In a rapidly changing economy where nations like Nigeria grapple with inflation, it is common to find employees being laid-off work.
However, due to the common mistakes people make with furlough and layoff, one would also ask which is acceptable between furlough and layoff. Both furloughs and layoffs are strategies that companies use to reduce labour cost during challenging times.
Hence, it is important to note that they each have their distinct differences in terms on how they impact employees and the company’s obligations.
Let’s start by defining each term.
Furloughs and Layoffs
A furlough is defined as a temporary reduction in work hours or a temporary leave of absence. During a furlough, employees may be required to take unpaid leave or work reduced hours.
Furloughs can then be temporary or voluntary.
Layoff, on the other hand, is defined as the temporary or permanent termination of an employee’s job due to significant business reasons. For instance, after 2020, many business sectors had to lay off some of their employees to keep their businesses running.
Pros and Cons of Furloughs
Furloughs are usually temporary, and employees can return to their normal work schedule once the company’s financial situation improves. In furlough, companies can avoid permanent layoffs, allowing employees to retain their jobs.
Also, employees may continue receiving benefits, such as health insurance while furlough exists.However, the cons include unpaid leave, which can come as a challenge to employees who rely on their income. It can also be full of uncertainty. The period when furlough exists, can be filled with uncertainty.
Pros and Cons of Layoff
Layoffs provide clear communication to employees about their employment status; it also often offers severance packages, including things like outplacement support, to help laid-off employees smooth transition.
The cons of layoff can result in job loss which could be devastating to employees; it also automatically leads to the loss of benefits which are important, such as health insurance. It could also disrupt the career progression of an employee and earning potential.
In conclusion, furloughs and layoffs are generally unacceptable because both have their disadvantages. This is so because employees would rather work and earn money to take care of their needs, develop their career, rather than be left with uncertainty or job loss which is a harsh reality.
So, we can say layoff is a permanent reduction in force, where employees are terminated due to business reasons, such as downsizing or restructuring, while furlough is a temporary situation where work hours is reduced, or a temporary leave of absence.
