Furloughs are gaining in popularity as a way to cut business costs in a down economy.  What is furlough? It is a method to moderately reduce the weekly work time of most of your workforce. It can be a good alternative to laying off employees for numerous reasons:

1. If it doesn’t go too long, many employees like it. It gives them a forced break from work, something that most of us won’t allow ourselves to do. Obviously, for those employees working paycheck to paycheck it can really hurt, however most see it as a better alternative than being let go.

2. For those employees who like their job, It keeps the employee connected to the company and can be done in a way that may even keep benefits intact.

3. Done properly, it can lead to team building. Hard times can be a time to bond employees together.

4. In this economy, finding a new job for most employees does not happen overnight. For most employees, a shortened work week may be the best alternative out there for them.
 
THERE IS A DOWNSIDE; BE AWARE OF THE DANGERS

1. You may send some of your employees into a tailspin and productivity worsens. Communicate to those who seem more affected. Let them know your plans and when and how you can bring them back to full-time work.

2. It may send a message that the company is in trouble. To get beyond this, explain your strategy for survival in a way that gives them hope, assuming there is some.

3. Furloughs generally affect more people than layoffs do. Since more will be affected you run the risk that you may lose good employees who under a layoff would not have been affected. Some will start looking for other jobs and find one!

4. The other matter to handle is the salaried staff. The rules for furlough are more complicated for this group.  Feel free to give us a call to discuss how to handle the salaried group.

Every business goes through tough times and in this economy, most businesses are considering ways to handle their reduction in revenue. There are many ways to attack this problem.

“This information should not be construed as legal advice”