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Do You Need to Furlough Employees?

Blog #238

The word ‘furlough’ has traditionally been used for government employees or military folks. The word is defined as “a temporary leave of absence with expectations of returning to a position.”

As I do the many emergency sessions with my teams, I regularly bring up the topic of layoffs – we would be careless as leaders of organizations to not talk about them. To be clear, I am guessing that most leaders do not like to lay people off. What a large company deems as necessary and painless for the employees they are laying off differs greatly from what a small, local business must implement. I believe the reason for this difference is the familiarity with each individual of the company. Small business leaders work alongside their employees on a daily basis, making layoffs more personal and difficult.

Here is an example. Let’s say a large corporation with offices located around the country needs to furlough employees during a tough time, such as an economic recession. While sitting in the corporate offices 1,000 miles away, the senior leaders learn about the challenges at hand, make the tough call, and tell the local office managers, “You need to cut 25 people until we get out of this mess.” This is hard, no doubt, but the people making the ultimate decision are 1,000 miles away. They know it will have an impact, yet they do not actually know the individuals it will impact. There is a disconnect.

When a local, small business endures the challenges of an economic recession, they should also consider furloughing some employees. This is probably much more complicated, as the leaders personally know the individuals who will be impacted. In some cases, members of an entire family are laid off, leaving the weight of this stress to rest on the leader’s shoulders. They must calculate how much capital they have and how long can they keep everyone employed before going broke. It is a stressful situation.

I appreciate the sentiment, but in business, hard decisions must be made for the company to survive. If you love your team, the most important thing you can do is ensure that the business succeeds and that the employees have a job to return to after the furlough period – meaning, there must still be a company at which they can work.

Now, I am not proposing to simply let people go and wish them good luck; it is quite the opposite. I think the more you can show your intention of helping during times like these, the better. You need to investigate what kinds of resources are available to ease their financial burden, consider what the government is offering, and try to help these individuals navigate the process of applying for assistance. I am encouraging my teams to talk with their accountants to get a clearer understanding of how their employees can gain assistance when needed. As an employer, it is important to know the ramifications, as well as what you can and cannot do when providing direction.

Remember, it all comes down to the intention. If your employees feel you are doing your best to help them navigate the current challenges and plan for a future where they can return and thrive, I believe they will be supportive and understanding of the situation.

Once you have done this, review how you (as an organization or as an individual) can help support these folks during a tough time. For instance, one of my clients is a business owner who knows several cattle producers. He has already planned that, if needed, he will have a couple cows processed then he will drive to each of his employees’ homes to give them 30 pounds of meat. What a great idea! It may not pay the rent or mortgage, but it certainly helps put food on the table.

To tie this up, I am encouraging my teams to take advantage of this slow, uncertain time by reviewing tasks they can complete. Look at any training, cleaning, reorganizing, retooling, etc. that needs to happen. If you find that the tasks are completed and your team has nothing to do, it may be best to furlough some employees.

Even though we do not know where this is going and what opportunities lie around the corner, it is our obligation as leaders to examine all options for our businesses, as well as to speak with our accountants and our teams. It is important to ensure your team members will have a place to return to in six months. The intention is what matters…and it is in challenging times like this where difficult decisions matter.

Is your organization struggling with navigating these uncertain waters? Are you faced with the decision to furlough employees? We can help with that! Reach out to us today to learn more.

Keep Smiling,

Kris

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