What Interest Rates Mean for Hiring Plans

Here’s a pattern showing up in a lot of hiring meetings lately: the role makes sense, the budget’s there on paper, and it still doesn’t get filled. The holdup usually isn’t the candidate pool. It’s the cost of borrowing money.

This article breaks down why that happens, where rates actually stand right now, and what to do about your own hiring plans so you’re not just waiting around for the Fed to make up its mind.

Why Interest Rates Touch Your Headcount Budget at All

Rates don’t touch payroll directly. They touch the cost of borrowing money, and a lot of hiring gets paid for with borrowed money.

Think about it this way: a company opens a new location, buys equipment, or builds up inventory, usually with a loan or a credit line. The people hired to run that new location are part of the same bet. So when borrowing gets more expensive, that new hire has to clear a higher bar before anyone signs off on it. The analyst role tied to an expansion project is, in a real sense, competing against the loan that’s funding the expansion.

That’s the real reason hiring usually slows down before layoffs start. You can pause a job posting this afternoon. You can’t un-sign a five-year lease.

Where Rates Actually Stand Right Now

A few months ago, most people assumed rates were heading down. That assumption just got shakier.

The Fed held its benchmark rate at 3.50%–3.75% on June 17 — the fourth meeting in a row without a change. That part wasn’t surprising. What was surprising: under new Chair Kevin Warsh, nine of the eighteen Fed officials now say they expect a rate hike before the year’s out, not a cut. Markets are already betting on a quarter-point increase by October. Blame inflation — it’s running hot again, partly because of energy prices tied to the conflict in the Middle East, and it’s still well above the Fed’s 2% target.

That’s a real shift. If you built your hiring plan assuming cheaper money was coming, you might want to revisit it.

Here’s the strange part, though: the labor market isn’t falling apart. It’s just gotten pickier.

• Employers added 172,000 jobs in May. Economists expected around 80,000. Unemployment stayed put at 4.3%.
• Job openings jumped to 7.6 million in April, the most since late 2024 — mostly in professional and business services.
• But actual hires went down. So did separations. Nobody’s getting fired, but nobody’s getting hired in a hurry either. Some economists call this “low-hire, low-fire.”
• Paychecks are growing slower, too. Wages were up 3.4% over the year in May, the slowest pace since 2021 — and with inflation running hotter than that, most workers are actually losing ground in real terms.

None of this says recession. It says employers are pickier about which bets they’re willing to fund.

Why Companies Freeze Hiring Before They Cut Staff

Here’s something most companies figure out the hard way: it’s usually cheaper to leave a job posting open than to lay someone off and rehire later.

Recruiters call this labor hoarding, which is a clunky name for a pretty human instinct. Your controller already knows your close process well. Your credit analyst already understands your loan book. Losing that knowledge costs you more than asking the rest of the team to pick up the slack for a while. So that’s usually what happens first.

In practice, this looks like fewer new requisitions, vacant seats sitting open longer than usual, and some full-time roles quietly turning into contract or interim positions instead. Roles that pay for themselves fast still get approved. Roles tied to “someday, maybe” projects get shelved.

If you’re a hiring manager in this spot, this is exactly when having a recruiting partner with a bench of vetted, ready-to-start candidates beats posting a job and hoping. Because once a role does get the green light, it usually needs to be filled yesterday.

Refinancing Is Quietly Doing a Lot of This Damage

Most hiring freezes don’t actually trace back to the Fed’s headline number. They trace back to a company’s own loan paperwork.

A lot of businesses borrowed money back when rates were low. Now those loans are coming due, and refinancing them costs a lot more than it used to. Same revenue, bigger debt payment — which means less cash left over for raises, training, or that new hire you wanted.

Banks aren’t making this easier. According to recent Fed survey data, banks have tightened lending standards on commercial loans across companies of pretty much every size, and demand for commercial real estate loans has stayed flat or weak. So now you’ve got two problems layered on top of each other: some companies genuinely can’t borrow as easily as they could a year ago, and others can borrow but are choosing not to until things settle down.

Worth remembering: a hiring freeze doesn’t always mean a company is struggling. Sometimes it just means there’s a refinancing date circled on someone’s calendar.

What This Means for Finance and Accounting Roles Specifically

Finance and accounting jobs sit in a weird spot in this cycle. They’re rarely the first roles cut, but they’re often the first roles delayed — because the work still has to get done, even when the budget for a new hire doesn’t.

A few things worth knowing if you’re hiring in this space right now:

Controllers and senior accountants tied to month-end close, audits, and compliance tend to stay protected. That work doesn’t pause just because rates went up. FP&A and analyst roles tied to growth projects are more likely to get put on hold, since those projects are the easiest thing to delay. Interim and fractional CFO placements have gotten a lot more common lately — companies want a sharp financial mind in the seat without committing to a full salary while rates stay this high. And if you’re working with a private equity portfolio company, you’ll feel rate pressure faster than most, since deal financing and add-on acquisitions are tied directly to how expensive money is.

This is exactly where a good recruiting partner earns their keep. When budgets are tight, a bad hire or a six-month vacancy in a critical finance seat costs more than it ever did before.

How to Build a Hiring Plan That Doesn’t Depend on Guessing Right

The companies handling this stretch well aren’t the ones trying to predict the Fed’s next move. They’re the ones who built a process that works no matter what the Fed does.

A few things worth doing now:

Tie new headcount requests to cash flow, not just workload — a role that pays for itself fast is an easier sell in any rate environment. Take a look at your debt maturity schedule and line it up against your hiring calendar, so a refinancing date doesn’t blindside your hiring plans. Separate your “we have to fill this” roles from your “it’d be nice” roles early, because compliance and audit-critical positions rarely get the luxury of staying open for long. Build relationships with recruiters before you actually need one — companies that do this fill critical roles faster when an opening does hit. And don’t dismiss interim placements as a fallback; a strong interim controller can keep things running while leadership waits for more clarity, without locking you into a long-term commitment during an uncertain stretch.

You don’t need to call the Fed’s next move correctly. You just need a hiring process that doesn’t fall apart no matter which way it goes.

Let’s Build a Hiring Strategy That Works No Matter What Rates Do Next

Rate uncertainty probably won’t clear up next quarter or the one after that. But your hiring plans don’t have to sit frozen until it does. Whether you need to fill a critical accounting role fast, build a bench of interim talent, or just want someone to tell you honestly whether a role is even worth opening right now, Burchard & Associates can help you figure it out.

Contact us today to learn how we can help with your hiring needs.