The coronavirus outbreak has turned the world upside down. People everywhere are grappling with the uncertainty, anxiety, and economic effects of an unprecedented event. Unfortunately, the crisis has also triggered an expected (but still painful) economic downturn that’s dramatically impacted business in every industry and every location.
As business leaders struggle to balance the needs of their business with the well-being of their employees, many are coming to realize that in the face of lost revenues and unwavering operating costs they need to make some difficult choices about how to balance the business to remain profitable and competitive amid the uncertainty.
Often, it comes down to a tough decision about how best to reduce the financial burden of staffing costs — employee salaries, healthcare, paid time off, and other fringe benefits that add up over time. For most leaders that means taking the unenviable step of furloughing valued employees to reduce staffing costs until things return to normal.
Furloughs are difficult and emotional for everyone involved. And while there’s no easy way to handle such a life-altering choice, companies are finding that using human capital management (HCM) software can help companies manage the delicate situation with grace and transparency.
How to use HCMs for managing employee furloughs
While some frontline managers and executives prefer to manage furlough situations with their guts, others are taking a more modern approach by using technology to make tough decisions based less on emotion and more on data.
They can also use HCM tools to communicate with employees transparently, and keep their employees ready for work when the time comes to reload.
Here are a few ways they’re doing it:
Make data-driven decisions powered by analytics
The decision to furlough employees isn’t one to take lightly — especially when a more permanent, even more impactful option such as laying them off is still a possibility. Using the robust analytics capabilities in modern HCM solutions, organizational and line of business leaders can more accurately project their future staffing needs and determine how many employees must be furloughed and for how long.
This intelligence also helps organizations determine the financial point at which furloughs must become layoffs to ensure the business survives and gives them plenty of time to formulate employee communication plans to keep everyone apprised of the situation.
Champion transparency with detailed reporting
If a company does furlough some of its staff, it’s critical to share the reasons and rationale behind the business decisions. Receiving a furlough notice is jarring for employees and can leave them wondering what they could have done to avoid it or begin to question their value to the organization.
Instead, HR teams should seek to be as transparent as possible with employees and can use a variety of reports from their HCM tools to articulate the unvarnished, unbiased reality of the situation and why the move to furlough was a necessary one.
This approach has the added benefit of warding off harm to the business’s reputation among its employees, clients, and shareholders by demonstrating the organization’s commitment to employee well-being even in the face of adversity and uncertain economic conditions.
Minimize busy work with automation
Implementing a furlough strategy can often overwhelm HR teams that suddenly need to handle the communication and compliance requirements for hundreds or thousands of furloughed employees at once. They’re responsible for informing employees of the situation, distributing notices of temporary layoff or furlough to affected employees, and dealing with unemployment claims, benefits adjustments, and other fallout from the furlough decision.
But doing the work manually is too time-consuming and will eventually lead to a backlog of paperwork. And as teams rush to play catchup, they’re likelier to make data entry mistakes that can set them back even further — the last thing a business wants amid a growing crisis.
Instead, HR teams can use a range of automation capabilities featured by modern HCM platforms that allow overburdened HR teams to offload certain tasks like document creation, distribution, and even producing reports to share with the whole company so they can focus on higher impact tasks like interacting and directly engaging with affected employees.
Continue continuing education
The primary advantage of furloughs over layoffs is that when the economy recovers, businesses will have experienced employees ready to get back to work. That means while furloughs will be uncomfortable and present immediate challenges, it’s also a good opportunity for encouraging employees to keep their experience relevant or even develop new skills and knowledge.
HR teams can leverage integrated learning management systems (LMS) to provide initial, ongoing, or cross-training opportunities for furloughed employees. Content and lessons can be tailored to particular skills, topics, or business functions. HR and other departmental leaders can monitor and analyze progress across the company — workers both still on the active payroll and those furloughed — and will make it easier for employees coming off furlough to re-engage with the team and hit the ground running once they’re back to work.
Preparing for tough times
There’s no doubt that furloughs are an emotionally difficult situation. But amid a crisis unprecedented in modern times they’re often a necessary evil for businesses to survive until things return to normal.
While many will find a silver lining in that furloughs are a superior option and less destructive option than massive layoffs, they still need to be handled with care and empathy. Using tools like SyncHR’s cloud-based and fully integrated HCM platform can help HR teams:
Streamline some of the most time-consuming activities that take them away from interacting and engaging with employees
Simplify complex decisions about how many employees to furlough and for how long
Automate employee engagement and communications for greater transparency and trust
Provide uninterrupted training and learning opportunities for employees to keep their skills sharp and ready to hit the ground running when they return to work.
It’s a trying time for everyone, but the right tools and technologies can help ease the pain just a little by helping HR teams work more efficiently, effectively, and more directly with affected staff.
Contact a SyncHR solutions expert for a free consultation and personalized demo of the SyncHR HCM.
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