Furloughs: The best cut for employee morale?
While layoffs or salary freezes are still commonplace, more companies are turning to furloughs.
A recent Hay Group study found that 35% of companies have either:
- used furlough as a cost-cutting option during the recession, or
- have a furlough policy in place.
In addition, 50% of the companies using furloughs anticipate continuing to do so for 6-12 months.
The study also found furloughs have a minimal effect on employee morale. Example: On a scale of 1-10, companies that implemented the programs reported a score of 4.9 in terms of its effect on employee morale. That score equates to a “neutral” effect.
If you are considering implementing a furlough as a cost-cutting tactic, it’s important to be aware of potential legal snares.
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