Rethinking Furloughs

What’s the right balance?

While Covid-19 related furloughs and unemployment numbers continue to rise (26 million in the last five weeks), I’ve been thinking about better ways to handle furloughs to reduce the financial strains on people and their ability to maintain necessities in life such as housing and food. 

As we all continue to weigh monetary costs versus the health-safety of longer shelter in-place orders, we know strains on economic inputs will lead to more employment problems in the future:

  • Payroll based taxes support social security and unemployment benefits. How does the government continue to fund income to seniors and relief aid to the unemployed? 
  • State and local tax authorities will start to feel the effect of the furloughs as more people are at home and spending less in the economy. Could this lead to a second wave of furloughs and layoffs for government agencies?
  • Covid-19 will be a threat through the end of the year without a vaccine as medical professionals race towards creating a treatment. Just what is the right balance between immediate health safety versus the long term social and economic impact to individuals as they try to survive with little to no income? 

Consider this. 

Many companies say they have a core value of ‘respect for people’ while other companies use statements like ‘our people are our most important asset’. Certainly, companies don’t take the task of putting employees on furlough lightly. It’s emotional. It’s uncomfortable. It puts more strain on those still working to do more. Is the act of furloughing people during a downturn in company revenue congruent with the core value of respect for people? Or is it smart business to protect the safety and security of some employees to keep the business afloat during tough times? Just as you can tell what a person values by looking at their expenses for a month, so you can tell what a company values from their actions.

What if?

Could we lessen the economic strain on people, employers, and government by rotating furloughs among employees instead of picking some employees to go on unbounded furloughs? Think of it as furlough-sharing. 

Simple example: You have a workgroup of 6 employees. Instead of furloughing a single member, what if you all 6 members rotated a furlough for a pay-period?  This has the same net effect of cost reduction while creating a number of benefits.

Impact:

  1. If someone is furloughed indefinitely, it sends a contradictory message about people being the most important asset. If employees rotated a furlough for one pay period, it sends a message to employees they are valued and can work as a team to weather the storm. This is a great way to strengthen the culture and allow the team to fight together towards a common goal.  
  2. If someone is furloughed indefinitely, they will most likely apply for unemployment. If employees rotated a furlough for one pay period, they have a more reasonable chance of taking the financial hit and not filing unemployment. 
  3. If someone is furloughed indefinitely, they will most likely try to seek other employment. If employees rotated a furlough for one pay period, they would be less likely to look for other employment. 

It’s a simple idea I think many employees would rally-behind. It’s an idea with action better aligned to a core value of respect. It’s an idea to reduce economic pressure on local and state governments. There’s always a better way if we search for it. 

Onward and upward!

Photo credit: https://flic.kr/p/bYFYc9 – The ReThinking Many from Amir Patel via Creative Commons. – “Moses”​ by Nizzan Joel Avidor.