Why to consider furloughing employees before conducting layoffs?

A lot of employers believe that the terms furlough and layoffs sound the same, but they are very different. Each one has a different meaning, and they are an important part of figuring out exactly what you need and what to expect. With that in mind, it’s imperative to know when you must furlough employees and when you can have some layoffs.

What is a furlough?

It’s important to note that the furlough is basically a temporary leave of absence. Usually you will furlough your employees because the company has special needs. A good example would be the Covid 19 pandemic, you can furlough employees and suspend their activity instead of laying them off. The employee knows that they still have a job to come back to, and they can manage their life and finances a lot easier.

A furlough is always preferred to layoffs. When it comes to layoffs, they are very strict and while you can get the person back and re-hire them, they might already be looking for a new job. When you furlough employees, they are still your employees and they won’t try to find a new place to work for. While the can be for a longer or shorter term, it can help your business and also protect employees, which is the best of both worlds here.

Why should you furlough your employees?

The main advantage of a furlough is that you get to avoid layoffs. Sure, the employees are not getting paid during the furlough, but they at least know they have a job when the issue is solved. They don’t have that level of comfort if they are laid off. A furlough will also reduce hiring needs when the problem is dealt with. That means people come back to their positions, you don’t have to pay for training or anything like that. It’s a system that works incredibly well and you will be able to implement it properly and at the highest possible levels.

Moreover, a furlough gives better planning opportunities for both you and your employees. You get to map out the next few months, handle the expenses and that alone can make a huge difference in the long run. It’s definitely not a walk in the park, but once you manage it correctly, the results can be very impressive and that’s what you want to go for here!

Another thing to consider is that a furlough will also help you save compensation costs. You can put some people on a furlough for a while, this means you can lower expenses and your company will be more profitable. It’s a system that some businesses use to deal with financial hassles, and it works.


A furlough is always better than layoffs, because no one wants the discomfort of looking for a job. Many times, the furlough is advantageous for both the employer and employee as well. Sure, it might take a little bit of time to implement the right ideas, but if you do it adequately, the potential can be second to none.