Business Pros and Cons of Furloughing Employees

Thinking about furloughing rather than laying off your employees? It’s an all-too-common conundrum right now, amidst the coronavirus pandemic shutdown. But, it’s something that a large majority of businesses must consider, given the present and quite uncertain circumstances. Read on to learn more about the upsides and downsides of furloughing your employees.

Employee Furlough Disadvantages

We’ll begin with the most problematic cons of furloughing team members. Doing so puts your company at-risk for permanently losing your top talent. Furloughs also undermine employee morale and may even damage it further, and if you have applied for the SBA Paycheck Protection Program, one of the conditions for the loan to be forgiven, is that you keep your employees on your payroll.

An employee furlough is a mandatory suspension from work without pay. It can be as brief or as long as the employer wants. Furloughs can take place in both public and private institutions. An organization will furlough employees as a cost-saving measure when it doesn’t want to lay off staff but lacks the resources to continue paying them. —The Street.com

Then, there’s the trouble of re-opening your business. Even after a short-term period, it takes a substantial amount of time to get things back up and running. Additionally, the cost savings might not be as significant as you might believe because it’s for a short time frame and not necessarily long enough to be worthwhile (though it can certainly prove helpful).

Employee Furlough Advantages

Since furloughs are happening in many industries right now, the temporary change can’t be all bad. There are advantages to furloughing employees, like the following:

  • Avoids layoffs. The most obvious upside to going with furloughs instead of laying people off is that you avoid the latter. In other words, you aren’t terminating team members. Instead, you’re temporarily removing them from the business without pay.
  • Reduces rehiring. Another benefit of furloughs is the fact that you won’t have to go through the trouble of rebuilding your workforce from scratch. Rather, you can just reassemble your team, either one-by-one or in small groups.
  • Saves compensation costs. Of course, when you furlough employees, you don’t pay their wages or salaries. Since labor is most typically the largest business expense, this can really help your company financially. (Though, you may still opt to furnish them with benefits during their furlough period.)
  • It allows you to better plan. Yet another benefit of furloughing instead of firing employees is that you can formulate a more workable plan during that time. The longer it goes on, the better grasp you’ll have of what to keep and what to jettison. To put it another way, you can use the opportunity to streamline things in order to make your business more productive and more profitable.

What other business pros and cons of furloughs would include? Please comment and share your thoughts and experiences!

Interested in learning more about business? Then just visit Waters Business Consulting Group.

Like this article?

Share on Facebook
Share on Twitter
Share on Linkdin
Share on Pinterest

Related Posts

4 Foolproof Ways to Write Better Emails

If you’re in business, regardless of your role, you need to know how to write good email. Let’s face it, email isn’t going away any time soon. We use it on a daily basis. And, it’s a great way to communicate on-the-fly. It also helps make organization easier. This technology is an effective one — if you use it right. The trouble is, too many people just don’t write good email. But, don’t worry, it’s super-easy to improve by leaps-and-bounds. In Business, Electronic Communication is Key There’s no getting around the fact that email is a critical business tool. It can easily be used for more than just day-to-day communication. After all, like social media, it’s also a powerful marketing tool. That’s why there is a bazillion email newsletter templates floating out there in cyberspace. Make no mistake about it, communication is key in business and email should make it all the more easy. The ubiquity of e-mail means that everyone in business, from lords of finance to programmers who dream in code, needs to write intelligently. By using simple, clear, precise language, and following a few other basic writing rules, you can become a better communicator and improve the prospects for your career. —Forbes.com The problem is, far too many people just don’t use it in the most practical manner. Now, that doesn’t mean every single message needs to actually be a work of art. But, it does mean, the more you make a habit of some good practices, the better you’ll become over time. 4 Foolproof Ways to Write Better Emails We all like the notion of “inbox zero.” That place where we’ve gone through every message and taken the appropriate actions. But, with so much, it’s often difficult to get to every single message. And, it’s even more difficult to write in a way that makes the most out of the medium. So, here are four foolproof ways to write better emails: Keep it short. There’s no need to go into painstaking detail. The longer the message, the less effective it becomes. You need to deliver your message in a quick manner so it doesn’t waste the recipient’s precious time. Always be direct. Limit the adverbs and adjectives. Keep them to a minimum because the more “flowery” the wording, the less clear (or boring) it is to the reader. Now, you can explain but be direct. Army service members call this strategy “BLUF”, which simply means “bottom-line, upfront.” Reread your message. Never hit “Send” without re-reading your message — at least twice. Don’t rush through it. Take advantage of the spell check and ask yourself if it gets your meaning across. Add the recipient(s) last. When you compose a message, be sure to leave the recipient field blank. And, don’t add his or her email address until you’ve written it entirely, and reviewed it twice. This way, you’ll avoid sending it out accidentally with errors (or without being clear). What other suggestions do you have for writing good email messages? Please, share your thoughts and experiences by commenting! Interested in learning more about business? Then just visit Waters Business Consulting Group.

Read More »

Imagine Selling Your Business…

How Would Your Life Change?

You didn’t start your business just to stay busy—you built it to create freedom, security, and options for yourself and your family. Selling your business can be life-changing, but the real question is whether you’re intentionally building toward that outcome or simply leaving it to chance.

Sign up below for a free consultative session to learn what your business could be worth today and in the future! 

Thank you for your interest in learning what your business is worth. We will be in touch shortly.