A situation whereas an employer has temporarily put into place that no further new hirings will occur for the foreseeable future. This type of cost-saving effort is put into place as a result of budgetary concerns, and to capitalize upon existing production capacity.

A hiring freeze can put a strain on existing employees, as there might not be any replacements for individuals that leave the company (ie. retirement, maternity leave or regular turnover). If the situation gets too extreme, overall performance may suffer and the company will need to make exceptions to the hiring freeze.