Tackling Layoffs & Furloughs – What You NEED to Know
After the long-anticipated outflow of employees during The Great Resignation at the year's onset, candidates across the industry board were relishing in the seemingly-endless employment options they had to choose from. But, as Summer 2022 has rolled around, a more unsettling trend is floating through with the heatwaves – mass layoffs.
Since May, tech startups have laid off nearly 27,000 workers, according to layoffs.fyi, which tracks publicly announced job cuts, while Tesla CEO Elon Musk, who said that he had a “super bad” feeling about the economy, said that the company would be cutting 10% of its workforce. It doesn’t stop there as layoff announcements continue to grow in industries such as cryptocurrency, travel, and consumer packaged goods.
You may find yourself in an unpleasant situation at your business during these times (although we hope that you don’t!). Deciding whether or not to lay off or furlough your employees is never a decision that should be made lightly, but we’re here to help you navigate these uncertain times.
The Difference Between a Lay Off & Furlough
When companies find themselves in uncertain times, they typically have two options – laying off their employees or placing them on a furlough. The difference?:
A Furlough will typically assume that the employee will return to work after the company has regained a solid footing. During a furlough, an employee will either have their hours reduced significantly, or may even be placed on unpaid leave for a set amount of time. Furlough leave can sometimes include access to any existing benefits.
A Layoff involves a company terminating the contract of an employee. Layoffs can happen for many reasons, but the typical issues surround financial stability or a lack of work for employees to complete. There can also be “temporary” layoffs, where an employer intends to rehire the same employees once they’ve improved their situation.
How to Tackle Layoffs & Furloughs the RIGHT Way
Now, you may be wondering how to actually go about enacting layoffs or furloughs in a delicate manner. Here’s how to make difficult decisions while ensuring you don’t leave your employees in the lurch:
Make sure you have a solid plan
There are many moving parts to laying off or furloughing employees beyond simply knowing you have to do it. Which positions or departments will need to be cut back or eliminated altogether? How will you deliver the news to the employees you need to let go of, even if only for a little while? Will there be a severance package or benefits available beyond their end date? These are all things you need to consider before you set your plan into action.
Handle conversations with care
Making the decision to let go of our furlough your employees will never be an easy one, and having to follow through with it is even harder, but remember that the employees seated in front of you (either in-person or over video call) are human beings that may be majorly affected by these changes. Make sure that your employees know this is not their fault and be honest when letting them know why this might be happening.
Provide support to your employees
Although this has not been an easy process for you or the company, it will be even harder for the employees to be let go or furloughed. Consider offering help or support as they transition out of the company. Provide outstanding recommendation letters as they search for a new job and be open and understanding when your employees come to you with questions or concerns.
At the end of the day, there will be a lot of things you will need to consider when choosing to lay off or furlough employees from everything mentioned above and even legalities depending on your location or industry. It will never be easy, but it doesn’t need to be a sorely negative experience for either party.
If you do happen to find yourself in a position to hire again, we would love to help you build your team with purpose. You can connect with us here – we can’t wait to support you!
If you’re reading this as an employee who has been let go or furloughed – we’d also love to hear from you! We have a myriad of open roles with high-growth, purpose-led companies waiting to add the right talent to their team. Click the button below to see if your dream job is just an email away!