when it was due.  It was a true wage freeze that allowed the agency to get through a difficult period.  It was actually good for morale.  And it made everyone feel good about the agency and its integrity. 

Unfortunately, it doesn’t happen like that anymore.