How employers can approach furloughs

The outbreak of the novel coronavirus COVID-19 has put many business owners in a difficult position. Small businesses have been hit especially hard by the economic fallout of the outbreak, prompting many business owners to make difficult decisions in regard to their staff.

Within roughly a month of the implementation of social distancing guidelines that forced businesses to change how they interact with their customers, millions of people in the United States and Canada found themselves out of work. Some were laid off, while others were furloughed. Many small business owners opted to furlough their staffs, which may have confused employees who did not even know what a furlough was prior to the outbreak. Each company can adopt its own furlough strategy, but the Society for Human Resource Management defines a furlough as an alternative to a layoff that requires employees to work fewer hours or to take a certain amount of unpaid time off.

Businesses may decide to furlough some workers and not others. That can prompt employees to speculate about why they were among the furloughed workers. Navigating that potential issue is just one challenge employers considering furloughing employees may have to confront. The following are some ways employers can handle furloughing employees.

• Decide if a furlough really is for you. The U.S. Chamber of Commerce notes that deciding if a layoff or a furlough is best for your business may be as simple as recognizing if the company needs to shut down entirely. Those that do may be best served laying off the staff, while those that can operate at reduced capacity should consider furloughs a legitimate option.

• Consider an on-off furlough plan. The U.S. COC notes that an on-off furlough plan can help small businesses save money while still ensuring their employees avoid going months on end without income.

• Emphasize that a furlough is not about performance. The Economic Policy Institute estimates that nearly 20 million workers will be laid off or furloughed by July. That’s a sobering statistic, but it highlights that furloughs are not due to underperformance but rather economics. Employers should emphasize that to staff when announcing furloughs. Employees appreciate honesty from their employers, so employers may even want to share specifics about the economic impact of the outbreak to illustrate just how necessary the furlough is.

• Figure out benefits before announcing furloughs. In addition to loss of income, employees will be concerned about potentially losing their benefits. Many employers have been able to furlough employees while still providing them with medical benefits. When announcing furloughs, be specific in regard to employees’ benefits. This is especially important in regard to medical insurance and how having it can ease concerns about contracting the COVID-19 virus.

• Keep in touch with furloughed employees. While furloughed employees who are not working at all should not be allowed to use work-related email accounts or phones or have contact with clients, the U.S. COC recommends employers make an effort to stay in touch and provide emotional support to such staff members. Something as simple as a weekly email asking employees how they’re doing can go a long way toward ensuring staff that they have not been forgotten.

No employer wants to furlough employees, but it’s a decision many have had to make in the wake of the COVID-19 outbreak. Employers who must furlough employees can make the process less difficult in various ways.

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