Having written on the difference between furlough and layoff, in this post we would be focusing on what furlough means to an employee, both financial and otherwise.
et’s start with the definition of furlough.
Furlough is basically the temporary reduction in work hours or a temporary leave of absence often due to business or economic conditions.
While furlough persists in an organisation, the employees of that organisation may be subjected to a temporary pay cut. In addition, furloughs can also be voluntary or mandatory, lasting from a few days to several weeks, sometimes months.
The primary purpose of a furlough is to help the employer reduce labour costs and navigate challenging business conditions. When we talk about what furlough means to employees, we are basically referring to the implications of asking employees to take a pay cut or leave of absence from work.
Furloughs can have significant implications for employees, including reduced income, impact on benefits, and increased financial stress.
However, furloughs can also provide an opportunity for employees to recharge, pursue other opportunities, interests, or other sources of income. And it has been found that in some cases, furlough can be a feasible alternative to layoffs, as it offers opportunity for an employee to retain their job and benefits, though temporarily.
Hence employers of laborers often use furloughs as a way to avoid permanent layoffs and maintain a skilled workforce during challenging times. When compared to layoff, which is a permanent reduction in force where employees are terminated due to business reasons, such as downsizing or restructuring, furlough is a temporary situation where work hours are reduced, or a temporary leave of absence.
Identifying What Furlough Means to Employees
Let’s consider the implications of furlough to employees one after the other.
Financial Implications
- Reduced income: Furloughs result in reduced income, making it challenging for employees to meet their financial obligations.
- Impact on benefits: Furloughs may affect employee benefits, such as health insurance, retirement plans, and so on.
- Increased financial stress: Furloughs can lead to increased financial stress on the affected employees.
Career Implications
- Career uncertainty: Furloughs can create uncertainty about employees’ career prospects and future employment opportunities.
- Impact on career advancement: Furloughs can affect employees’ career advancement opportunities, as they may miss out on training, development, and networking opportunities.
Emotional and Mental Implications
- Anxiety and uncertainty: Furloughs can create anxiety and uncertainty, affecting employees’ mental health and well-being.
- Loss of job security: Furloughs can lead to feelings of insecurity and instability, affecting the employees’ self-worth and confidence.
- Impact on work-life balance: Furloughs can disrupt employees’ work-life balance, leading to increased stress and burnout.
Furloughs can also affect employees’ daily routines and their morale. Albeit, furlough is still considered more acceptable than layoff.
