Wage Freezes: Don’t Freeze Up When Breaking the News

Wage freezes aren’t uncommon in most organizations; however, delivering the news isn’t fun for leadership and HR teams. If your organization is gearing up to implement a wage freeze, you may be looking for tips on communicating the news effectively and compassionately with employees.

Here’s how to be prepared when breaking the news to employees, ensuring your leadership team doesn’t freeze up.

Refresher: What Is a Wage Freeze?

A wage freeze is a common practice where a company will “freeze” and suspend employee salary and wage increases. Wage freezes usually occur for a set period—a few months, one or two quarters, or sometimes a whole calendar year.

While unfavorable to employees, wage freezes are often implemented to protect the organization. Freezes are usually enforced during times of financial hardship or economic recessions, allowing the organization to come out on the other side financially stronger. Not to mention, wage freezes can help organizations avoid unwanted layoffs.

Tips to Effectively Communicate a Wage Freeze

When entering a challenging conversation, it’s crucial to involve leadership from the beginning. Take the time to decide as a leadership team who will speak on behalf of the organization, what exactly will be said, and how you best plan to present the news to employees.

When breaking news that can be potentially taxing to your employees, it’s important to always lead with compassion. A wage freeze could be disappointing and discouraging, so it’s essential to let your employees know your organization recognizes that.

To help minimize anxiety, be sure to include all the details about why and how your organization made this decision. Be forthcoming and transparent regarding how long the wage freeze will be, what the employees can expect, and ultimately how this decision will impact the organization in the long run. The more information employees have from the beginning, the less room for misconstruing information going around the workplace.

If your organization plans to announce the news with a live meeting, leave a generous amount of time for questions. With unexpected news, it’s fair to assume there may be questions from employees. Allow enough time for everyone to get their questions in and to answer them thoroughly. If your organization plans to send out an internal release of the wage freeze, provide adequate resources where employees can direct any questions they have.

And last but not least, make sure your organization puts the wage freeze and all the fine details into writing. If your organization plans to send out an internal note on the matter, be sure also to upload it where you store compliance documentation. BerniePortal’s Compliance feature is a great place to host compliance documents where they are easily accessible for employees to refer back to the details when needed.

Additional Resources

You can stay informed, educated, and up-to-date with important HR topics using BerniePortal’s comprehensive resources:

BerniePortal Blog—a one-stop-shop for HR industry news
HR Glossary—featuring the most common HR terms, acronyms, and compliance
HR Guides—essential pillars, covering an extensive list of comprehensive HR topics
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HR Party of One—our popular YouTube series and podcast, covering emerging HR trends and enduring HR topics