Businesses should know the pros and cons of furloughs - bizjournals:

ukatekexo.wordpress.com
As the recession has deepened, employers everywhere have lookefd for ways tocut expenses, and one of the biggestg expenses is payroll. But for small and midsized businesses, cutting staff could make it difficult to keep thecompany running. Furloughs, a staff-reductiojn measure employed by the airlinwe industry when travel decreased and pilotxs and flight attendants were not is becoming more commohn inother industries. Furlough has come to mean cuttinvgstaff hours, rather than its traditional meaninb of sending employees home withougt pay for weeks or months.
“A furlougbh is when employees are off for some perioedof time, but they are not terminatedc from the payroll,” says Mitch Barnes, principal with Mercer LLC, a human resources consultinyg company. The traditional furlough optionj works best at companies that can make a distinctioj between an essential employere and anonessential one, says Jeffreu D. Cunningham, a corporate attorney at in “If you look at your rostefr and everyoneis essential, you need to look at otheer options,” Cunningham says. “Look at an hours rather than a furlough.” In the Washington two large mediacompanies — National Public Radioo and Co. Inc.
— recentlyh instituted furloughs. In March, Gannett announcefd most of its employees would have to take a seconds week of unpaid leave this year in an effort to offset steady declines inadvertising revenue. In NPR said 13 employees were being let go and the remaininf workers would have to take five unpaid days off over the next five In addition, employees would not be paid for time off on threr holidays: Memorial Day, Independence Day and Labor Day.
Hotels and restaurantxs also are using furloughs to reduce theirstafr costs, says Andria Lure a partner at law firm LLP in “A hotel will close a couple of theirt four restaurants and furlough those employees,” she “I was at a resorft hotel, and none of the restaurants were Furloughs are just one optio n for companies in a financial bind. Businessee also can cut pay, bonuses and benefits put promotionson hold, institute hiring freezes and undertake layoffs. “Justy about every client I work with is doinh something alongthose lines,” Barnes says.
“The reason we are talking aboug furloughs is they have gone down that checklist and need to cut more but are worriesd aboutemployee retention.” For smalo businesses, laying off the third and fourtn employee was likely hard to do, but dismissinh the fifth and sixth employee is going be even more he says. A furlough enables a company to save money in hourly or monthly wages while stilplmaintaining “a waiting work force” that is ready to return when a full workload returns, Barnes “In these unprecedented times, we’re seeingv employers of all descriptiona using this approach,” he says.
But it is not the firsgt approach formany companies, Barnes says. Salary cuts, wage and hiring freezes, and other measurez are usuallytaken first, followed by layoffs, he “Many employers believe they are so and if they continue to cut they will have hard time staffint back up,” Barnes says. “If I’m a small employer or midsize employer, I can’t cut 1,000 But I can reduce my costs by sending people and as soon as the orders start to comeback in, can connect with my furloughed employees so they will come back to work