Advantages of Furloughs
- The employer avoids layoffs for a period of time so employees have jobs.
- The employer saves compensation costs.
Disadvantages of Furloughs
- You are disadvantaging your best employees, the top performers you really need to rebuild your business, following the downturn.
- Employers save money, but not as much as they think they will, because so many of an employer’s costs for benefits continue during furloughs.
- The amount of work remains constant which makes returning workers feel overloaded and may affect the quality of their performance and products.
- Customers may be unhappy talking to a variety of people rather than their usual contact, or because they are waiting longer for service.
- The internal culture and relationships are often injured. Teamwork is affected by the loss of coworkers who are not at work. Projects take longer to move forward.
- Employees experience stress from work expectations and fear that the furloughs will not solve the problems and that layoffs will come next. Gossip increases and work productivity decreases.
- Given less time at work, more time catching up incomplete work, and workload increases because of missing coworkers, innovation and continuous improvement fall by the wayside.
- You best employees may start job searching. All employees think about updating their resumes.
While the disadvantages appear to outweigh the advantages of furloughs, a cash-strapped business or organization, after weighing alternatives, may find furloughs appealing.