Businesses that are experiencing coronavirus pandemic revenue losses are analyzing difficult options. You’ve spent years building a strong workforce and struggled through the workforce shortage, but the revenue doesn’t support the anticipated payroll.
Human resource options include: furloughs, reductions in hours and pay cuts, or layoffs. Furloughs, when you anticipate the layoff to be temporary, often are the best option for those that can afford them. A furlough is a mandatory, temporary, unpaid leave. Furloughs reduce payroll expenses without adding new costs such as severance packages and outplacement services. If you can keep the employees connected to the business then when business improves, employers do not have to pay for recruiting, hiring, onboarding and training new employees because the furloughed workers can pick up where they left off. But for some, permanent layoffs will be unavoidable. A layoff is a full separation from the company. During this decision making process, leaders are also balancing the potential for loan forgiveness under the Payroll Protection Plan SBA loans.