As Wall Street shrinks, widespread hiring freezes - although less visible than layoffs - may be affecting career prospects just as much.
That's the pattern taking shape on Main Street, according to a story in Thursday's Wall Street Journal.
From a candidate's standpoint, a hiring freeze can cut two ways. On the negative side, they obviously make it harder to switch employers. On the positive side, companies that freeze hiring may hold down the number of layoffs, or avoid them altogether. More important, they may create greater opportunities to transfer internally, since a department head might prefer to replace a departing employee with an internal candidate rather than simply let a position evaporate. So if you want to make a move but fear you'll be frozen out elsewhere, consider angling for an internal transfer - especially if your current employer also has a freeze on.
For instance: In the bombed-out real estate lending sector, banks are redeploying staff from residential to commercial mortgage finance, says recruiter Peter Arian of Analytic Recruiting. Commercial business is slowing, but less so than residential. Although a department head might want to bring in external candidates with commercial lending experience, Arian says current employees sometimes get the inside track for internal openings, thanks to corporate policies aimed at minimizing layoffs.
As of last November, mass layoffs were no more prevalent than a year earlier, according to Labor Department data cited in the Journal. But that doesn't mean employers are as confident as they were a year ago. Many are coping with uncertainty by curtailing new hiring, instead of chopping skilled workers they'd have to replace later when the economy improves. The story mentions firms including clothing retailer Chico's FAS, auto-parts supplier ArvinMeritor, and Delta Air Lines.
The nationwide unemployment rate jumped to 5.0 percent in December from 4.7 percent in November. Economists quoted in the Journal see the rate climbing to between 5.25 percent and 5.75 percent over the course of 2008. The article also observes that hiring budgets often get settled in January, so this is the month that many freezes are going into place.